History is littered with companies who ignored the signs and didn’t adjust their models to suit potential future market conditions. The true disruptors remain market leaders. Here’s how they do it.
In 2008, when magazine sales were booming and AutoTrader’s monthly issues were capped at 400 pages because it wasn’t possible to bind a larger publication, the business made a bold move: It decided to disrupt itself and began the transition from a print business to a digital one.
The move was done against the advice of consultants, who believed South Africa wasn’t ready for the Internet.
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“Disruption is a process, not an event, and innovations can only be disruptive relative to something else.” – Clayton Christensen,The Innovators Dilemma
George Mienie, AutoTrader’s managing director, disagreed. “There’s an old cliché that change is like boiling a frog – you don’t notice the water getting hotter until it’s too late. We looked to the future and saw a market ripe for disruption, and we weren’t going to be the ones getting disrupted. If we needed to disrupt our own business model to ensure we stayed ahead of the curve, then so be it.”
It’s taken the company almost a decade to complete its transition. If Mienie and his team hadn’t started the process when they did, they would have been casualties of a radically shifting market. Instead, they are shaping what today’s online digital market looks like, offering their customers greater insights than any of their competitors. They’re also charging three times more than anyone else, a price point that the market accepts because of the significant value they add to their clients’ businesses.
What does it take to be a disruptor that not only stays ahead of the curve, but continues to grow in touch economic environments?
1. What got you here won’t get you there
What got you here won’t get you thereis a best-selling book by Dr Marshall Goldsmith, recognised as one of the 15 most influential business thinkers in the world. His philosophy is simple: Behavioural problems, not technical skills, are what separate the great from the almost great.
In a business context, many business owners understand this within the framework of themselves and their own skills as well as their organisations. Just because something has been successful doesn’t mean it will continue to be successful as the market changes. Kodak is one of the most famous examples of this: Kodak developed digital technology before anyone else, but did nothing with it because it didn’t want to disrupt its own model and market. This didn’t stop the rise of digital – it just meant Kodak wouldn’t be a leader in this field any longer.
2. It’s all about the execution
“Successful disruption doesn’t lie in recognising you need to be disruptive, or even coming up with bold, innovative ideas – it’s all about execution,” says Mienie, who adds that he gets bored in a room full of ideas people.
“The world is full of great ideas, but successful execution is rare,” he says. “I believe it accounts for nine tenths of success. It’s one thing to recognise you need to change and adapt to future conditions, it’s another to change your product, the way you operate, your pricing structures. The ability to do this lies with teams and employees who are willing and able to execute new systems and processes, and embrace new ideas.”
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3. It’s not a once-off process
Staying ahead of the curve requires constant innovation, which means never resting on your laurels. “The moment you stand still, you become a cookie-cutter template for others to follow,” says Mienie.
“As one product or service is peaking, you should already be preparing for the plateau and then dip – and looking to your next solution. Change is always painful, but if you aren’t geared to change, if you aren’t willing to re-engineer your business, decline is the only thing in your future.
“We define ourselves as an organisation that brings buyers and sellers together. How we do this will change over time – it already has, and will continue to do so. Recognising this important fact keeps us relevant. We see Facebook as our future competitor – and we’re braced for it. We’re always planning ahead.”
4. Be prepared to make mistakes
Travelling new paths is the essence of innovation, which means you want to always get it right. You’ll need to try new things, rejoice in successes and learn tough but valuable lessons from the failures. You’ll need to pivot and reengineer your business model. You’ll have to admit when you got it wrong.
- Critically review your business model within the context of the next three, five and ten years.
- What major market shifts do you believe might happen that would radically disrupt your current model?
- Once you have this information, start disrupting yourself before someone else does it for you.