Strategy in the Age of Devastating Innovation
from Brand Genitics.com 5/16 enhanced by Peter/CXO Wiz4biz
Big Bang Disruption: is a book about technology & innovation – specifically how technology is the ‘Big Bang’ that can deliver “disruptive innovation” by both driving down business costs & making the delivery of new value possible. Based in part on a study on Disruptive Innovation, the authors outline a 12 point strategy for delivering & surviving “disruptive innovation”. Bottom line, brands need to find their inner-shark – have the energy to work at the pace of a start-up, a venture investor, or a young entrepreneur pulling an all-nighter, fueled by unrealistic hopes & too much caffeine.
1. Consult your Visionaries – who see the future more clearly than you do, to tell you about the opportunities & pitfalls.
2. Look for your ideal Market. Learn to identify the little valleys from the big hills, creating the perfect product to enter a new market niche that nobody’s in or is not crowded.
3. Float Trial Balloons. Talk to potential customers & your advisors about the feasibility of your product. Incorporate valid feedback and get it into the hands of customers to use. Listen to their feedback. Modify as appropriate.
4. Go for “Winner-Take-All” Markets. Sacrifice everything, including short-term profits, to ensure victory, especially when your success can be leveraged into follow-on products that can be created and launched fast as the original.
5. Prepare for Exponential Success. Prepare to scale up from being a success in the USA market to global brand in few months. Continually improve your product architecture – even while soaring to new heights. Watch for emerging standards that signal the maturing of your hot technology.
6. Anticipate Saturation. In this age when customers adopt, then can abandon you when new products & services come, it’s essential not to be caught with excess capacity or inventory. You need to track the market closely – to anticipate the saturation before it happens and to scale down as quickly as you scaled up. Poorly timed purchases—whether of raw materials, inventories, or of companies whose value is about to peak—can wreak havoc with your balance sheet.
7. Adjust to real Conditions. As humbling as the idea may sound, companies trapped in plateaued or declining markets often find their best hope is to phase out part of their business and transform into a new business model – catering to markets emerging elsewhere.
8. Don’t wait. Innovate or you’ll be “the Late”. As the lone remaining player in a field, it may seem as if there’s no more competition to worry about. But beware the deadly behavior of your older products & services once better & cheaper alternatives are readily available. Legacy costs, legacy customers, & legacy regulation make it harder, not easier, to compete.
9. Move to a New Business Model. Co-opt the tools of the disruptors and their investors, and use them to relocate your remaining assets to a healthier ecosystem. Sponsoring hackathons, opening innovation centers for entrepreneurs, and excelling at corporate venture capital can often buy you the access and equity you need to catch up for lost time and missed opportunities in the early stages.
10. Quit while you’re Ahead—Even if—especially if—you’ve dominated your industry for a while. The replacement of outdated core technologies with new disruptors can wipe out all your traditional earnings quickly – if you allow it to. Courageous executives accept the inevitable, & announce their exit from current markets while they are still strong. Doing so gives you more time to create a new product and move to a new market. Even better, it forces competitors to change on your schedule.
11. If you must, shed Assets before they become Liabilities. As one generation of disruptors fades, related assets—factories, distribution networks, & intellectual property—can lose value, gradually and eventually be gone. Knowing the right time to sell – and to whom – can mean the difference between your ability to develop you next disruptor & bankruptcy. Knowing which assets to keep for the next cycle of innovation is equally important.
12. Track your Attack, if you want to keep coming back. You need to keep your finger on the pulse of how technology is threatening to transform your product category. The list of retail brands that have already been retired to the dead-pool by technology is sobering. But branded consumer staples are under threat too. Think Dollar Shave Club, with 25K razor subscriptions in the first week, & the beauty box brands (Glossybox, Birchbox) that are shaking up the beauty category. If you think technology will not disrupt your category – then you could become shark food.
Comments: Do you know any other ways to be a Big Bang Disruptor?