Disruption can be a key to great success in industry, as proven by many prominent companies who have disrupted their industries. Consider Apple, with its marketing of the iPod in the face of the musical sales industry, or Google Maps within the industry of map making. Another key example is Amazon, which caused bookstores to become outdated in the age of the electronic reader and book selling online. Following are 8 reasons why it is beneficial to shake things up in your industry, disrupting the current status quo.
1. A Fresh Start
First, disruption allows you to reevaluate your business model to examine your customer value proposition. Customer value proposition involves the identification of a job that needs to be done and the creation of a process that gets the job done. In the case of Apple and the iPod, the job that needed to be done was supplying music electronically to its costumers. Apple’s business model then allowed customers to obtain free music when they purchased the iPod. Job done. The opportunity to re-invent your business model by introducing and focusing on radical ideas such as this one is a huge benefit of disruption.
2. More profitable
Disruption also allows a company to create an ideal profit formula, thereby defining its own value within the market. The components of profit formula are (1) the revenue model (price x volume), (2) the cost structure (cost of resources involved), (3) the margin model (the necessary monetary contribution of each product sold), and (4) the resource velocity (speed at which products can be turned out and sold). Using this approach to production, your company will reach large groups of people in a wide range of demographics.
3. Refines your resources
Disruption allows you to clearly define the key resources needed to allow your newly designed business model to run efficiently. This will help you identify extraneous elements and organize new resources to sustain the disruption process. For instance, perhaps your new resource is the technology that drives an idea such as Google Maps.
4. Faster response to changes in the market
Disruption allows you to streamline the processes that are key to running your business model. This covers such things as training and the everyday functioning of your company. Again, eliminating extraneous processes and focusing on processes that efficiently support your new business model will be key. From this perspective, disruption allows your everyday business processes to quickly respond to shifting competition and to offer a threat to other disrupters.
5. You are the pioneer. You make the rules.
Another benefit of disruption is unencumbered development. Hiring expert teams to brainstorm new ideas for the benefit of your business model will do the trick. Brainstorming sessions such as “hackathons” will keep your company not just in the loop, but at the cutting edge of your business market, as your company continues to disrupt your industry. Hand-in-hand with unencumbered development is unconstrained growth. This refers to your company’s ability to target “everyone.” In the case of Amazon, for example, sales of books and the Kindle were aimed at all demographics, not just readers of certain books. This is a key advantage of disruption.
6. Undisciplined Strategy – Disruption doesn’t follow traditional business strategy
Another benefit of disruption is undisciplined strategy. This is a strategy that allows your company to compete on 3 levels: (1) low cost, (2) constant innovation, and (3) customized offerings. These elements support your company’s ability to overcome the competition. All of these elements describe how undisciplined strategy will give your company the edge as it creates the “big bang” of disruption.
7. Flexibility to adopt new technology
Disruption also allows your company to take advantage of cutting edge technology. The example of Google Maps in the context of navigation was mentioned above. Apple’s digital music and Amazon’s digital books are other examples. In fact, disruption almost always involves taking advantage of and benefiting from new technology.
8. Easier to spot trends and future disruptors
Finally, the experience of disruption also allows you to sense early on when another company is on the verge of disruption. You will learn that disruption often occurs after some significant failures, since there is usually a learning curve when it comes to taking over the current market. When you see a company on the verge of taking off, you may be able to jump on the bandwagon or shake up your own business model to join in to or head off the disruption about to happen.
These are 8 reasons why disruption reaps great benefits in the business world. All of these benefits support shaking up your business model and feed each other in the context of disruption. For more discussion or if you have any questions about disrupting your industry, please feel free to contact us.