Stop Disruptors Before They Stop You

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Is your company so concerned with maximizing your current strategy that you’re missing out on new entrants who might actually disrupt your business?

We’re all familiar with the fact that Blockbuster was so concerned with making its stores successful, it was blindsided by the ability of Netflix to create both a company without any physical stores and one that would succeed without a physical disk or tape – as it relied on streaming.

Similarly, Sharon Terlep reported in a July 20, 2016 WAll Street Journal announcing Unilever’s acquisition of the Dollar Shave Club, that Proctor & Gamble’s executives had privately acknowledged that they were caught off-guard conceding that “we weren’t necessarily having the right conversation around what might disrupt us.”

How do you make sure you are having the right conversations? One step is to value being “paranoid” as Andy Grove, former Chairman of Intel said in his book “Only the Paranoid Survive.” That means making it part of the portfolio of some executive (e.g., VP of Strategy) to dedicate time to looking at new technology, models and businesses and identifying scenarios in which they might “eat your lunch”.

Second, engage all executives on a regular basis in an activity of challenging each other on how their company can be put out of business. One approach, which Clayton Christensen and Maxwell Wessel described in “Surviving Disruptions” (HBR Dec. 2012) is to assess the threat of potential competitors. Identify:

  • The strengths of the disruptor’s business model
  • The relative advantages your company has
  • The conditions that would help or hinder the disruptor from co-opting your current advantages in the future.

Another is to engage periodically in the “Put Us Out of Business” exercise. Have each executive role play how they might if they worked for an existing and future competitor target the weaknesses of the company to beat them. Have them target strategic functions for which others are responsible, so they are forced to be creative and will be less defensive.

How do you now challenge your business model and “competitive advantage”? Should you change?  If it’s effective, share it with us. We want to keep our companies vibrant and growing! anabolen kuur voor beginners