In business schools, there is a term called ‘Disruptive’ or ‘Disruptive Innovation’, which is a widely used synonym for a new business model that builds a market place and attracts buyers from something that no one has conceived before.
Disruptive innovators are smart, think outside the box, ring in the change and build completely new ecosystems for other dependent businesses to blossom and flourish. There are obvious benefits in being the disruption that leads to success. Such a disruption also provides the first mover advantage.
But outside the business schools and these disruptive businesses, how many such disruptive innovations do we see every day, month or year? Is it safe to say that only one out of hundred or maybe thousand new businesses has been disruptive in the last three years? Moreover, if it were a big number, is it even qualified to be called disruptive?
Riding the Wave
In reality, a lot of us are not riding this disruptive wave. We hear about someone else’s innovation. Among the many innovations we hear about, only a few innovations change the landscape successfully.
This means for us to survive we have to follow the disruptor. A metaphor for this would be, if I were driving down a road, I would see more benefit following a speeding car in proximity than being the lone speeding car or being a slow driver.
This is true since that speeding car is going to clear the road for you by honking and weaving, and doing all the hard work, you can hit the brakes before you get noticed by police, or that car hits a puddle or bump on the road, since that speeding car is more likely to be noticed first by police or will notice the obstacles on the road before you do.
The advantages in business are also the same. We can learn and adapt quickly to change and learn from the disruptors’ mistakes and avoid them. And again just similar to the driving behind a speeding car example, we would want to keep up and if the car is hard to keep up with, then we look for the next speeding car and tag.
In business, the advantages of following a disruptive innovator or innovators are many. The
flexibility to think quickly, integrate and execute what we learn from the disruptors is where the followers will have to be a unique breed.
Back in the early days of the technology boom when the touchscreen technology came into use in the consumer market, it was used just as a touchpad in laptops. A few years down the line they were widely used in phones, and now it’s everywhere.
The disruptor has been a trailblazer, no question. On a par, the followers have completely evolved the innovation to take it into new markets, serving new needs and being successful. Same is the case with medical innovations. What we see as innovations in the mechanical and automation devices have been seen to be penetrating into the medical devices sector.
What a disruptive innovator does can be picked up, modified and repackaged to serve another industry or sector. Now what another follower of this follower sees and does is pretty much a chain reaction.
Following a disruptor is new age thinking, most of the new generation of innovators that we have now, have been successful just doing this — they have been good at watching that speeding car pass by, tag it, pick up speed, learn how to weave, keep up speed, avoid obstacles not by looking far ahead, but by following the speeding car and most importantly, once there is another speeding car that comes along to repeat the same steps.
Porter’s five forces — named after American academic Michael E Porter — are the Threat of New Entry, Buyer Power, Threat of Substitution, Supplier Power and Competitive Rivalry.
When the new age business aspirants look at Porter’s five forces model, they have to know how to avoid a new entrant from coming in, build a wall as you keep driving (if not possible, maybe throw spikes on the road), don’t let suppliers know what you are doing with the material you are getting from them, keep the suppliers disconnected, keep rotating the suppliers, and don’t repeat orders to the same supplier more than twice within a cycle.
Remember you are not looking to maximise on the cost price difference by trying to buy from your safe set of suppliers but are moving quickly to capture new horizons. You are building something new and always looking for that next speeding car to tag, so you can limit the power of your buyers.
You do have a higher threat of substitution, since others will also be following the speeding car. Your goal should be to be as close to it as possible, or right next in line versus three or four cars down.
Following a disruptor is new age thinking that I urge all our new generation of innovators should do. So go out and look for that speeding car and weave your magic!
(The author is an ISB alumnus and owns an IT services company based in Washington, DC)