Unintentional Disruptors: Leading a Post-Pandemic World

 

from the kitchen table of Michael Legut, PhD.

To lead effectively, executives must understand change and the characteristics of disruptors. The notion of using disruptors to stimulate company growth is a topic that has gained some interest in the business community. There can be unintentional disruptors, such as Covid and AI, and intentional disruptors such as electric vehicles. In this blog, I will provide some thought-starter ideas based on the book Deliberate Disruption for Transformational Growth by Michael E. Raynor. In Michael’s book, the notion of deliberate disruption is an intentional effort within a business as oppose to unintentional disruption where the event is more unplanned.

Key Takeaways

• When a company defines a “new frontier,” it isn’t doing anything disruptive, unless it provides some new “technology or set of processes” to set it apart from its competitors.

• Some disruptors are unintentional, such as Covid and AI, and can create opportunities for innovation and help companies to abandon existing ways of thinking. 

• Disruptors can be effective if they create innovation that offers equal or better value that competitors cannot match. 

• Intentional disruptors might be accomplished by creating an innovative entity within the company. 

Some general principles separate intentional disruptors from unintentional ones. Intentional disruptors are specifically designed to create “a new business model that defines a different frontier.” Typically these disruptors require the development of new “technology or set of processes” to set a business apart from its current identity and its competitors. This often requires significant change to business models that are currently driving financial success. This type of disruptor can also lead to changes in the company brand identity (i.e. Facebook to Meta) and create an image crisis which can be a very difficult change to implement. 

Another general principle of intentional disruptors is that the outcome must offer equal or better competitive value that other competitors can’t match. Sometimes established firms attempt to create disruption. They borrow practices that work for startup firms or they hold “idea hunts” to generate lots of concepts or they buy a small start-up. In these cases, the potential disruptor often fails to produce the desired innovation because the leaders miss a crucial point. That is, disruption requires leaders to abandon existing ways of thinking about the company. An intentional disruptive effort should impact the way leaders think, how employees engage in their work, and the company culture. For these reasons, intentional disruptions can create excessive risk for an established firm and they often fail.

Not all intentionally disruptive efforts are truly disruptive. That is, they don’t necessarily generate a business model transformation. For example, if a company pursues a “new frontier,” such as solar power, it isn’t doing anything particularly disruptive because it is just adding an alternative source of power for electricity. Electric companies use solar power as part of their business models. On the other hand, when electricity was harnessed, it became an unintentional disruptor. Its availability forced companies to do things differently. Leaders began to abandon the way most goods were manufactured, new products were created and it altered how humanity existed. Unintentional disruptors are ones that are more or less forced on businesses. These disruptors also require leaders to change the way they think and how employees engage in their work. With these disruptors, a business must adapt or they may fail.  However, they can also stimulate momentum for innovative changes and new frontiers.

Today, unintentional disruptors, such as Covid and AI, can also trigger disruptive changes to how businesses will operate in the future. For example, changes to the work environment related to Covid have triggered a need for adaptations in business activity which changed how leaders and employees work. With Covid, hybrid and remote work activity changed the office environment from a butts-in-seats culture to one of in-office-time flexibility. Some companies took advantage of that situation by promoting more hybrid and remote work environments as a way to attract talented employees. In addition, they found that employees who worked in hybrid and remote situations tended to be more productive, and the company needed less office space. Thus they found competitive value in spending less for office space and attracting talented employees who wanted a remote or hybrid work environment. As an unintentional disruptor, Covid has forced leaders to think differently about how employees engage in their work.

AI is unique example of an unintentional and unplanned disruption which is creating momentum for new business models and innovation. This new technology has unknown power to learn, capture, organize and produce information. In this case the unintentional disruption is AI’s unknown technological power. It is forcing businesses, industries and governments to think differently and consider its impact on their business operations. A recent observation in Yahoo Finance noted "AI is on the cusp of an electricity-level shift in our relationship with a certain technology ....no one in business, the media, education, government, or any other institution should feel self-conscious about continually evangelizing on the power of AI. One day, that evangelism will merely be table stakes."

While the full impact of AI is TBD, it is also clear that leaders are already harnessing this unintentional disruption to explore opportunities for innovation and new frontiers that offer competitive value.

Let's consider how companies might anticipate and harness the disruption of AI. Sad to say but I could see a time where the music industry creates a business entity that is driven by AI. In this scenario, the industry might create a popular music company where AI generates new music based on the profile of the population that makes the most purchases. In this case, the music company would only need to have live talent to deliver live performances for ticket sales and media promotions. Call me crazy but it is possible.

Both intentional and unintentional disruptors can provide opportunities for innovation. Certainly, intentional disruption can be less risky and more manageable. Many established firms try to create intentional disruptions by flooding the company with new ideas or buying the innovation. However, because disruptors can create changes to the brand, the strategic direction, business activity and cultural norms, this activity can be a costly error.

So how can you invest in intentional disruptors to create successful business innovations? It is important to note that experiencing disruption in an established industry is like going back to gills after your species develops lungs. It can be so disruptive and create such a radical change that harnessing the disruption may require a separate business within the company to produce successful innovations. Instead of testing new ideas at random, or buying an innovation and trying to fit it to your firm, create intentional disruptors using an internal start-up as the innovative entity. In this manner, you are creating a structure to develop the “new frontier” within a strategic framework of the larger company. Like a start-up, this new organization could be free to create new processes and adaptive models where they test various permutations of innovations, pick one that works and apply a “variation-selection-retention model” until the innovation adds the desired competitive value. Essentially, an internal start-up can be used as an intentional disruptor to create an innovation and then passes the innovation on to the established company. Many establish firms already apply this approach. 

Disruptors can be a benefit or a barrier to your organization. Some can be anticipated, and some can be intentionally shaped to fit within the company’s strategic plans. Savvy leaders will need to learn how to leverage unintentional and intentional disruptors to drive innovation within their companies. How does your company deal with business disruptions?

As always my goal is to help leaders understand how to improve their leadership skills, build effective work environments and contribute to their organization’s success. For additional consultation, I can be reached at www.leaderimage.com or on my LinkedIn page.