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Are you a “disruptor” or a “disruptee”?

disruptionAt some point, your company will be one or the other.  Disruption is a way of life in the corporate world, and companies that are disrupted suffer greatly.  In fact, few companies survive major inflection points in their markets.  Some completely miss the inflection point while others either create second-rate plans or they bungle their execution.

In 1960, the life expectancy of a company in the Fortune 500 was 75 years; today it is at 15 years and dropping.  Disruptions have become a way of life.  Even seemingly great companies can miss inflection points in their markets.  Those that recognize change and effectively address it, will survive to be the disruptors, while those that don’t will get disrupted – the disruptees.

Netflix disrupted movie delivery.  Result:  Blockbuster gone.
Amazon disrupted the book industry.  Result:  Borders gone.  (Actually, Amazon has disrupted quite a few companies.)
Uber and Lyft disrupted the taxi industry.  Result:  Wake up call received, but taxi companies don’t seem to be upping their game.
AirBnB disrupted the hotel industry.  Result:  TBD.

Which type company is yours – disruptor or disruptee?

Characteristics of Disruptees: Any one of these can kill you.

  • They fail to appreciate changes in the market, whether customer behaviors/expectations, technology, business models, new entrants, etc.
  • They are invested heavily in status quo, with the entire company optimized to deliver what may soon be not nearly good enough.
  • Their installed base demands continuity and backward compatibility.
  • Old product designs are too cumbersome to move quickly without starting over.
  • They don’t have the needed expertise for desired changes and are unwilling to build or acquire it.
  • Sacred cows and old biasses flourish, affecting even the best of intentions to change.

Characteristics of Disruptors:

  • They recognize the possibilities of a new reality and refuse to be slaves to the past.
  • They deal with the installed base issue to regain quickness.
  • They fully commit to appropriate initiatives.
  • They modify their investment profiles to fit.
  • Regular check-ups and adjustments keep old biasses at bay.
  • Critically, they are either new companies or are willing to find a way to recapture their entrepreneurial heritage.

Don’t be a disruptee.  If the market is changing or you see the potential for change, leading is far more effective than trying to maintain the status quo.  It’s also a lot more fun.