RUSSELL DALGLEISH on how disruption can play a key part in business strategy
One topic that came up during a virtual discussion organised by Greater Manchester Chamber of Commerce last week was how companies had turned to disruptive strategies to secure new business. This got me thinking about what we mean by “disruption” and how important it is in staying ahead.
Disruption is generally regarded as “a radical change in an industry, market or business model” and the key for me is the word “radical”. Not a word we would commonly use in the business world as we typically seek “consistency” to allow us to make long term plans and investments.
This is not about adapting pricing strategies or attempting to sell into a new sector, it is about revolutionary change; the type of market change which wipes out entire sectors just as automobiles and trains wiped out the need for horse-drawn carriages.
Radical change has been a part of all our lives, usually arriving unexpectedly. Just consider how watching a movie has been subject to “radical change”, from queuing for tickets, to renting videos to today’s streaming services. And the ones who didn’t plan for these stages of disruption included those in the industry itself. The disruptors came from outside the sector.
The health emergency has created new disruptions – to our working practices, coping with social isolation, communicating virtually, home schooling – and the same challenges have emerged in how to deal with unexpected change.
But while some businesses are forced into disruptive action because of market conditions, there are numerous examples of companies which have made proactive decisions to disrupt their market with new business models and have benefited massively. Think Tesla, Facebook, Ryanair, Airbnb, Uber, Linkedin…. They are the real disrupters. First to market and, in most cases, still the dominant force.
I would postulate that unless you believe your market will return to a “pre-COVID normal” (who are you?), then it’s time to think about how you can take the lead in changing your market to meet new customer needs.
But where to start? Well, for me, step one in any strategic move is to analyse your market. Consider what are the likely drivers, and where could that market gap develop which you can exploit.
Educate yourself on previous recoveries from recession and get involved in new initiatives, such as Net Zero, and be sure to check out how companies like yours are adapting in other markets such as the US.
Then analyse the data and pull together a strategy. Here I would urge you to take counsel. Develop your plan, yes, but share this plan with trusted advisers, key clients and customers to see if they buy into your logic.
Take on board this feedback, define a detailed tactical plan and execute. And by execute, I mean make that move now. Don’t delay.
Once in the execution phase ensure you have defined clear KPIs and review these regularly to see if your plan is working. If not, adapt as necessary. Remember, it doesn’t matter if a KPI is under hit or over hit you still need to adapt your plan. There is no success in over-selling unless you can also deliver.
When running to a disruptive model it is key that you have crystalised a clear vision of what you want to achieve end can easily articulate the “why”. This is most important when securing “buy in” for your plan from team members, investors, and the general market. Best advice always is to communicate.
So is disruption a threat or an opportunity? In truth, it’s both. A threat if you are the one being disrupted, but an opportunity if you are the one doing the disrupting.
Russell Dalgleish is co-founder and chairman of the Scottish Business Network