Every aspect of business has been changed by technology. From the way we find a product to purchasing it. From developing it to advertising it to selling it, even the way we ship products has been influenced by technological innovations over the last decade. Many of these technologies are disruptive innovations, innovations that either create new or improve on old technologies as well as develop new business models, creating new markets and filling a need people didn’t even know they had.
Let’s take a look at Apple, a company that has disrupted numerous industries and markets. When Steve Jobs introduced the iPod and iTunes to the world he essentially ended the MP3 and record store industries in one fell swoop. Millions of songs were available to download from the comfort of your own home and you had a single, small device to store 1,000 songs (that’s more than 2 and a half days of music!). Do you think CD and record stores saw that coming? What about RIO and their MP3 players?
For business leaders, executives, and employees, it is important to keep your eye out for disruptive innovations to be able to react. Take Blockbuster, for example. The introduction of Netflix and Redbox revolutionized the way we find, rent, and watch a movie. Blockbuster was so focused on its main revenue stream (which came from those outrageous late fees BTW) that it actually passed up purchasing Netflix. True story.
Not every technological advancement will be a disruptive innovation, but it’s still important to be aware of what is going on around you. There are a couple principles to help you identify, manage, and use disruptive innovations.
Keep an Open Mind
When introduced to new ways of doing business, or when encountering a potential disruptive innovation, keep an open mind. Don’t be Blockbuster and laugh in Netflix’s face. Think about all the ways this new technology or business model can alter the way you perform business every day and even how you act as a consumer.
Could you utilize this product in your business or personal life?
How much will it affect the way you go about your day?
Could it make any existing product obsolete?
Asking such questions can help you see the value of the innovation from the viewpoint of the business as well as a consumer.
React and Adapt
When a new innovation is introduced that disrupts your business and industry, you need to react and adapt. Going about business the same way you always have because of its proven success will keep your business in the dark ages. Sometimes, you don’t even have to really do anything except monitor how the industry is influenced by the innovation. There could be a lot of hype around a product that never actually has the expected impact, like that Google Glass product that never lived up to the hype.
Other times, you may need to react quickly because the new innovation directly competes with your product or maybe will change a major aspect of your business model. Gathering a committee to analyze the potential impact and develop a strategy to mitigate its negative effects can put you ahead of your competitors.
There are so many ways technological advancements and improvements can alter even the most grounded aspect of our organizations and, unfortunately, adapting can mean ending business as you know it. E-commerce created a whole new selling platform. Retailers had to adapt quickly and jump into the digital age in order to maintain market share, the traditional brick and mortar stores are closing by the hundreds as consumers flock to online retailers.
When a disruptive innovation hits the market and begins to have an impact, the most important step to take is to embrace the change. You cannot fight it and if you do, you waste time and resources. These innovations are disruptors for a reason, they make life easier for someone, whether the business, consumer, or both. Either way, if it’s a true disruptive innovation, it’s not going anywhere any time soon (unless another innovation disrupts that one).
Start changing business processes and strategies. Start using the product yourself to understand it better. Analyze it, question it, see how you can use it to your benefit or mitigate the negative effects it could have on your business.
Change is scary because it’s unknown but it eventually becomes a norm and you wonder how you ever lived without it (do you remember a time without a smartphone? How did we even live?)
Finally, look forward. You may have needed to abandon “the old way” of doing things or even an entire product line and it’s hard, large amounts of time, money, and dedication pumped into an idea just to be thrown to the way side, never seeing its full potential.
You cannot wallow on what was lost, you need to look forward and find new opportunities. See how this disruptive innovation can work to your benefit. How can you use it to gain a competitive advantage? You may even find a new way of using the technology that even the inventor couldn’t predict.
In our day and age, disruptive innovations will not be slowing down. We are in the innovation age and change is a regular part of such a revolution. For businesses to succeed in this ever-changing environment, you cannot cower away as a business leader. Rather, step up and lead.
Open your mind, react and adapt, embrace change, and look forward to future possibilities.
How do you identify and manage disruptive innovations in your work and life?