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Disrupt or Be Disrupted: What Every CEO Must Know

You may be familiar with the term “disruption” but it’s possible it has also completely lost meaning (as words often do) from being so overused.

“Disrupt or be disrupted” is not a new business concept. It is something that has been studied, defined, and redefined, since Clayton Christensen coined the term “disruptive innovation” in his 1997 book entitled, The Innovator’s Dilemma. Since its conception, the idea of disruption in business has taken on it’s own persona and has truly become an entity in itself.

By “disrupt or be disrupted”, I mean that if you aren’t making things happen yourself, for your company, then someone is going to put you out of business right under your nose–with a lower price point and better business plan. This is true for every company, in every industry. Right now, at this moment, your company is either disrupting the marketplace, or you’re actively being disrupted.

This isn’t meant to be fear based, but it’s the reality of the situation so I might as well come out with it.

Between the pace at which technology advances and the rate at which ideas are generated, disruption is truly a natural cause of the times.

This philosophy has become an integral part of Vitals Agency and how we work with our clients. Keeping this in mind when we conduct branding workshops around the world, we are able to think ahead and really keep the scope wide. At Vitals Agency, we engineer disruption in a controlled environment.

When Uber disrupted the industry, taxi companies had been around for so long and were just sitting pretty in their steady 5% annual growth, not thinking there was someone building a business to take their customers right from under their noses. You need to be thinking at the same rate at which consumer behavior is thinking and reinforcing your army–not getting comfortable.

If you’re comfortable in your business, you need to be thinking about who knows your comfortable and how they are planning to make you uncomfortable. There is a constant ebb and flow of disruption and being disrupted.

What does it mean to get disrupted?

Disruption does not mean destruction–rather it is simply innovation that upsets the current market. If a company has been disrupted, then their product, service or business model has essentially been innovated in a way that is either more profitable, more functional, or both.

The following things happen as a result of being disrupted:

  1. Loss of vision and innovation
  2. Value proposition goes down
  3. Reduce of consumer affinity
  4. Loss of revenue or being in jeopardy of having your business close (you’re at war with your competitors, after all)

Why do companies get disrupted?

The short answer is that they are too comfortable. Like the pre-Uber taxi operators, they simply didn’t see it coming. They didn’t think to look around the corner or adopt the advancing technology, and they got bombed by innovation. The long answer is the following:

  1. Intimidation of new technology
    Companies that are intimidated by new technology, or simply ignorant on how to use it, get easily disrupted. If you’re the CEO and you don’t have time to explore something new, ensure that someone in your company is at least looking into it. It’s better to know a little bit about a new technology than nothing and get blind-sided.
  2. Shift in consumer behavior
    Consumer behavior is constantly evolving; like technology. People are consuming more content on their mobile device than they are on their TV, computers, and radio combined. The activities you’re doing now in your business should be different than they were last year because things change that fast. What worked a year ago isn’t going to work the same today, tomorrow or next year. Evolve or die.
  3. The inability to be agile
    A big problem with larger companies is that it takes way too long to make decisions and implement them. You have to be able to move quickly in order to remain relevant. Become an early adopter of new technology/processes/etc so that you are always ahead of the curve and looking towards the horizon of innovation.
  4. Lack of talent
    Hiring or working with people because of cost is absolutely the wrong thing to do. Don’t hire a slew of free or cheap interns that are just getting their feet wet because it’s cheaper. Invest in your company through talent and go for quality. Hire people who are better than you at their trade. Think creatively and strategically.
  5. Lack of alignment between leadership
    There are many ways to get to one common goal. Getting all the decision makers in alignment with the goal and the process is incredibly important. Whether it’s a board of directors, high-level executives or just your business partners, everyone needs to be thinking in the same direction, in the same timeframe, towards the same goal. Being disjointed here is the kiss of death.

How do companies disrupt themselves?

As it goes, you’re either disrupting or being disrupted so knowing what it takes to disrupt internally can help put you on a trajectory to innovate from within.

  1. Be user centric/customer centric
    “As the business owner you’re the judge of your business. But at the end of they day the consumer is your jury and executioner. The consumer holds your fate.” (Lee Clow’s Beard) If the decisions you’re making aren’t inline with your customer’s needs then they don’t matter. Understanding what they need, what makes them buy, what makes them return, and what keeps them coming back is being customer or user centric. It’s all about the customer.
  2. Go big or go home mindset  
    You can’t operate in a mindset of scarcity. This inhibits the creative process and handicaps your entire flow. You need to dive all the way in to measure the results. Take calculated risks and invest in them fully. Baby steps are for babies not for brands.
  3. Stay agile and lean
    Keeping things in-house and ensuring that you’ve hired experts assures that you’ve got the tools and people you need right under your roof. Just as I mentioned above, if you’re too big you can’t move quickly or change direction on a dime. You’ve got to give your company the space to move how it needs to move when it needs to move.
  4. Experiment, and experiment again
    Experimentation is something you can do that doesn’t actually get implemented. Pricing models, headlines, marketing tactics. Think outside the box and do something that other people in the industry aren’t already doing. Typically a creative and innovative pricing model is one of the fastest ways to disrupt.
  5. Find creative thinkers, give them authority, find the right talent
    Encourage innovation and transformative thinking from your employees. Ask them what they need to be able to work better and what would make their job easier. Change starts from within and these people know more than you do about the specific vertical (and that’s the point). Empower them and see what they can create.
  6. Encourage continual education
    Go out and learn something new. Give your employees access to webinars, conferences, courses and resources that will fuel advancement. As quickly as things change, it is absolutely vital to be continuously learning. Find out what’s hot and get educated on what people are doing right now. You won’t get the same results from doing the same thing.

Invest in yourself, invest in your team and you’ll be able to come up with innovative ways to disrupt your current business model. Bring more value to the marketplace and ask yourself “how can this be done better?”. If you focus on disrupting from within, chances are you’ll prevent disruption from the outside.

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