Why blaming a disruptor is putting your head in the sand and 8 tips to counter it
When Uber announced the expansion of their taxi services to other major cities in Belgium, we initially expected that this news would be received with joy. However, news coverage took a negative approach. Traditional taxi companies were crying a river, devastated because Uber was stealing their customers. But what really struck us as distasteful was that even local politicians stepped up and voiced disapproval over Uber’s expansion.
We can’t understand such an attitude from either party. These parties lay blame on Uber, as if Uber is doing something wrong. But they’re not. The reason Uber is expanding, is because they’re popular. Uber is popular because plenty of users are using their services. They have plenty of users because they provide services that users find positive, valuable and necessary enough to keep using them. This is pure logic, there’s nothing unfair about it. The only thing unfair is that until Uber emerged, customers were deprived of better services for a long time and the industry allowed it to happen.
Claiming any other reasons or excuses is — to be honest — putting your head in the sand. If you have to blame your disruptor, it means that you’ve lost in the game. It means you haven’t done a good job of providing a service that your customers find better than your disruptor’s.
The only acceptable reaction is to applaud Uber’s accomplishment and find ways to provide a premium service that users will prefer over Uber’s. I’ve taken my fair share of taxis around the world and if you have done the same, you likely prefer Uber over traditional taxi services. On the other hand, in some countries, Uber collaborates with traditional taxi companies and taxi drivers. These taxi drivers tend to be honest, hard-working people who provide a service above Uber’s general standard. This isn’t because Uber makes them do it, it’s because they understood their customers and the market well before they started working with Uber.
Similarly, it’s not a politician’s duty to keep age-old monopolies alive. The time of guilds is over. All businesses, from hard-working solo entrepreneurs to the largest companies in the world, have to get up every morning and prove to the world that they’re worth the money. That’s life. Monopolies aren’t a part of that.
What stood out to us in the Uber debate is that Uber can provide a more elaborate and improved mobility ecosystem, where users can choose from a wide variety of transportation means. The taxi service simply completes that circle. This is delightful news for cities with mobility issues that remain unmanaged and unsolved even after many years. Politicians should have focused their efforts on these issues rather than keeping their old monopolies alive.
The symptoms of ‘blaming’ disease isn’t exclusive to the taxi industry. The financial industry shares the same symptoms. They probably have the worst reputation with their customers so it’s not surprising that disruptors can attract many customers in a short period of time with a slightly better service (since at least a customer is now getting a service). The travel industry has voiced similar blameful sentiments towards international digital competitors. The hospitality industry has a bad reputation of blaming Airbnb. Ironically, they end up blaming and accusing their own customers since a lot of Airbnb owners travel too and have to choose between a hotel or an alternative. Traditional media point fingers at alternative news providers and incumbent TV stations criticise Netflix (even when the solution is simple: produce better shows).
The conclusion, and point I really want to hone in on, is this: instead of blaming your disruptor, change your business so you can offer a better service than the disruptor.
Your first reaction to this might be to exclaim “easier said than done!” But that’s where we come in, because we’re here to help you. We not only help organisations disrupt their business and industries, we also help organisations to adapt when they are being disrupted and get back into a leading position.
Today, I’ll share eight tips on how to go about this — and how to keep your head out of the sand.
1. Accept being disrupted
It can be said that you’ll go through the five stages of grief when you’re being disrupted: denial, anger, bargaining, depression and acceptance. Only after accepting that you’ve been disrupted can you start working on your future. As long as you remain in one of the earlier stages, you won’t succeed. The goal then is to manage yourself so you move through every stage swiftly and accept, sooner rather than later, the fact that your industry will no longer look the way it did when you got up that morning.
This is easier for solo entrepreneurs and small businesses since they’re usually quite agile and they feel competition earlier than larger corporations do. If you’re a large organisation, your senior leadership will have to take the lead and guide everyone through those different stages. At the end of the day, your company needs to accept the disruption.
2. Willingness to change
Acceptance is one thing. Willingness to change is another. The financial sector is the perfect example for this. They’ve accepted that their industry has been disrupted, but few players exhibit the willingness to change. Many continue as they were despite knowing better.
