How Can Companies Anticipate, Manage, and Grow Through Disruption?

More than ever, established organizations are aware of the genuine possibility of being upended by newcomers with radically innovative products. Nokia, Kodak, Blockbuster, and Yahoo regularly feature among big-name companies that got burnt under the wave of disruption.

Assessing the stories of these companies, one cannot help but notice a string of ill-fated decisions and missed opportunities that cost them their market value in the long run. Yahoo missed two chances to acquire its eventual nemesis, Google, between 2000 and 2002.

The Kodak management refused to see any potential in digital photography. Blockbuster failed because of its inflexible profitability model, even passing up a chance to acquire Netflix for $50 million in the process. Nokia lacked the vision of superior software that Apple banked upon, resisting the smartphone revolution and only joining the bandwagon when it was too late.

All these examples show that the disruption game has been well underway for a long time, and it is clear that failing to see the opportunities in a growing market or technology is the first step to failure.

What Happens When Disruption Takes Place?

Enterprises such as the Walt Disney Company, Walmart, Samsung remain strong to this day, having explored growth openings amidst industry upsets. Reinventing its strategy too, Kodak itself is soaring again, now as a technology company, pivoting into pharmaceuticals and cryptocurrency.

Every door that a disruptive innovation closes opens many more; the internet is a perfect example. Yet, even the internet undergoes iterations, from 1st generation content delivery networks to Web 3.0, a progression that reflects the pace of advances in technology and the market’s changing expectations.

Disruption is a given; it is no longer about whether your industry would be disrupted or not, but now about how it will take place and what your response should be. There is so much talk today about technological innovations and digital disruption.

However, many leaders fail to realize that the primary driver of disruption is not the technology itself. If it was, then the most established companies are the best placed to maintain the status quo since they have access to way more capital and have built massive brand recognition and an unshakeable amount of customer trust.

When Clubhouse went viral, reinventing social audio, big companies such as Twitter, Facebook, and Slack went to work, introducing their versions of audio chat. Yet, it wasn’t a lack of resources that prevented them from implementing the solution prior.

At the height of the pandemic, when people craved physical interaction, Clubhouse was created out of a need to replicate authentic physical human conversations on the internet.

Transforming Potential Disruptions into Growth Opportunities

The point is this: it’s not about whether AI, mixed reality, or 5G is the next big thing; it’s about what can be achieved with those technologies. Every disruption carries the potential to succeed or flop.

Why established companies refuse to embrace disruption early enough boils down to two reasons; they either don’t see the opportunity therein or consider it too risky to bank upon. So, it does take some vision to anticipate and grow through disruption.

For instance, with the massive growth of immersive virtual experiences over the years, Facebook (Meta) played a massive bet with its entire business model by placing itself at the forefront of the rapidly unfolding metaverse.

It represents the kind of visionary approach, and agile leadership required not just to anticipate and prepare but also to own disruption. Even in moments of negative disruption, such as COVID-19, agility helps leaders distinguish when and how to apply the different traits of:

• Management (coordination, organization, and planning),
• Command (direction and resource allocation),
• Authority (positional power and expertise), and
• Leadership (empowerment and inspiration).

According to Mark Zuckerberg, “We believe the metaverse will be the successor to the mobile internet, we’ll be able to feel present – like we’re right there with people no matter how far apart we actually are.”

How Business Purpose Shapes a Resilience Culture

Zuckerberg’s kind of futuristic thinking is not the only determinant of success. It only represents the kind of bold approach that is essential to approaching disruption offensively, as against staying laidback as windows of opportunities shrink.

There is a chance that the results can turn out worse than imagined, but it is evident that maintaining a sense of purpose is critical to not just surviving disruption but staying competitive at scale. As Facebook reinvents itself into Meta, the company sticks with its objective of enabling social networking, even if now on a more immersive level than before.

Consider that as technology began to threaten Walmart’s traditional retail model, it found its foot by adapting to the digital revolution in ways that fulfilled the original purpose of helping people.

According to Tom Ward, who oversees digital operations at Walmart, “It all goes back to helping people. How do we help busy families save money? How do we help them save time during their busy days?” Once the mission was clear, Walmart began investing in digital innovations that enabled them to do just that, such as in-store pickups.

Ultimately, purposefully embracing the growing dynamism of retail and reshaping customer experience around convenience became the silver bullet that helped Walmart survive.

Here are three simple tips that business leaders must keep in mind:

1. Purposeful leadership enables resilience, the quality that makes businesses grow through disruption. An organization that is not value-driven would soon fall apart. 
2. A business continuity strategy is not simply a backup plan; it’s a holistic approach of identifying mission-critical processes, building a culture of continuous improvement, and of course, managing crisis events.
3. Informed decision-making is data-driven. A continuous risk assessment framework is essential for identifying threats. It is helpful if the leadership sets a threshold based on the organization’s risk appetite.

Conclusion

Disruption has become a sort of buzzword. If anything, the term’s popularity should enable leaders to be more situationally aware of the landscape of rapid change and fiercely competitive moves taking place around them.

Amidst the pandemic, a significant disruption, the best leaders maintain situational awareness by collecting relevant information and processing the data to understand the potential impacts.

In the world of business disruption, speed goes hand in hand with intelligent decision-making. It might seem so simple, but at the end of the day, the maxim is true that if you fail to plan, you’re planning to fail.