Organizing for Disruption

netflix-rev-1“The law of a handicap of a head-start” ceased to exist. Yes, you read it correct “de wet van de remmende voorsprong” bestaat niet meer. Why is the law outdated And what do we get in return? We get the law of adoption by attraction.

Why the law of a handicap of a headstart no longer applies..

For decades we have been peopled by the forces of the old economy. Seize mattered, economies of scale gave ample room for new competitors and networking was a privilege of social inheritance or your private academic investments. The forces of power are over because we have entered a great period of economic transformation. Based on technological developments we are all digitally empowerment to make use of powers that were once only available for the aristocracy, the rich and the old-economy business people. The companies from the past now face serious competitive threats and it proves to be very hard to transform existing companies to recreate their value proposition into todays economy. Typically these companies buy technology to stay in the game but the problems is that they are busy trying to fit into the new world and that they find no time to redesign themselves. They are busy maintaining the business with sales and operational efficiencies. They are acquiring technology but improve their processes only incrementally with product and proces innovations. Innovation for exponential growth comes from reinventing the needs for consumers out of new technologies, different fields, and other views. Therefore, the law of a handicap of a headstart no longer applies. It’s a burden and board members face serious issues in maintaining profit margins and sustainable value creation especially when they are in a declining industry.

The law of attraction

The law of attraction is the road to value creation. The road to improve the current business activities and to innovate business processes en to steer new business development. The law of attraction is about moving away from materialistic principles of ownership, the power of money, privacy and priviliges. Yes, you can still by everything with money but the value creation lies in utilizing the available assets at minimum costs. What does that mean? Assets costs money, we therefore need less assets or increase the income from the assets we have. Increase income on currents assets means that you have to generate new income streams, develop new value propositions and to re-engeineer the profit portfolio. With the law of attraction you – being an asset owner – will rethink how customers will buy, rent, lease of hire your asset. What makes people to use your asset and what do you need to do to make them wanting your asset? If you are not an asset owner you will provide access. You produce access in terms of data, hotel rooms, flight tickets – in a service with the cheapest, fastest or safest way of traveling for example – etcetera. It is important to analyse your business. What are the assets, do you need to own the assets or do you transform to access?

The law of adoption

The law of adoption is the act of transforming to adjust to todays world. Being able to address your current position in a declining industry creates the change of redefining your business and to design strategies for new business development. It is vital to act upon these strategies to innovate your organization in terms of products and services, processes en people because without change you will become obsolete. Capabilities for adopting transformation requires objectivity and courage. Objectivity brings you transparency in nice to have versus need to have. It brings new attributes, indicates time versus smart use of information and interactive communications. According to the authors of Exponential Organizations these are the attributes for Exponential Organizations:

  • Collaborative technologies
  • Leveraging accelerating technologies
  • Multi skilled team – p2p – no management layers, beehive mentality
  • Fast iterations with f/b loops
  • Massive transformative purpose (MTP): a purpose greater than a vision. It should be uniquely yours, highly aspirational and aimed at heart and mind, e.g. TEDx “ideas worth spreading.” A strong MPV creates a community pull.

The key to successfully applying the law of adoption is dealing with courage and courage is about fear management. Fear is about letting go of obsolete products, services and processes, outdated tools and opening up to interactive capabilities with real time co-creation, transparency of data, updates and finding solutions to digitalize the achievements of the past. You need to dare to invest in the disruptive tooling, play with it and learn how it will empower your organization and adopt it by transforming the way how things are done. Most managers would like to know in advance what the ROI will be for investing in innovation. However, the business case is always presented based on assumptions. The easiest way of presenting the value is by turning the current declines in business to growth figures. Creating share holder value by delivering new income streams based on extending core competences into other fields. In practice: levering your assets is about delivering new value, increasing your income while decreasing the demand/supply ratio of costs. It requires strong executive leadership to steer the law of adoption, overcome fear and focus on the head and heart mission of business existence.

Act on Transformation

The media industry shows massive downturn in advertising income. The music industry presents a massive loss in income. The home video industry has been turned  upside down by Netflix and delivering  real time video around the world using satellite stations is available. Besides disruptive business offerings empowered by technology the new breed of businesses arise from consumer disappointment. For long, consumers  were given no choice and with new offerings, offerings that are more focused on consumer needs, at lower costs and with better services, people choose the new business offerings. Consumers are now positive amazed, they are empowered by customization, custom tools and opt-outs of undesired options. Consumers now get more value for money and they are willing to pay big time for it, so it worth the investment.

Question arises, how do you organize for disruption?

Where do you start and where can you co-create with the fast paced start-up companies who not only fulfill unmet consumer needs but bring about massive disruption in the industry causing the established companies to file for bankruptcy? In order to organize for disruption my advise would be to focus on redefining the mission to a Massive Transformation Purpose and to analyse the current position to obtain transparency and next design strategy how to realize successful transformation and execute upon it from a people strengths perspective.

With a focus on knowledge, services and entertainment, what do you thing should be the adoption strategies for the following industries: Education, Publishing, Media and Social – will they merge, provide access or become obsolete due to new market entrants? Share your thoughts from a strategic perspective giving opportunities and threats.

Looking forward to your contribution.

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Copyright: Athalie Stegeman | Ontwerp: DPid Ontwerp | Website: Piri Piri Marketing & Communicatie