HOW TO EMBRACE DISRUPTIVE INNOVATION: THE ARGUMENT FOR TROUBLE

The word “disruption” carries with it a lot of negative connotations.  To put it simply, the idea of disruption scares people because it taps into the undeniable human resistance to change.  Disruption isn’t synonymous with competition, instead, it’s a fundamental change within an entire industry.  Change is necessary for progress, especially in the technology industry. Not embracing “disruption” in today’s market means getting left behind while the world moves forward to better and more efficient technologies. Keeping up with trends and looking for ways to change processes for the better, is one of the best ways to stay relevant, so it’s important to consider how “disruption” can be a valuable tool for your business.

What Is Disruption?

Disruption is a fundamental, lasting change in the ways a business or industry functions.  Disruptors can be new products, sales approaches, pricing models, business models, regulations, employee personalities, or some combination of the above.  Disruption is all at once destructive and creative, terrifying and invigorating.  It literally uproots and changes how we think, behave, do business, learn and act day-to-day.

Disruption has the power to displace an existing market, industry, or technology and produces something new, more efficient and worthwhile to replace it with.  According to disruption guru and Harvard Business School Professor Clayton Christensen, no company is so essential that it can’t be replaced and no industry is off-limits to change (Christensen has also published many books on the subject on disruptive innovation, including “The Innovator’s Dilemma” and “The Innovator’s Solution”)

Sticking to Christensen’s definition (since he was the one to coin the phrase in 1995), disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading organizations, products, and services.  Christensen posits that an established organization fails because it doesn’t keep up technologically with its competitors.  However, he argues that the mudslide isn’t caused by stagnation or ignorance of new technologies.  Instead, a firm’s existing value networks don’t view the disruptive innovation as profitable enough.  Their business environment doesn’t allow them to take advantage of emerging technologies or ideologies when they first arise because their development can detract scarce resources from their current sustaining innovations the organization is relying on to stay competitive.

Fixers And Builders

In his TED talk “The Argument for Trouble — Disruption in Business,” another industry leader, Mark Modesti refers to himself as a professional troublemaker and Customer Solutions Executive.  He goes on to argue that nothing worthwhile ever happens, both professionally and personally, without trouble.  The greatest value comes from hard-work, trials, and tribulations – trouble.  According to Mark, there are two prevailing mindsets, the fixer, and the builder.  The fixer is playing an endless game of metaphorical whack-a-mole, swatting down problems as they pop up.  Meanwhile, the builder is busy playing a metaphorical game of High Striker, utilizing measured focus to hit big.

The fixer and builder mindsets have a huge impact on how businesses are run and how they react to disruption. Mark goes on to tell a story about his time at Blockbuster.  What Mark didn’t know then, is that the future founder of a start-up called Netflix visited Blockbuster’s headquarters and offered to take the brand online.  At one point, Blockbuster even had a CEO who wanted to make the move to digital.  That CEO and the soon-to-be founder of Netflix were both shown the door.  They were troublemakers.

Leadership at Blockbuster didn’t want to face the challenge of transitioning to a new reality.  Instead of facing disruption head-on, they eventually had no choice but to face the challenge of displacement.  The new digital world left no place for Blockbuster.  But the bottom line is, you need both fixers AND builders.  The fixers at Blockbuster found themselves “patching up a ship that was headed to the salvage yard” and eventually looking for a new ship altogether. When you feel the world changing, and a builder comes to your door with a new idea that could revolutionize your business or industry, don’t be like Blockbuster.  Think about disruption strategically or run the risk of displacement.

Thinking Strategically About Disruption

Be Tomorrow’s Leader

When disruption is embraced by your business on a cultural level, it can catapult your organization into an exciting new territory.  Disruption is necessary for growth, so you must ensure that you are the one disrupting your own business in positive ways before someone or something else leaves you in the dust.  According to a 2016 survey by Mint Jutras, 88% of respondents feel that there is a risk for their business or industry to be disrupted.  By leveraging disruption and change acceptance as part of your internal culture, your business will set itself up to be a leader of tomorrow rather than an innovation denier.  Embracing disruption isn’t a call to arms, it isn’t encouraging anarchy and a rejection of business norms.  Disruption is an inevitability that your business can better prepare for by building a culture that routinely embraces change because it is a long-term state of being.

Enable Performance Through Technology

Technology is one of the biggest disruptors of modern times.  An internal shift to embrace disruption means re-evaluating your internal operational models.  Too often, businesses reinforce the belief system that things are OKAY as is.  Everyone likes change; no one likes to be changed.  Just because something is “okay” doesn’t mean that it can’t be improved.  Identify where improvements are needed and how these improvements add value.  Then decide how best to make these improvements.  Will disruptive technology help?  Creating a strategic approach to disruption will enable better performance and maximize the value of modern technology.

Drive Innovation Among Your People

In a past blog post, we revealed the secret to a successful ERP implementation is employee engagement.  The same is true for any disruptive time.  No matter how cutting-edge or innovative your technology may be, your people are the heart of your organization and thus, must lead the way in any cultural or behavioral shift.  Disruptors within an organization can be encouraged and fostered, made to conform or pushed to another organization that will value their insights.  A few years ago, Trish Gorman published an article in Forbes that identified the four roles that disruptors usually fill within an organization: The entrepreneur, the provocateur, the thought leader, and the problem solver.

Look To Adjacent Markets

When developing a strategic approach to a disruptive business model, it’s important to look outside of your own industry.  Whether your goal is to become an industry disruptor or better prepare for potential industry disruption, you must be proactive in your approach by looking to other markets for inspiration.

The Value Of ERP In Disruptive Times

The last thing you want is for your business to be held back from embracing innovation by its technological infrastructure.  As your business evolves, you must have an ERP solution in place that is able to adapt as your business evolves.  Mint Jutras recently published a free whitepaper titled, “The Value of Agility in ERP during Disruptive Times,”  in which they explore the ways in which modern ERP’s ability to adapt to changing environments should be added to features and functionality as a key qualifier in the ERP selection process.

In the past, customization in ERP meant spending lots of time and money to alter source codes.  With business conditions, processes and models more fluid than ever, no business can afford to spend such vast amounts of time and resources in order to implement change.  No wonder so many businesses choose to put off implementations no matter the cost of putting off such decisions.  Luckily, modern ERP is much more easily configured to individual needs without coding (granted, some businesses really do require feature and function customizations beyond what is available in commercial software, in which case your ERP partner, like ACC, should be happy to oblige).

Similarly, adding functionality to an ERP system used to be much more difficult than it is with modern ERP systems. The complexity of maintaining the fragile balance of different pieces of the system while adding very specific functionality often slowed down the upgrade cycle.   Through the popularization of cloud technology and the adoption of the SaaS (software as a service) model for ERP vendors, API’s are the way forward for adding functionality to ERP systems.  Whether your solution is cloud-based, on-premise or hybrid, the ability to externalize customization through API compatibilities is of growing importance as the multi-cloud world grows every day.

Mint Jutras’ whitepaper posits these three signs that show you need to invest in a new ERP system in order to prepare for and embrace disruption:

Three Signs You Need A New ERP System

• Is your current solution rigid and unmoving?  If so, you need a new system.
• Is your current solution easily connected to new services or components? If it’s not, you need a new system.
• Are you able to “customize” your system through configuration and tailoring rather than costly and time-consuming coding? If not, you need a new system.

We live in disruptive times.  All of this disruption can have an enormous impact on business application needs.  An agile ERP system will allow you to innovate, evolve and embrace change in order to stay ready for anything.

Contact us if you’re ready to embrace disruptive innovation and become a troublemaker today!