In leading your business forward should you be focusing on disruption, innovation, creating your own ‘blue ocean’ or does the answer lie in new business models?
There is a lot of language and noise in the marketplace directing leaders as to what they should be focusing on. We hear the words ‘disruption’, ‘innovation’ and ‘business model’ all the time, and kicking around in the background is still ‘blue ocean’. Does this language actually mean anything, or is it just all hype?
Disruptors
In January 2017, CNBC released their 2016 CBNC Disruptor 50 companies describing them as ‘forward-thinking start-ups that have identified unexploited niches in the marketplace that have the potential to become billion-dollar businesses’.
Here’s their top five:
- Uber – A $66 billion on-demand ride (Disrupting: public transportation, taxi and limousine services).
- Airbnb – There’s no place like (someone else’s) home (Disrupting: hotels, travel).
- Ezetap – Leading India’s cashless revolution (Disrupting: electronic payments).
- Palantir Technologies – Big data; bigger secrets (Disrupting: business services, data mining, cybersecurity).
- 23andMe – Decoding your ancestry (Disrupting: genetic testing).
Innovators
In February 2017, Fast Company released their list of The 2017 World’s 50 Most Innovative Companies being those companies that ‘tap both heartstrings and purse strings and use the engine of commerce to make a difference in the world. Impact is among our key criteria’.
Their top five are:
- Amazon – for offering even more, even faster and smarter.
- Google – for developing a photographic memory.
- Uber – for accelerating autonomous driving.
- Apple – for baking in its advantages.
- Snap – for bringing crackle and pop to a new way of seeing the world.
I’m sure all leaders would like to be able to identify unexploited niches, have the potential to become billion-dollar businesses, and have a real impact that makes a difference in the world. So is there some secret formula or approach that allows companies to disrupt and innovate?
Defined
Disruption seems to be more associated with shaking up the existing order whereas innovation is stepping forward along an established path. In both cases, business models may well need to be modified or rebuilt to support the new business emerging from the disruption or innovation. A business model is simply how you intend to make the business work and earn dollars from it. New technologies can offer new ways of interacting with customers and therefore change legacy business models.
As for ‘blue ocean’ well one would hope that any disruption would be aimed at creating a blue ocean and many innovations would take you substantially down that path. A blue ocean is where you have shifted the value proposition offered to customers and redefined how competition occurs in that marketplace. It’s really about taking yourself outside the existing competition and setting the rules for the new marketplace, one in which you can win.
Changes Coming
Let’s throw into this mix what is described as the 12 Future Technologies That Underpin The Fourth Industrial Revolution as these are the agents that may provide windows to what future disruptions and innovations may arise. They are:
- 3D printing
- Advanced computing technologies
- Artificial Intelligence (AI) and robotics
- Biotechnologies
- Blockchain and distributed ledger
- Energy capture, storage and transmission
- Geoengineering
- Nanotechnology
- Neurotechnologies
- Space technologies
- Ubiquitous linked sensors (Internet of Things)
- Virtual and augmented realities
Looking at this list, do you know whether any of these technologies will impact your customers’ needs, the value they do or could receive, or the efficiencies in your business? And the most important point of this list is to ask, what trending technologies are you tracking as they are developed to ensure you are ahead of the changes that are coming?
Lessons
So what does all this really mean for business leaders and what lessons can be gleaned? Is there a secret formula?
The lessons, and formula, I would take away are:
- It doesn’t matter how large or small your business is, the ability to innovate or disrupt is in your hands. All the businesses listed above started small and with an idea, and grew from there. You don’t have to be big to find ways in which new technologies can dramatically shift your value proposition.
- Change is constant and new technologies will always impact your customers, their needs and the market in which you compete. You must always be looking forward and seeing where need, new technologies and other market changes are emerging to provide a new window for you to step into.
- You need to identify which technologies may impact your chosen market but you must also read widely as the opportunities often lie in changing boundaries.
- Your eye is always to your customer of today and tomorrow and their needs. This requires an intimate understanding of why they actually use your product/service and the real need that it fulfils. You are then able to search more clearly for how you may improve the value you deliver.
- And you also look internally to what it is you do better than anyone else and see how the changes occurring in the marketplace may provide an opportunity for you to step into something new.
As a leader, my focus would not be in searching for new disruptors or new innovations, but rather looking widely for changes in the marketplace, including new technologies that would provide my business with an opportunity to deliver greater value, improve efficiency and grow my market.
And to achieve this I must build, firstly, a business focused on the customer and the value we deliver to them. In here lies the greatest challenge, and the secret formula, to build a business that will create and sustain a focus on customer value. A business that will not only maximise value today but will search out what that value can become tomorrow.
Wondering what approaches may create the type of business where leading change is natural, and disruption and innovation an everyday occurrence?
Take the Real Growth benchmark test, which will allow you to assess yourself against global best practices.
Active Knowledge Questions:
1. As a leader how widely do you read outside your industry and market?
2. How do you challenge yourself with questions of ‘what is possible’?
3. How do you engage everyone in your business to look into the future?
4. Have you taken the benchmark test above? Why not?
Act Now:
Need to lift the leadership performance in your business? Learn how in C88 – Leadership Performance Guide and Journal.
How undefeatable is your business strategy? Consider Strategy Play – Crafting Undefeatable Business Strategies.
Want to become a part of the Entrepreneurs+ community? Sign up for my eNewsletter, and join the conversation by sending me a question via Ask Richard.
All the best in the success of your business,
Richard Shrapnel
Reference:
12 Future Technologies That Underpin The Fourth Industrial Revolution from Future Shocks by Graham Lloyd in The Weekend Australian January 28-29, 2017, page 22.
