A Guide to Disruption

About 20 years ago, it was impossible to imagine that a small company could take a slice out of the pie reserved for big organizations. In many industries, corporations had traditionally faced very little competition, enabling them to sustain massive market share.

However, technology has proven to be a real game changer. Since the mass adoption of internet, around 1994, business dynamics across the world have significantly changed. The direct connectivity afforded by the Internet has made ‘disruption’ possible. It has enabled much smaller businesses to disrupt traditional business models and offer a product or service that was previously offered by a market leader.

It all started with digital products being created and delivered online. From news and music to television shows and movies, everything was going digital.

Online businesses truly started posing a threat to the big players when they moved towards 'decoupling,' which is the recent separation of consumption activities that were previously done together. This enabled numerous businesses to restructure the traditional business model. For instance, consumers can choose to go to the mall and try on clothes, but then buy them through online retail giants that often offer low prices.

Disruptive change has enabled numerous brands to change the competitive landscape by giving the power of choice directly to the people who matter – the consumers. So many businesses have ventured into digital disruption, but only a handful have moved on to become global successes. What's the difference between those who succeed and those who fail?

At Lions Innovation, Harvard Professor Thales Teixeira proposes an interesting solution to this question. During his talk, he presented a step-by-step approach for digital disruption.

It begins with doing your homework. It's crucial to understand the consumption chain in the specific industry or segment. By having a closer look, you can break down the stages of the process that consumers are involved in, and then identify the weak link. The weak link is a point of opportunity. For instance, Uber spotted that there was a lack of effective communication between consumers and drivers, and created an application to address this. The rest, as we all know, is history.

Once the weak link has been identified, it's time to determine how the value will be delivered to the customer. The framework and strategy are crucial to develop a proposition that can garner investor interest and eventually be put into action.

Next up is specialization. It's important for the disruptor to offer a specialized service or product that drives customers to them. Specialization also has the added benefit of reducing costs related to time and resources.

Finally, it's essential to anticipate the competitor’s response. The incumbent can use recoupling or an alternative strategy to drive the newcomer out of business. This happens quite often; hence, research about this will not only help identify the response, but will also help counter its impact.

As the technological landscape continues to evolve and business models change, disruption is becoming an integral part of today’s digital business models.

Creativity Partner

Hill+Knowlton Strategies