Digital disruption: Lead, follow, flail or freeze?

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The word “disruption” is on everybody’s lips. And because it’s the buzz-word of the century (so far), it’s being misused. People are branding incremental evolutions as “disruptive” to get attention (true disruptions are discontinuous; a leap up, not a shuffle forward). Everybody fancies themselves a “disruptor”. I’m sure it’s appearing on a disproportionate number of CVs all over the world: by nature, the true disruptors are few; the disrupted are many. Whether being a self-identified disruptor equates to tangible, transferable skills has yet to be seen.

In the face of disruption (or sometimes merely the risk of impending disruption), it appears that organisations can be cast into one of four buckets: Leaders, Followers, Flailers and Freezers.

Leaders

Leaders (in terms of innovation, not necessarily market share) are self-explanatory. They see the path first and execute fast to uncover and service undiscovered needs, knock-together new business models, create new products/solutions, digitalise previously analog experiences. Most of the time, they’ll proceed with a high degree of confidence because the end point they’re heading for is strongly hinted at (but never really guaranteed) by data, customer insight, or both. The planned consumer/user outcome and surrounding experience will provide so much compelling value (or at so much lower cost) that the predicted ROI is practically unassailable. Leaders have a combination of vision, strong customer engagement capability (to test and validate that vision), and the pace at which to get to the market first.

Followers

Followers track leaders, playing a game of catchup. Usually the strategy is to streamline the business, neutralise the features gaps and ramp up agility so that the follower can one day overtake and sustainably outpace the leader. Improving agility is a great objective to have, but what happens when a follower catches up with a leader? Suddenly, the sign-posts are all gone and the absence of a unique market vision becomes glaringly apparent. At this point, followers who do have a solid vision can become leaders. But most will flail. They lack the direction of the leader they were following, so guideless experimentation follows. Others will simply freeze. They stop dead and wait to see what the leader will do.

Some follower organisations exist for many years as such. They closely track the leader, mopping up demand created primarily by the leader – on the basis of lower price, local presence, or some other differentiating attribute. The risk, however, is that other followers are close behind. The top followers have good agility, but bypass the need for vision and customer engagement capabilities by relying on the leader – which presents a barrier to achieving (and sustaining) market leader position.

Flailers

Business leaders, IT execs and CDOs all think of themselves as successful disruptors (at least in the making). In a sense, only time will tell, but in reality most are reactive flailers. Flailing is usually triggered by an unfounded vision or an external disruption, where a product category has just been disrupted. Flailing is often a knee-jerk “do something…anything…quick!” response to getting leap-frogged by the competition. They don’t have the vision, the data or the customer engagement capabilities that are necessary to triangulate a solid path. They focus on fast and forget about right. It’s a high risk strategy. Unless pure luck intervenes, flail equals fail. By throwing resources in different directions, the organisation not only goes nowhere, it erodes working capital – compromising the organisations ability to move forward when a clear strategy/path is found.

Freezers

Freezers lack both market vision and the ability to run rapid, low cost experiments (they have no agility). A low risk appetite makes “wait and see” the default action with predictable results: the company is paralysed by fear, unable to commit to anything, and the competition draw further and further ahead. As time goes by, the task of catching up becomes more and more difficult. Staff get frustrated and the organisation collapses (slowly, and then suddenly). Freezers who have a large number of locked-in clients can glide for a surprisingly long time; until competitors see it is time to relieve them of their customer base.

 

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