One thing I’ve learned as an entrepreneur and business consultant: Nothing ever stays the same. What succeeded for your company five years ago most likely is no longer working today. Why? Because the playing field has changed while you were basking in success. And it always does. My friend Robert Tucker writes about facing down disruption:
As disruptive forces press down upon almost every business and industry sector, we’ve all got to objectively assess the new playing field, and use creativity to go on offense.
New Yorker writer Jill Lapore’s well-publicized takedown of Clayton Christensen’s Theory of Disruption misses the point. Fifteen years ago, the Harvard professor pointed out how low-cost upstarts like steel producer Nucor, Southwest Airlines and others disrupted existing industry players with stripped down, “good enough” products and services, to upend markets. Lapore challenged the theory by questioning whether certain incumbents that Christensen wrote about were really overtaken after all. Both miss the larger point. Today, disruption is a broadly-inflicted phenomenon whose origins range from regulatory, technological, social, geopolitical and demographic. Whatever causes the malady, its only commonality is that it is often fatal to businesses that don’t respond boldly. To wit:
- The iPhone disrupted Nokia and Blackberry, not with a stripped down, lower-cost product, but from the high end with exciting style and functionality. Uber and Lyft disrupted the taxi industry, not by offering a lower price, but by introducing “surge pricing.”
- A regulatory disruption has hobbled hundreds of small banks in the USA, as they struggle to cope with a complex new financial restrictions (Dodd Frank) passed by Congress.
- The cemetery and funeral industries are undergoing a lifestyle disruption. As cremation gains favor fewer people buy burial plots, and fewer people opt for expensive caskets, and expensive funerals. The golf industry has been disrupted as millions of golfers have given up the game, citing “lack of time” as their key reason. And so it goes.
Fending Off Disruption
Here are several ways to respond to disruptions that may be looming in your industry: