Monday, 25 July 2011

Disruption - a case of ‘when’ not ‘if’

When should we start to attack, or worry about being attacked?

A good buddy of mine helped save a life recently – you may have seen it on the news.  Dave Green is CEO of Boston based Harvard Bioscience.  They’re the guys who developed and manufactured the kit that helped create the world’s first trachea implant in a 36 year old man suffering from ‘inoperable’ and terminal tracheal cancer (he’d been given two weeks to live).  The surgery took place in July in Sweden and was led by Paulo Macchiarini.  The science in a nutshell is this: Harvest stem cells from hip, create spongy plastic replica trachea, baste with cells for 2 days while they seed, grow and merge, remove cancerous trachea and replace with new.  A few days later patient leaves hospital.  A death sentence reversed.  How mighty is innovation!  Take a look in more detail:

Dave Green taught himself the basics of regenerative medicine and drove his business from suppliers of medical testing kit to the forefront of this revolutionary technology.  That's not the only disruption – this medical procedure requires no immune-suppressors, there is no danger of organ rejection because quite simply it’s made from you!  So what about all those guys making suppressors?  Where will they be in 10 years when we’ve worked out how to build not just simple organs like tracheas but hearts, lungs and kidneys?

Not only in life is death certain but for corporations it's a near certainty too.  Market leaders will always be eaten eventually by the stripped down, low cost, fired up challenger.  We used to cite Nokia as one of the few great examples of an organisation that had successfully shed their skin, hmmm.  The issue isn’t should we disrupt our, or another’s market, it’s all about when, not if. 

It’s notoriously hard for leaders to assess where they are in their company’s life cycle.  Tell tale signs that your lunch is being eaten from under your nose are when you’re befuddled by the technology that surrounds you, when revenue is harder and harder to achieve, when customers turn the thumbscrews on costs or when your colleagues arrogantly slam competitors as cheap or unsophisticated.  Feel familiar?  So here’s our take on how to start thinking about disruption, whether you're fighting back or just about to attack:

1) Make the threat or opportunity real, frightening or exciting?

·   Find the burning platform.  You can’t go into combat without knowing what you’re fighting for – what’s the wrong you’re righting?
·   Force yourself to re-define the market.  The bloke who recently sold me an electric car told me it wasn’t a ‘car’, it was a safer bicycle!  This is disruption thinking.
·   Explore the periphery.  Are you looking in places you’ve never looked before?  Eccentrics, crusaders, weirdo’s – they don't get through market research filters but ignore them at your peril.
·   Strip out the unthinkable – be ruthless around what consumers really value.
2) Make it easy to make the right moves at the right time

·   Lower the internal barriers to promoting ideas – reduce the potential pain of sticking your neck out.  Look outwards, keep talking about where the world is going, exercise this kind of exploratory dialogue.
·   Make sure the top brass are actively involved – disruption thinking questions why investments have been made and asks whether we really need our current workforce.  It doesn't get much grittier than this, that’s why disruption thinking has to live with the CEO.
3) Make a move, but don't bet the farm 

·   Spread your bets & keep experimenting – disruption doesn’t necessarily have to be a big investment. Start small, maybe an acquisition to give you a toehold in a new market, maybe start an innovation programme internally - work iteratively, quick-test concepts and ‘fail early’ the losers.