You can either disrupt or be disrupted
If you want your business to avoid disruption or even lead disruption, then you need to greatly increase both innovation and execution simultaneously to keep pace with a rapidly changing world.
I believe that business can either disrupt or be disrupted. Just because you’ve been disruptive in the past doesn’t mean you won’t be disrupted in the future. At this very moment your company is likely to be either being disruptive or being disrupted.
With change comes opportunities
Business disruption has become a hot topic, which continues to have significance in todays business world. The major cause of disruption is the rapid development and progression of technology, communications and globalization. This has created new business models at an exceptional pace. With ever declining costs, we now live in a world where the biggest global hotelier owns no rooms. Where the biggest car company doesn’t have any cars and where the world biggest media company doesn’t create any content. Crazy right?!
With change comes opportunities. I’m going to look at ways business owners can navigate these changes and hopefully give you some helpful tips on how to identify and maximize potential business opportunities in disruptive way.
From surviving to thriving
Innovation is key to stay ahead in a world of disruption, where markets, economies and policies are changing at a rapid speed. As a business leader, change needs to come internally to innovative effectively. Therefore be disruptive it requires business to do 2 things simultaneously.
1) Significantly increase to speed of implementation
2) Have the ability to seize and react to new opportunities.
If a company can achieve both of these thing: Speed of execution and agility to innovate, it goes from just surviving to thriving. To have a competitive edge in this ever changing business landscape, the capability to disrupt and execute quickly is critical to survival.
The Music Industry
Before starting Blue Badge Co I spent 4 years in the music industry running a investment business that funded established artists. At the time the music industry was going through significant disruption as the traditional record deal model was being turned on it’s heads, as alternative revenue stream such as streaming and video advertising emerged.
Companies disappeared right in front of our eyes. Arguably this was due to the a lack of leaders willing to respond to change. Take HMV and Myspace as examples. Both at one time were leaders in their perspective industries and both experienced a dramatic decline. Why? Because of a lack of willingness to recognize that the world — and their customers — had changed. Although the business was extremely innovative, struggled to execute and therefore with the lack of management structure it declined. In 2011 I was made redundant. Being made redundant is never good for one’s confidence, but in retrospect, it was a great thing as it forced me to do something new and different.
The Purple Pound
I set up Blue Badge Co to disrupt the traditionally dull and clinical mobility and healthcare market. Prior to us many products available had a wheelchair logo on them! When I first started the business people commonly said to me “ that’s a bit niche” Well, disabled people and their households have a spending power of over 200billion pounds. Not exactly a niche market!
It became clear that businesses were not meeting the needs of disabled consumers. We managed to successfully capture and respond to disabled people’s needs through innovate products. In doing so, we tapped into the so called ‘Purple pound’ and gained more custom from disabled people and their friends and family.
Innovation is most commonly seen at the start-up stage of the business, when it’s in it’s infancy. When entrepreneurs have the ability to invest in new ideas, learn new things and respond to opportunities at a rapid rate, without getting bogged down in execution. This is the energizing and glamorous part of the business! However as we have seen, when a company grows it hits a certain point where structure is required to scale.
We were required to scale significantly when Boots approached us at a trade show. After a lot of negotiating Boots agreed to start stocking our Blue Badge display wallets in all of its 2500 UK stores. Our first order was for 10,000 units! Prior to this order, we hadn’t even made 10,000 units in total!
I remember thinking, 'Yes! I have done it. But oh, I have to actually make it now'. So it was 10 seconds of elation, and then the realisation that now the work starts.
The first products arrived on Boots shelves in late 2013 and have been really successful. We since had other retailers come on board now our products are stocked in Post Offices, Lloyds Pharmacies, Argos and most recently WH Smiths.
We had to scale quickly, to delivery on growth. Scalability is much less about innovation and creativity and more about management structures, systems, and processes. Before then I had been solely focussed on product innovation, designs and styling. My attitude towards structure needed to change dramatically.
We required automated systems, reliable team structures and accountability. To enable us to delivery on this significant growth we had to invested significantly into systems and structures. We had to manage multiple sales channel and the is when automation become essential to reduce time, human errors and optimize our operations.
Operations Kills Innovation?
The implementation of strategic management structure and investment in operations was overwhelming. During this process I felt we lost some of the the entrepreneurial culture and as the business shifted from innovations to operations.
Once we have delivered to these big retailers I realized that my focus had been so much on operations and growth that we were at risk due to the lack of continued innovation.
Our original product innovation had lead to growth and success that continued for a period of time. However, as they say in the music industry “Success has many fathers”. Before we knew it, the markets had been penetrated, competitors jumped in, and our revenues began to slow down.
The innovation engine that led to the company's initial success had been killed by increasingly management structure. And with the death of our new product innovation, the company had become highly susceptible to disruption.
At this point I realised that to survive diversification was key and responding quickly to market opportunities would enable us to continue on our growth trajectory. So we began to broaden our market. With people living longer due technological adaptations, older people have a greater ability to remain longer in their own homes as their health and/or mobility declines.
Today, less than 5% of people in the UK aged 65 and over live in communal homes. This is only going to continues to increase so we saw huge opportunities for developing products, services and support for those in later life living independently. We target products not just a blue badge holders, but the older generations and their friends and family.
Our product range today boasts over 300 SKU’s and our products include waking sticks and bags, ergonomic pill boxes, helpful memory boards and wellbeing products, such as wheat warmers, eye masks and hot water bottles.
Due to product innovation and diversification, just 40% of our turnover comes from our Blue Badge wallets.
So how does a company execute on today's opportunities while constantly innovating to avoid or even lead disruption? Great companies like Apple, Google, Amazon, and Starbucks constantly find new ways to become relevant by constant innovation through products and marketing. When you look closely you’ll see that these companies are simultaneously executing and innovating.
Today companies must constantly seek competitive advantage without disrupting daily operations. How do you stop your business suddenly become irrelevant?
Marketing plays a keep role in innovation and making some noise about your business and it’s innovate products through marketing and PR. When I started Blue Badge Co I had no money for marketing what so ever, but I knew that generating PR is essential for a business to be heard.
Rather than just a term to cover business planning, Strategy need to viewed different. It should be viewed as a dynamic force that constantly seeks opportunities, identifies initiatives. A business strategy should be to innovate then execute on initiatives swiftly and efficiently.
Industries are often on the cusp of significant transformation from new technologies, the shifting of demographics and consumer habits. And wherever there is change there is opportunities and business must respond swiftly.
As you seen, products have life cycles but Brands outlive products. In my experience customers nowadays want to know the story behind the brand. Brands convey a uniform quality, credibility and experience. Brands are valuable and therefore must have values.
Part of the business strategy must be to implement those business values through the innovation and execution process.
It’s a Balance
For long term business success it’s key that leaders need to balance management discipline to achieve financial results with the agility to respond to new opportunities.
If there is not enough management in the organization, crucial breakdowns occur in the day-to-day operations. If there is not enough innovation, changes do not occur quickly enough, your people can lose their passion, your products can become outdated. You run the risk of your business and your brand can become irrelevant.
If you want to avoid disruption or even lead disruption, then you need to greatly increase both innovation and execution simultaneously to keep pace with a rapidly changing world.
You can either disrupt or be disrupted. You can either do it, or it is going to be done to you.