Clayton Christensen gave us the idea of creative destruction, which urges business leaders to actively replace products and/or business models before markets do it for them. Lester Thurow talked about the idea of punctuated equilibrium, a term he borrowed from evolutionary biology, which forecast an occasional, often violent reshuffling in the order of things as a matter of course. Decades before, Thomas Kuhn discussed paradigm shifts with his seminal 1962 book The Structure of Scientific Revolutions.
Each of these business thinkers were saying essentially the same thing: things change, to paraphrase Joan Didion (who probably has no place in this paragraph), in the ordinary instant. What once made you wildly successful will eventually become a heavy tax on your business, if not your wholesale undoing.
Today, the forces of change are more insidious than ever before. Innovation cycles have accelerated, periods of competitive advantage have compressed and virtually every company is staring over their shoulder to lay eyes on the next Uber or Lyft or Airbnb or Amazon hungrily preparing to eat their lunch.
Or they should be, anyway. The truth is that many leaders are less attuned to this sort of thing because, frankly, they’re busy running a business. And what an eternal bummer it can be to contemplate your imminent demise when things are going so darned well!
Contemplating how your product gets commoditized or your business model gets swallowed whole isn’t for the faint of heart. In fact, it can be like the heart of darkness. Most of us simply don’t want to go there.
But we should. We’ve found that innovation is among the top areas of increased expectation of the CMO today. Consequently, the average marketing leader is allocating nearly 10 percent of the overall marketing budget for innovation and experimentation.
Part of the solution is engaging in the discipline of design thinking, which asks us to set aside our assumptions and constraints and focus on divergence before convergence to home in on the truth according to the customer, which is often a truth they haven’t explicitly expressed.
Henry Ford said consumers would have asked for faster horses*. Nobody asked Steve Jobs for a thousand songs in their pocket. Uber and Lyft probably didn’t fall out of a focus group.
Innovations of this magnitude happen when you’re able to look at a problem space with fresh eyes, to envision the clean-sheet to-be, which is awfully hard to do when you’re mired in the as-is. That’s why disruptors often come out of nowhere. Because these innovators aren’t toiling in the current state.
What’s the solution? Go ahead and build an operationally sound as-is business, but don’t allow yourself to become so enamored by the current state you neglect the universe possibilities beyond. It’s all too common for leaders to tweak and tune at the dials, driving incremental operational change while their competitors are fundamentally rethinking how value is created and delivered with digitally led innovations.
This is why many large companies set up far-flung outposts as innovation labs physically dislocated from the distractions of the mainline operation. Because when you try to intermingle these functions you end up seeing problems through the conventional lens of your existing franchise.
That’s not to say you shouldn’t look for disruptive innovations in the more continuous world of your operational processes. Sometimes they’ll emerge. For example, 3M’s Post-It Notes fits this pattern.
The point is that you shouldn’t count on it.
(*) It’s unclear whether Henry Ford actually said this. Many call it industrial legend.