Disrupt or Be Disrupted!

As competition in the free market increases every day - business models and business strategies continue to evolve. Innovation will drive disruption in business models from players that will disrupt the current practices of existing business's in order to create a niche in the marketplace. The challenge for existing business's is to continue to disrupt or die in this game. Famous examples of a disrupter was Netflix who with its innovative web content streaming for movies, TV shows and a robust supply chain resulted in the closing down of traditional movie rental shops like Blockbuster and Hollywood Video. However players like Amazon, Hulu, Google have entered in as disrupters in this space threatening the very disrupter (Netflix) and stopping their march of web-media delivery domination. It seems like it is a familiar pattern the disrupter comes into the market with an innovation, flys high for a while and then gets disrupted with evolving market and technological changes. As a CIO I feel the pressures of evolving strategies, changing the game plan from time to time (though it makes your internal staff and management discomfortable) I believe it comes with role to warn colleagues of "conventional thinking. CIO's have to recognize when competitive strategies (tested and proven) can become inherent weakness. This inherently becomes a pattern of thinking that develops over the course of time as management gets into the practice of "this is/was always the way its done here". This creates myopia and inertia that brings the organization's to complete stand still. CIO's who confine their interests and practices only to leading technology and improving business processes will surely not make any significant impact in their tenure. They need to constantly have an entrepreneurial spirit, have the ability to tinker and experiment, know the heart beat and pulse of your customers and stakeholders and reduce unhealthy interdependencies. The four things I just mentioned need to be taken apart one by one:

Entrepreneurial Spirit: This is the ability develop a peripheral vision where if we can help the bottom line by distinguishing yourself with a innovative product or service that brings value add you will survive and thrive. For example when Walmart couldn't enter the financial services market as a regular bank they joined hands with American Express to create Bluebird credit cards.

Experiment: Top managers who allow for experimentation encourage innovation. The Post It note innovation at 3M, or the ad's appearing in Google Mail are examples of management allowing for experimentation. It is to recognize that most of them will fail but some will succeed. It's about allowing for a culture of trying out different things and then measuring what worked and what didn't.

Know the heartbeat of Your Customers & Stakeholders: When you have middle players or vendors that separate you directly from your customers or stakeholders either build mechanisms that give you good feedback or eliminate them so you can avoid not knowing what your customers or stakeholders. You cannot afford this.

Eliminate Interdependencies: If you have business partners who are in the same field avoid the interdependency. For example Netflix has all its content delivered through Amazon cloud services, now that Amazon has entered the same space the interdependency is not good. Google had to delink from Apple because they want to be major dominant player in the mobile space. Avoiding interdependencies in your supply chain is also very important if a supplier is threat or in direct or indirect competition.

Thoughts for today,

Sam Kurien