It’s time to assemble your troops. All your soldiers need to be made aware that things will be changing and they will be the ones to lead that change. Go from following the herd to leading the herd. Everyone needs to put their shoulders to the wheel to ensure it succeeds.
This requires change management and charisma. It also requires the willingness of senior leadership to make hard decisions.
3. Create a vision
Create a vision in order to know where you’re heading in your new normal. A vision that is ambitious but not unreachable or unrealistic. It’s a fine line between the two. Don’t err on the side of caution, but don’t go too crazy either. You can always adapt, but if your vision is to travel to another solar system within the next ten years or you’ll burn your building, you’d better call the fire brigade.
Creating a vision requires quite some work whilst time is of the essence. We’ve developed a format that can help you to create a validated future vision for your business and industry. Check out our article series about our Vision Sprint on Medium.
Visions are an important catalyst and facilitator in change management. With a clear and visual vision, people can empathise with it. They can start living and propagating that vision in their daily work.
The fact that Apple is so successful in what they do is because everyone, not only the designers, cares about the design. Similarly, besides the ones who created the vision, everyone in an organisation needs to care about its vision.
4. Know your customers
This should be an obvious one. Being disrupted means that most of your customers are not coming back to you and are turning to the disruptor instead. Knowing why is the key to getting customers to return.
Another obvious one: look beyond what’s in front of you. Although the immediate reaction is to get your customers back, consider the following chart and you might find an alternative path more successful:
Your success lies in the first and third quadrants. Convincing customers that have left you to return is difficult. And it’s even harder to steal customers not served by you from competitors since you didn’t reach those customers in the first place. However, by keeping your loyal customers happy, it’ll only be a matter of time before your quadrant two customers will return because they’ll be convinced based on social proof. In a sense, it’s less costly marketing.
Finally, quadrant four is where you can make all the difference because these customers aren’t currently served by anyone. These can include multiple customer groups so it’s well worth investigating how you can reach them.
In conclusion, focus on the left side of the chart. If you get it right, the right side of the chart will naturally follow.
5. Know your competitors
Similar to knowing your customers, it’s good to know who your competitors are. A word of warning: don’t fall into the rabbit hole of focussing and obsessing over them. Doing this will only bring you back to the path of grief. But knowing what your competitor’s two or three advantages are, or those few things that they do better, can help you a long way. This exercise shouldn’t take much longer than an hour or so. Anything more than that is a waste of resources.
6. Give your soldiers weapons
Good weapons are crucial to winning battles. This’ll be a battle of a lifetime, so arm your soldiers really well. Not only with materials, but also by supporting and enabling them. Make it clear that setting aside time for experimentation is important and that challenging the obvious is good. After all, the obvious and what’s been done for the past 20 years or so clearly didn’t work out that well.
Make sure you invest when it comes to material support. Yes, spending money to earn money is a thing. Invest in ideation rooms, 3D printers, VR goggles, coffee training (coffee is the fuel of creativity), you name it. Tools aren’t everything but you’re nothing without them, so at least have the basics.
Make sure your culture of experimentation is breathed by everyone, especially the top. Also ensure that managers will not get in the way.
7. Set-up programs and safe havens
You don’t have to set up a corporate lab to help your people to innovate. Simply put a program in place that everyone can apply to. Through different stages, they will unlock different resources to make their idea happen. Low cost, high dedication. It’s as simple as that. It’s also important to organise design sprints so people have a safe haven to pursue new ideas and make them tangible.
8. Take leaps of faith
Finally, take a leap of faith. You don’t have to wait for five years of development before launching a product. After your initial validation data confirms the validity of an idea, pursue it and launch it as quickly as possible. This is cheap innovation and, contrary to common belief, it won’t harm your reputation. And if you think it would, start small and then expand into larger markets.
You will gain a ton of information after the release, which will provide you a roadmap of where to go next. If you refrain from releasing products and continue prolonged discussions on how to build something, your idea will cripple and its chances of success will grow slimmer with every passing day.
That sums up my eight tips on how to adapt when you’re being disrupted. Hopefully this article has provided you with some handles to cope with disruption or to start with disruption yourself. Remember: stop blaming the disruptors and keep your head out of the sand.