How To Disrupt Yourself

For years now, everybody has been talking about disruptive innovation.  It’s not enough just to play the game anymore, the aim is alter it completely.

That’s a lot easier said than done.  If you are a thriving business, you will have to change a lot of what made you that way.  There will be no guarantee of success and the road forward will be uncertain, with no previous model to emulate.  It’s not just products of process that will have to change, but the entire business model.

Where do you start?  In a brilliant HBR post  Whitney Johnson, who runs a fund dedicated to disruptive investment, makes the salient point that we must first disrupt ourselves.  To create a disruptive future, we must often walk away from a comfortable present.  I agree and have some ideas about how firms can go about it.

The Problem of Change Management

Many think that disruptive innovation has something to do with change management.  It rarely does.  In fact, in his book The Innovator’s Dilemma, Clay Christensen points out that most often, change management efforts fail with respect to disruptive innovation (he gives one example of a success, but in that instance it almost killed the CEO who tried it).

Change management can be effective when you understand the problem and have devised a viable solution.  When the barbarians are at the gates, so to speak, a plan must be enacted and the entire organization needs to mobilize.  That’s a very tough management challenge and those who can perform it must be highly skilled and determined.

However, disruptive innovation happens in the face of no such threat, but when things are going great.  Operations are profitable, the needs of the most demanding customers are being met and the business press applauds the company’s thoughtful and visionary leadership.

Then comes along a comes something like Google or Netflix or social media and everything is turned upside down.

That’s what makes disruptive innovation so dangerous and so interesting.  It upends an existing order that seems to be working well.  The reality is that incumbent firms tend to get better and at things people care less about.  Eventually, the basis of competition will change and old metrics of success become useless.

From Great People to Great Teams

It’s become a mantra in the corporate world that “you need the best people.”  It’s one of those things that’s so embedded in the culture that no one even bothers to question it.  I’ve always thought that it was a bit of a cop-out.

Where do the best people come from?  They don’t just appear.  They need to be recruited, trained, managed and motivated.  All too often, I’ve seen managers complain about the quality of people who have been successful before and after working with them. Obviously, talent wasn’t the problem.

One of the most common mistakes is that managers have a very narrow definition of what qualities “the best people” should have.  That leads to an overly homogenous culture which looks and thinks alike.  We’ve all known companies like this (you can usually spot them as soon as you walk in the door).  They are echo chambers for the status quo.

Instead of trying to find the best people, we should be trying to build the best teams. There is nothing wrong with conformists, but they should be constantly exposed to people with those who like to question authority.  Oddballs are great, but need have people around who can keep them on track.  No one person can have it all, but teams can.

Create an Innovation Unit

As I’ve noted before, innovation is often confused with strategy.  They are, in fact, very different.  Strategy is what steers the ship and therefore is the purview of the captain and his chief officers.  Once they get involved, the whole enterprise moves.  Failure is not an option.

Conversely, innovation is saturated with failure.  The destination is uncharted so nobody, no matter how smart or accomplished, knows where they are going.  Failure is a fact of life ans so needs to be done quickly and cheaply.  As Thomas Edison said of his quest to invent the lightbulb, “I didn’t fail 10,000 times, I found a 10,000 things that didn’t work.”

The paradox is that once you get senior management involved in innovation in a significant way, it ceases to become innovation; it becomes a central part of organizational strategy and failure becomes extremely costly and time consuming.  In other words, it’s an absolute mess.

A growing trend is to create innovation teams made up of largely junior people.  They don’t have the weight of the enterprise on their shoulders, so can do all of the things that regular staff don’t have time to do.  Meet with hundreds of start-ups, keep up with the hot trends (most of which will go nowhere) and help the enterprise filter through the noise.

Test and Learn to Scale

As I noted above, the unnerving thing about disruptive innovations is they’re usually pretty crappy.  Existing customers don’t want them and didn’t ask for them.  They perform poorly by conventional measures and deliver on metrics that no one’s demanding  By the time the value of a disruptive technology is clear, it’s often too late for incumbents.

Take for example the new trend of “second screen” apps like Viggle and Get Glue.  By most standards, they aren’t particularly impressive.  They don’t reach a lot of people, their interfaces are a bit clunky and the user experience isn’t particularly enthralling.  It’s not a technology that marketers should bet their company on.

However, there are a half dozen companies competing in this area, representing massive investment and lots of very smart people who are dedicated to creating the next great media experience – an interactive companion to the TV screen that is individualized for each person sitting in the room.  Surely, it will find a place in the marketing mix.

The thing is, if you wait till it reaches scale, you’ll be too late, spend too much and achieve too little.  You test when an innovation is still crappy so that you can learn, like Edison did, the 10,000 things that don’t work.  You fail cheaply.  Later on, when the technology has matured and it has become a strategic imperative, failure is not option.

Ask The Question Everyday

The biggest innovation pitfall is falling into the myth of the mad scientist.  People often assume it comes from the work of a lone genius – a Steve Jobs or Thomas Edison – who works behind closed doors and then one day comes out and shouts “Eureka!”

In actuality, innovation is combination.  It most often arises through active collaboration among people with diverse skills and perspectives.  That’s why so few enterprises can do it effectively.  Large organizations breed conformity, strong leaders encourage a singular vision and don’t like to incorporate ideas that are off-script.

Most companies have built up significant barriers to innovation.  Culture, strategy, internal processes and the needs of existing customers all conspire to stave off ideas about doing things differently.  Therefore, the question every organization needs to ask itself is the following:

If someone came to you with a breakthrough innovation, how would they sell it?

Whether that person is a junior employee, a vendor or a start-up, what barriers have you built that serve to keep important ideas at bay?  What people, processes and values have you devoted to ensuring that the new and wonderful doesn’t get lost in the shuffle of the day-to-day grind.

You need to ask yourself those questions everyday.  It isn’t easy or comfortable, but if you don’t disrupt yourself, chances are that someone else will.

– Greg