So many things have changed so much that our children would never know the relationship between cassette tapes and pens. Once upon a time Sony moved us from gramophones to the stereo decks. And they showed us it could be smaller with the Walkmans. It was a big deal. And then the Compact Discman. But then Apple swung in and gave us the iPods with the Itunes that digitalized the global music industry. These are products of innovations and technology. The main aim of technology is to make jobs faster, and make work easier while we have a better life.
Today, apples and blackberries mean much more to our lives than just the names of fruits. I remember how tablets used to be a form of drug prescriptions, now it’s a device. I remember when an office used to be nothing but a place, but now it’s the software. Today most mails are not in your post office anymore, but in your inbox. Organizations and people are a 24-hour click away as we’ve become wireless, paperless and cashless with the most important files, cash, papers and folders leaving the good old wooden cabinets for your tiny silicon-made computer hard drives, chips and memory cards.
It’s human instinct to be better. The biggest trigger for globalization is industrialization. Industrialization can be traced to the likes of Carnegie, JP Morgan and most importantly Henry Ford. Inspired by Henry Ford’s efficiency boom driven by assembly line production that ushered in industrialization in the 1920s, and then the postwar gigantism of the 1940s, the rationalization of government and rise of marketing in the 1950s, the age of corporate influence in the 1960s, the restructuring of America and rise of strategy in the 1970s, the massive growth in information technology in the 1980s, the globalization of the 1990s, and the boom-bust-and-cleanup of the 2000s. Every generation seems to come with its on drive but certain fundamentals remain the same; innovation driven by competition.
Locally, we’ve had our fair share of Innovation driven by competition; from heavy duty sectors to fast Consumer Moving Goods. Take for example, Jik bleach used to be one of the most popular brand names for years in Nigeria. And then Hypo bleach took out a big part of that market share by making cheaper units in sachet as against the large bottles that Jik used to make. These were driven by market feedback and survey which clearly showed that the largest chunks of Nigerians are low income earners that will rather buy the sachets for their laundry, innovation. We saw Cowbell do similar thing to Peak Milk too.
Innovation happens every day but not the Disruptive ones. Yes, not all innovations are disruptive. But when disruptive innovation strikes an industry, today’s success can be the greatest enemy of tomorrow’s success. Disruptive innovation is a strategic type of innovation.
Disruptive innovation happens when at least 2 of the three basic Economic Questions are for the first time in its industry Answered differently. Naturally, due to the nature of man (unlimited wants, limited resources), enterprise are born to tackle the three basic economic questions, which are
- What to produce
- How to produce and
- For whom to produce
Every business should identify and answer these questions. But once in a while your business should attempt to answer it differently from how your competitors do using market and consumer feedback. This is the only way that disruptive innovation can be born.
Every disruptive innovation always makes majority of that industry obsolete while underdogs all of a sudden become market leaders. You can disrupt your industry, just try answering the three questions differently.
About 15 years ago (back when screens were greyscale, ringtones were beepy, batteries lasted over a week, and I rocked a Nokia 3310), Nokia’s market civilization (value) was somewhere around a staggering $245 billion. About 3 years later, Blackberry came through to hit an all-time high of $144.5Billion. Today Nokia is worth barely 23.9Billion and Blackberry 2.6Billion with both kicked out of the top 500s. Brands rise and fall. Anyone can fall.
We all make errors at times; we make mistakes too. However, an error does not become a mistake till you avoid to correct it. Just like empires, people and brands fall and rise. Listen. Don’t be caught sleeping. Welcome to life, where tables turn. When you’re on top, the aerial view is the ‘wrongest’ view to the world. Majority of enterprise problems is traceable to customer experience and corporate culture. Take for example, how could blackberry not sought out their Bold 5 hanging problems for years, and their battery life issues. How did they fall from being the inventors of smart phones and pop emails into not being mentioned on top apps. What did they do with all our feedback? Why did they not listen?
For big businesses, it’s so easy to forget to look at what you do in the eyes of the customer or any other stakeholder at that. It’s a Golden Rule of life and business people forget. Once this happens, you begin to lose intimacy and value, and eventually the market!
Failure isn’t always an enemy but the down payment for school fees on how to succeed better next time when you learn from it. On the other hand, as you win, congratulations sometimes becomes the main enemy, “nice job” most times is a phrase you should be afraid because to me, success is a lousy teacher. It seduces smart people into thinking that they cannot lose. Keep your head and heart working and you wouldn’t have to worry about the direction of your feet. And, even after you stand on your feet, stay on your toes. In the words of David Ben Gurion, “it’s not enough to be up to date. You have to be up to tomorrow”. As you grow, never outgrow feedback, its zero payment on research. Be a future manager for it is only he that sees the future that can seize the future. For what you currently do, what steps have you taken for the future?
