How does a legacy company prepare itself for disruption? Should you redouble your efforts to make your products better? That’s no way to deal with disruption, Sandipan Roy, the CSO of Isobar Asia Pacific, told Spikes Asia 2017, reminding me of one of the scariest movies I saw as a child.
The natural company has two speeds, he said – the speed at which it conducts normal business, and the speed at which it reacts to a crisis. Both are reacting to visible things. However, according to Roy, disruption is invisible and at a speed somewhere between ‘normal’ and ‘crisis’, meaning that legacy companies can’t work out the speed at which they need to work to avoid disruption.
To me this sounded rather like that chilling opening scene in the film Jaws, when a young woman goes for a midnight swim before being eaten by the eponymous giant shark. She swam at normal speed out into the waves. She also had a ‘panic’ speed that she could swim at, but by the time she realised that might be sensible, she was too busy being eaten. In between, the danger crept up on her unseen and invisible, denying her the chance to react.
A legacy company is similarly blindsided by disruption, which does things in a way that the legacy company finds hard to spot. “The focus of the disruptor is on different, not better,” says Roy. “The better is done by legacy companies; they’re making their product better and better, but the disruptor is saying ‘I don’t want to fight that game, that battle. I want to make something that is completely different’.”
So can the legacy company spot the tell-tale ripples in the water, the shadow of an impending disruptive attack? It’s not easy. Watching the latest technological developments gives clues but no firm answers. Streaming technology, for instance, existed for many years before Netflix emerged and started destroying the DVD industry. “Tech is an accelerator of disruption,” says Roy. “But the pure disruptor needs a business model.”
Instead, a legacy company could focus on what the disruptor does – meeting unmet needs. But this is difficult when your whole company is pointed towards making your products better. (“Optimisation is an enemy of the creator,” warns Roy. “Optimisation doesn’t get you anywhere.”)
Look, for instance, at Apple. The iPhone was a success because it met unmet needs. Now the company is focused on making better iPhones, rather than looking at different things the customer wants, such as voice. In short, said Roy, the better and more advanced the iPhone in your pocket, the greater the danger for Apple. It’s a sobering thought, but not as sobering as that first realisation that you are about to be eaten by a shark.
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