Disrupt Yourself -- or Someone Else Will
Entrepreneurs thrive on disrupting an entrenched incumbent. The tech industry has a storied past of established companies with seemingly insurmountable strength falling to younger, nimbler upstarts. Before we know it, an upstart can capture a moment, change the conversation and become the "cool kid."
To achieve long-term success, business leaders must adopt a mantra: Disrupt yourself before someone else does.
Take Netflix, for example. Ten years ago, the company abandoned its data centers and migrated all video-streaming infrastructure to Amazon Web Services (AWS). Netflix realized its core expertise was not in managing costly data centers, but in content curation and software development. Using the cloud to free up human and financial resources has helped Netflix become the leading streaming video and original content platform, with 125 million subscribers worldwide and 112 Emmy nominations in 2018.
On the flip side is Intel, whose core business of PC chips is buckling under pressure from mobile computing, IoT, cloud and wireless innovations. To make matters worse, large microprocessor chip purchases from companies such as Apple are dwindling since Apple started building its own chips.
The pendulum of progress is always in motion -- sometimes faster, sometimes slower -- as are market trends and customer attitudes. One minute a company is at the top, seemingly unstoppable, and the next minute headlines decry, "What happened?"
The cloud catalyst
The cloud, which supports nearly every major SaaS and mobile application, is drastically accelerating the change cycle. Companies can buy all their IT services on a monthly basis and switch vendors more easily than ever before. Think about the current IT vendors that you invite into your environment -- how many were introduced within the past five years?
The cloud also makes exponential experimentation possible. It's like harvesting the compound interest from investment accounts -- all the previous innovations enable another innovation wave, amplified by all that came before.
This is happening with "serverless" technology, which eliminates wasted infrastructure and makes operating costs for SaaS and mobile applications lower than ever. Serverless will ripple through the cloud ecosystem, upend current vendors and create opportunities for new startups to emerge.
No time to waste
With cloud technology accelerating the cycle of change and innovation, business leaders must figure out how to disrupt themselves more quickly than ever before in order to survive. Here are four ways to facilitate self-disruption:
1. Instill a culture of learning and innovation.
It's easy to miss the warning signs of approaching disruption. Even if sales and Net Promoter Scores (NPS) are good, a competitor you may not even know about could be gunning for your customers. To prevent complacency, company leaders need to instill a culture of constant learning and innovation by actively pursuing areas adjacent to core competencies.
Google developed a great model for this with the "20 percent time" option, which enables engineers to dedicate one day a week to a passion project or discipline that falls outside their assigned role. AdSense, one of Google's primary revenue generators, and Gmail, now the anchor of a billion-dollar office productivity suite, both started as 20 percent time projects.
To create space for such projects, think creatively about areas where wasted time could be repurposed more effectively for active experimentation. For example, consider a "no meeting Wednesday" policy so employees have one day a week that is a blank canvas. Unleashing your team's creativity can create the next big opportunity for your organization.
2. Define guardrails to unleash team potential.
Unbounded innovation will ultimately deviate from solving business problems to science experiments with no real purpose, so it's important to build in "guardrails" to help your team flourish while still being productive. These may include:
- Explaining the goals or results you want to see and why
- Establishing metrics for measuring progress, success and failure
- Identifying specific technologies or market segments to investigate or avoid
Whatever you do, don't micromanage. Get out of the way and let the team surprise you.
3. Observe, experiment and integrate.
Pay attention to macro trends and micro decisions. With cloud and SaaS making nearly every basic IT service a commodity, what makes your offering special?
OODA (Observe, Orient, Decide and Act), a method that fighter pilots use to think through combat situations quickly and rationally, provides a great framework for processing change in technology and markets. Here is a shortcut:
- Observe the world around you (your company, customers and competitors).
- Experiment with new solutions.
- Integrate your knowledge back into the beginning of the observation cycle.
Rather quickly, some epiphanies will emerge that could be the next big idea for your company.
4. Avoid legacy thinking.
Innovation cycles repeat the same patterns over decades (and centuries). Don't be a naysayer out of fear of change. Learn from history:
- 1876: "The telephone has too many shortcomings to be seriously considered as a means of communication." -- Western Union internal memo
- 1921: "The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?" -- Radio and TV pioneer David Sarnoff's associates on radio technology
- 1977: "There is no reason for any individual to have a computer in his home." -- Ken Olson, founder and CEO of Digital Equipment Corporation (DEC)
Disruptors think differently. Can you?