To stay relevant in the market, you have to be innovative. People get bored easily, you have to keep them captivated, else competition will. It’s that innovation that sustains loyalty. One of the best advice I have ever gotten is, “Eizu, no one is loyal to you, but their needs that has to do with you”. With this, I never let a win get to my head and a loss to my heart It starts off when we grow too big to think small and in details to the detriment of our stakeholders. It’s called neglect. From politics to relationship to business, we see this every time. Bear that in mind as you build, as you grow and scale, ensure you stay relevant by always putting the customer first.
The truth is that every customer gets edgier, lazier and more price conscious with time. The antidote will be convenience, excitement and where and when you can initiate cost saving for him. Staying relevant means being disruptively innovative. Disruptive innovation is when a company (most times start ups) produces and eventually masters the marketing of products that seems to be simpler, superior and more affordable than the prior products in the market place, thereby creating a new value network. It’s mostly by the new comers. At this point this underdogs takes a neglected market place that the incumbent leader isn’t interested in because its focus is to make better products at a better price for profit. While they are it, the underdog sneaks up and takes them out. Disruptive Innovation is a strategy game of the underdog.
Disruptive Innovation usually starts from lean underdogs who can build strong marketing concepts for new value market space. More African SMEs must learn about it and how to apply it. In a world where we all want to scale up fast, we are either ashamed of being small; we treat small business as if it’s a disease. It is not. It’s actually a good and stealth place to be. It’s the best position from which to disrupt the market as it requires speed. That’s something SMEs have but don’t know how to use best.
This can be seen comparison between a truck and sports car, checking out of a large mall versus buying from a neighborhood store, and even in the biblical story of David and Goliath, what we consistently see is how being a plus size can make you slow. And being small means you’re not always in a disadvantage. At least you have speed and can be more intimate and closer to the ground. Startups and SMEs are like that but tend to not realize how powerful that is.
As generations of greatness passes the baton, and our current world looks up to the likes of Tim Cook of Apple, Mark Zuckerberg of Facebook, Sundar Pichai of Google, Jeff Bezos of Amazon, Elon Musk of Tesla and their likes, they should also look out for disruption. It should be prophecy to say that they should look out for us. But we have to leverage on their experiences and also shortfalls to think differently to create something better as a model. Every time a market or industry is disrupted, its model is forever changed. The truth is, disruptive innovation is inevitable. So you’re either on the table pioneering it or you are on the menu being consumed by it. Every disruptive innovation always makes majority of that industry obsolete while underdogs all of a sudden become market leaders. The choice of which one we become is ours. Currently the real estate industry is under intense disruption. This is mainly driven by the psychology of digital natives, innovation between competitors and the democratization of technology. As the world changes further, disruptive innovation refers to a set of strategies and workflow that creates a new and superior culture, products, structure and market network that displaces competition to your favour.
A disruptive innovation is any improvement that creates a new market and value network and eventually disrupting an existing market. In my years of studying innovation, I have come to the summary that what kills companies is when we widen the gap between corporate (executives) and the operational (client serving) level teams. And also when they move strategic decision making from customer facing departments to say the accounting department. Strategic decisions are now dependent on ROI with higher IRR (Internal Rates of Returns) and NPVs (Net Present Values) ; that is when the concern is now mainly on Returns on Investments with higher Internal Rate of Returns and Net Present Values with shorter payback period as against how truly user’s lives can be made easier, more exciting and better with their products. This stays then distracted till a new company comes from the bottom and provides that more intimate and more affordable experience.
Disruptive Strategy isn’t only valid for businesses but our individual lives. We complicate things for ourselves till we neglect the simpler yet more important things. For such I ask, what are we doing right now to make our lives better and easier in the coming years?
Life and business is dinner time; you’re either on the table or on the menu, to eat or be eaten. It depends on your scale, perception and vision. In the words of the artist J. Cole, “if you ain’t aiming too high, then you’re aiming too low!“. I say if you’re not getting better, then you’re getting worse. In the words of James Cameron, “If you set your goals ridiculously high and it’s a failure, you will fall, but above everyone else’s success. Think disruptively, take over!
Strategy. Business StartUps and Corporate Restructuring Consulting