Clayton Christensen’s foundational writings on disruption – how innovation drives new markets in place of old ones – is required reading for anyone in business. So embedded is the concept, in fact, that the question is no longer how and why disruption happens, but who the winners and losers are.
That’s given rise to a second wave of insight around the mantra to “disrupt or be disrupted” (a very large wave indeed, judging by the 14 million search results when you Google those words). Rather than rehash general arguments why self-disruption is advisable, I’d like to focus on large enterprises – and how even those that are very successful today should be in full-on pursuit of self-disruption. Here are three main points to consider:
Self-Disrupt While You’re Still Profitable
I know a hugely successful networking company, with tens of thousands of employees, that consistently ranks #1 or #2 in every market where they compete. Still, they’re pursuing an aggressive and company-wide self-disruption effort as if their survival depends on it. That’s because it does!
Successful organizations pursue aggressive and company-wide self-disruption efforts as if their survival depends on it....because it does!
As this particular enterprise mounts a shift from a hardware-intensive model to a software and consumption-based focus on recurring revenue, they’re racing not against competitors – but against the future needs of their own customers. “Business models are changing every 18-24 months with Moore’s law,” a top executive at the company explained. “Our trigger to change was the voice of our customers and the forward visibility they expect us to have when it comes to innovation and how they’ll be consuming it in the future.”
Marathon runners know to hydrate before they get thirsty. The same can be said of companies needing to self-disrupt before they get desperate. Even then, the course can be rough. Unique workforce challenges arise, for instance, when trying to advocate preemptive change to employees who may have known nothing but success within the organization.
Self-Disrupt in Sustainable Ways
When you’re a small startup, disruption is like intellectual Red Bull that powers you through a few market cycles. You’re agile because you’re small. And you can risk a huge crash because – given how 90-percent of startups fail within a few years – long term survival is mostly an abstraction.
Large enterprises, with an ecosystem of customers relying on them, can’t afford to think this way – but neither can they afford to sit still. To thread the needle, big companies must foster disruption and entrepreneurialism within the context of sustainable and scalable models.
In resourcing your own blueprint for sustainable self-disruption, consider the five stage Sentient Enterprise methodology for enterprise agility. Also, my previous blog post on digital transformation highlights the related point that your digital operating model – how you manage processes, people, behaviors and competencies – is just as important as the technology itself. The Wharton School’s Eric Clemons, meanwhile, echoes an “all-pervasive” approach to enterprise disruption across the “structure and strategy of the entire business.”
Self-Disrupt in Directions Your Customers Need to Go
Unless you’re constantly anticipating tomorrow, even today’s biggest successes will always be on borrowed time. We need, however, to make sure our road map into the future is an accurate one for ourselves and our customers. This is especially true in analytics, where clients may be buying not just a product – but an entire digital environment that their whole business relies on.
Think back to the logic of Moore’s law, and the reality that corporate timetables for standing up innovation at scale can be 18-24 months. If it’s only then that we realize we stood up the wrong solution, we can spend another two years of unraveling and re-building. That whole cycle counts for eons on the technology clock – plenty of time to put yourself and your customers out of business if you make the wrong call.
Especially for companies in a trusted advisor role, getting ahead of disruption is a make or break proposition. Whatever customers think of you now, they’ll abandon you – or go out of business along with you – if you’re not there with the right innovations needed for tomorrow.
Mr. Ratzesberger has a proven track record in executive management, as well as 20+ years of experience in analytics, large data processing and software engineering.
Oliver’s journey started with Teradata as a customer, driving innovation on its scalable technology base. His vision of how the technology could be applied to solve complex business problems led to him joining the company. At Teradata, he has been the architect of the strategy and roadmap, aimed at transformation. Under Oliver’s leadership, the company has challenged itself to become a cloud enabled, subscription business with a new flagship product. Teradata’s integrated analytical platform is the fastest growing product in its history, achieving record adoption.
During Oliver’s tenure at Teradata he has held the roles of Chief Operating Officer and Chief Product Officer, overseeing various business units, including go-to-market, product, services and marketing. Prior to Teradata, Oliver worked for both Fortune 500 and early-stage companies, holding positions of increasing responsibility in technology and software development, including leading the expansion of analytics during the early days of eBay.
A pragmatic visionary, Oliver frequently speaks and writes about leveraging data and analytics to improve business outcomes. His book with co-author Professor Mohanbir Sawhney, “The Sentient Enterprise: The Evolution of Decision Making,” was published in 2017 and was named to the Wall Street Journal Best Seller List. Oliver’s vision of the Sentient Enterprise is recognized by customers, analysts and partners as a leading model for bringing agility and analytic power to enterprises operating in a digital world.
Oliver is a graduate of Harvard Business School’s Advanced Management Program and earned his engineering degree in Electronics and Telecommunications from HTL Steyr in Austria.
He lives in San Diego with his wife and two daughters.