Recently I was asked to find a few more examples of companies that have failed to see the warning signs. See I did some quick desktop research. I found the usual suspects. We all know and love the Kodak example. You’ve probably also gone through the Blockbuster example. In Australia, we are witnessing the Pizza Hut example. Then there are the others that have lined up and been disrupted in recent times: Borders, Barnes and Noble, RIM/Blackberry and a really interesting one I read recently about Nokia (they must’ve done something wrong.…). One that I hadn’t thought about too deeply was the Street Maps example.
You might be thinking, “…is this guy crazy?!”, everyone knows that paper based maps have been disrupted, totally! It’s ok, I’m well aware of that. What has struck me when doing this research is the multi-level horizons that have occurred in the disruption. The interesting insight is when looking for more information on the topic, I came across an article from 2009 (find the article here) about what was happening at that time and the perceptions of the key players. This article clearly demonstrates the wonderful power of the internet and the accessibility of information, as well as making it very hard to write predictions of the future in this day and age.
The quote for me in the article that perfectly describes the inability to understand changing customer needs is..
…The head of Ausways, which publishes Melway, agreed. ''Our research shows that people still use the book to work out and plan trips and also to drive there,'' said Murray Godfrey. ''Then to get around a country town they will buy a local map or sometimes use their nav unit, but even the nav units are really out of date.”
“Our research shows….. people still….” A massive thank you has to go out to whoever did that research. At that exact moment in time, their conclusions held true based on the information their were provided. I wonder what would have happened 7 years ago if they asked a question in the research along the lines of…. “If you have a device that could those things too (eg. plan trips, automatically update maps etc.), would you use it instead of the paper? Please use your imagination on this as the device doesn’t exist.” What would’ve been the customer insight to this? How certain of their future and how nav units would play in that future would they have been? Perhaps their willingness to protect and hold onto their existing, fading business model stopped them from asking these questions. Perhaps, like Kodak, they did ask this question and ignored the answer. Worse still, perhaps that had someone in their organisation already conceptualising the idea and without any support it was buried in the ‘never-gonna-happen’ pile. (all hypotheticals)
Whatever did actually happen, it is clear that they lacked some skills to disrupt themselves. As I have read in the Smart Disruption report released by Optus (found here), the most sustainable and enduring companies are those that have the ability to self-disrupt:
“.. the most important innovation requirement for organisations is to anticipate and address customer needs. This ability to self-disrupt will lead organisations on the path to a sustainable future.”
This is not something that will happen once, it is something that should happen in cycles. All good business models are built as a response to emerging/changing customer needs. As the model matures over time, an expiry date can be attached to the model. Those that reconsider and look to change ahead of the steep slope to expiration, disrupt and find a new white space in the market to go after. Those that don’t, cease to exist. In all markets, for an organisation to endure, this will happen again and again. It’s figuring out the length of the cycle and the point when the slope starts to steepen is one way to prepare and disrupt before it is terminal.
This brings us back to Nokia. With such a rich history of following innovation and self-disrupting, it is sad to see where it has landed today. From a pulp mill, to rubber (even galoshes) and cables, computers into mobile phones. It is a company that had a well established culture of changing as the market moved. If you are only thinking about disruption as something you need to do now because of the explosion of digital and the world becoming a smaller place as a result, then you will have some fun for a short time. However, what you will do is create something with a best before date and without a consideration to the new horizon, could be expired not long after it has the shelves. Smart disruption is a capability you should invest in for every business. If you consider that you expiry date could be up at any minute, you will search for the ideas to act on when that slope becomes steeper. You will create your own sustainable future.
About the author: Ryan Liddle is a passionate innovator, entrepreneur, executive, creator, analyst and advisor. Through more than 20 years in industry, he works closely with organisations of all sizes to bring ideas to life.