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Facing disruption

#CurveJump, #MarketDisruption

How often do you face disruption in your business?

Some executives say that they face disruption every day, some say that it’s a battle fought every few years, and some say that it’s a once-in-a-career event. We could explain this difference in terms of the job title, functional role or industry that the executive is in. However, what we’ve seen through our work is that the individual’s expectations of how often he or she will face disruption largely results from the way(s) that ‘disruption’ is conceptualized. The everyday, every-few-years and once-in-a-career experiences can all be valid, but they pertain to different ways of thinking about disruption. And, there are important differences between these perspectives that we need to understand before we can respond—we need a typology of disruption. At Quarry, we use disruption, Disruption and DISRUPTION. Do you know the difference?

Disruption disrupted?

Tracing the idea of “disruption” back to the Innovator’s Dilemma, Clayton Christensen explains that a product or service is disruptive if it is able to take hold at the bottom of a market (with customers less attractive to market leaders) and then become a formidable competitor from that stronghold—one that could even displace the established market leaders.1 Christensen’s work is widely celebrated, but it has not gone unchallenged. Jill Lepore recently published a major rebuttal in The New Yorker, questioning Christensen’s sources and logic, and arguing that his theory is an excuse for why businesses fail rather than a predictive model of change.2 While disruption, as a term, seems to have weathered Lepore’s deconstruction, her article leaves us with a sense that disruption is more enigmatic than it may once have seemed. For example, in a follow-up article, Kevin Roose discussed over-use of the term, musing that “when everything is disruptive, nothing is.”

So, where does that leave us?

Roose’s statement typifies the sentiment that the meaning of ‘disruption’ has become diluted, severely limiting the term’s utility. This is consistent with the perspective that disruption could be something felt every day, every few years and faced only once in a career. The problem with Christensen’s ‘disruption’ is not that it describes a fiction—as Lepore and others allude—but that it is no longer precise enough for the phenomena we observe. At Quarry, we address this by speaking of three types of disruption: disruption, Disruption and DISRUPTION.

disruption, is our term for the everyday phenomenon—the continual stream of small changes in the market. This type of disruption shifts the status quo, in that it can change what customers expect and even demand, but it does not have a major impact on a specific product or service, or on the market as a whole. Everything from new technologies to pop culture and social media trends drive this type of disruption.

Disruption, on the other hand, describes a specific threat to a specific product or service. This is the type of disruption that you might expect to face every few years. This is what companies like BlackBerry, General Motors and Hewlett Packard are battling. Market share for specific product lines is threatened and being lost to competitors’ products.

DISRUPTION, then, is the most severe form of disruption. DISRUPTION describes the situation where an entire market is turned upside down. This is the case where not just one specific product or service, but every product or service of a similar type, is losing market share to the disrupter. This is what happened to Blockbuster, Kodak and Polaroid when overwhelming numbers of consumers switched to products of an entirely different type.

Facing disruption head on

Which type of disruption are you facing? Have you considered all three? And, do you know what you can do to combat it? The foundation of a good defense is current and actionable customer insight. Armed with our typology of disruption, you can calibrate the depth and breadth of this insight to the type of disruption you are facing. For example, the most broad, yet least in-depth insight would be appropriate for disruption, while Disruption and DISRUPTION require insight efforts that are more targeted and more in depth. Whether you are facing disruption, Disruption or DISRUPTION, face it head on with current and actionable customer insight. Know and understand what is motivating the customers in your market and take action with that insight.