May 10, 2011

How Should You React to Disruption? Pause, Listen, Know Who You Are, and Innovate Beyond!

Two ways your organization might be hit by disruption:

1. A competitor introduces a disruptive product
2. Macro forces create a disruptive environment

When either of these occur, the wrong thing to do is to allow it to disrupt what you are doing! Will you need to respond? Probably. But most companies' response is:

- Too quick
- Void of market validation
- Non-disruptive

When a competitor introduces a disruptive product, do these three things:

1. Pause and listen -- take a breath, it's going to be OK. Listen to what end-users are saying about the competitor's disruptive product. Learn.

2. Reevaluate who you are -- this is key because the disruptive product will cause you to question your identity as an organization. You must decide (big decision-making time!) if you believe in who you are or if your core message/mission must change.

3. Based on who you are, innovate beyond the competitor's disruptive product. There will always be another disruptive product; it will be yours if you innovate beyond.

What If I Only Have One Pocket?!

Apple owns the touch screen market. For various reasons, Apple decided to go bigger rather than smaller after the iPhone to the iPad. Guess what? Now the consumer carries an iPhone, iPad, set of car keys and a wallet wherever he/she goes. I don't want to carry all these things around -- I want one device that is my iPhone, car keys and wallet all in one. Invent that and people will buy it. That's innovating beyond.

When macro forces create a disruptive environment do these three things:

1. Pause and listen. What do the new government regulations, economic policies, shifting demographics mean for your organization? You can't win the game if you don't understand the rules better than anyone. And please, please do not try to play the game before fully understanding the rules.

2. Communicate with the infantry. When major macro forces hit an industry, often companies will think that the generals will determine whether or not the company will successfully navigate through the disruptive environment. Not true. The "boots on the ground" will determine your future. Help them understand the macro forces and -- this is KEY -- ask the infantry what they think about these forces: how should the company respond? Given the new rules, what is the best play?

3. Don't overreact. Did the macro forces change your customer? Did the forces change the customer pain points? Has the competitive landscape significantly changed? There is a good chance that you don't need to change who you are and do not need to significantly change what you do -- assuming you were successful before the disruptive macro forces hit. Overreaction could mean that you go from market leader to scrambling to figure out how you got so far off track and fell behind your competition. Don't allow the macro forces to cause you to lose your identity.

Ford's Reaction to Disruptive Macro Forces

Ford faced some disruptive macro forces in recent years. It appears to me that they paused and listened. I wouldn't be surprised if the generals spent a lot of time communicating with the infantry. And, most importantly, they did not overreact. Ford knew who they were and with impressive resolution Ford determined to build a cutting-edge brand that could compete with Honda and Toyota. Go to and you will see the front page is all about Ford's three cars that get 40MPG.

Disruption will happen. If you aren't the one causing it, then you must be prepared to appropriately respond to it. Pause, listen, know who you are, and innovate beyond.

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