WHY DISRUPT?

The #1 factor leading to business risk in the United States in 2018 was business interruptions (disruptions) followed by cyber incidents and natural catastrophes as reported in the 2018 Allianz Risk Barometer Survey. For the past few years, trade wars have led to uncertainties in policies and tariffs, calling for businesses to react quicker and smarter to thrive in an unpredictable environment. With changing external environments, companies must be nimble and embrace technological disruption to stay ahead of the curve. Industries like agriculture have been transformed from a labor-intensive industry to a more machine-driven industry. In essence, industries have been disrupted and transformed. Disruptive leaders have thrived and have been able to gain market share in this new era, while others are facing the heat of being disrupted.

Disruption drives new value to the customer and pushes the boundaries of innovation. It helps businesses thrive, not just survive. Disruption can be considered a part of or in-sync with innovation. Companies such as Amazon, Netflix, Uber, Apple and Airbnb have disrupted their respective industries by focusing on the customer's convenience and need.

Innovation can be segmented into four groups – Sustainability, Evolutionary, Revolutionary and Disruptive. Disruptive innovation creates a new market by providing a new set of values, and barrages an existing market. 

In today’s modern era, the most talked about disruptions are digital disruptions, such as IoT, artificial intelligence, and drones. It is of vital importance to have a holistic view of the business and not just a segment of it. We need to understand which parts need to be disrupted, ensuring disrupting one piece does not cannibalize an existing product or service. Therefore, disruption needs to be integrated across products and channels and cannot be siloed. In short, disrupt only if you are going to add overall value.

From one frame of reference, disruption is essentially reinventing the organization. This mindset needs to be woven into the fabric of all in the organization. In the near future, the rate at which an organization can adapt and change its environment will be a key strength.

SPEED OF CHANGE

Change has always been a constant. The critical need of the hour for businesses is to change quicker and be able to scale at a sustainable rate, keeping pace and sustainability in balance. Fortune 100 companies are being disrupted by start-ups. Major retailers have filed for bankruptcy. Most of these cases occur due to the inability to provide the same value as the competition in a sustainable manner. The life cycle of products has become shorter. Technology, like 3D printing, has assisted in increasing the rate of prototype creation and overall production.

“Everyone thinks of changing the world, but no one thinks of changing himself” -Leo Tolstoy. 

The objective is to understand the core business and values to make changes to grow and conquer the market. The problem statements are still the same, with a focus on customer behavior and maximized customer value. However, essential variables, levers, and constraints in this optimization problem have changed with time. 

Developing a deep understanding of customer behavior and the competitive landscape, across multiple time horizons, defines our necessity to disrupt and the impact it would have on the market. Leadership must plan disruptions within organizations on an accelerated schedule and ensure the execution is smooth to obtain maximum gains.

Assess external forces and internal structures

STEPS TO DISRUPTION

There are external and internal factors to disruption that can change with time. It is important to redefine the business and unleash its intrinsic value. With time, identify pursuits and innovative opportunities across market and products.

• Define ecosystem
• Understand drivers & dynamics of the market
• Anticipate changes and disruptions
• Estimate impact of change made by you or the competitor
• Develop your strategy and response
• Adopt and integrate business model
• Disrupt!

Disruptive strategies or disruptive models should only be carried out, if all major variables have been studied. Creating a roadmap and effectively communicating the change across the organization is important to obtain synchronization across all activities. 

“If you fail to plan, you are planning to fail.” – Benjamin Franklin. In summary while executing a disruptive model, plan well and ensure you are adding net value by the change you are making.

CGN VALUE

CGN Global is uniquely positioned to recognize and address the industry shift and product changes. CGN transforms organizations worldwide to improve performance, profitability, and global competitiveness. We use our diverse experience and broad knowledge to provide strategic insights, actionable recommendations, and focused execution to drive results. We identify the challenges and the market opportunity with each potential change to ensure intrinsic values is tapped and business is thriving.