Forget Innovation, Who Is Your Chief Disruption Officer?
Patrick Hanlon, Forbes, 3/20/2014
Today disintermediation—the interuptive outflanking by a completely different force—has become business as usual.
I am sitting in the back seat of a taxicab in New York City. The traffic is Midtown, stuck bumper to bumper.
“Everything is turned upside down!” the cabbie shouts, pumping his arm up and down in the air. “Five years ago it was not like this!” he cries.
The taxi driver is not talking about Midtown Manhattan traffic. He is from Alexandria. Not the Alexandria we know on the Washington Beltway, but the Alexandria in Egypt, named after Alexander the Great.
He is talking about politics. He is talking about how his family’s life there had been turned upside down. He is talking about being hit on the blind side.
You don’t see what’s coming. Sometimes that’s because you can’t see what you’re seeing. Sometimes it’s just because you haven’t seen it before. And because you haven’t seen it (or because no one has explained to you what you have seen) you don’t know what it is. Our brain, after all, only identifies what it already has seen, understood, categorized.
Moving across the continent to the Left Coast, taxi companies in San Francisco have recently suffered a disruption. Not on the geopolitical scale of Alexandria. But a displacement, nonetheless.
Taxicabs have traditionally been hard to come by in San Francisco. Taxi hubs are random and late-night riders can be left standing, eventually realizing they’ve been stood up. It was not unusual for riders waiting for a cab to call the dispatcher and find out their car had never been called in the first place. Riders missed meetings, they missed dates, they missed flights. They were frustrated.
Taxi companies threw up their hands. Oops.
But some riders didn’t get mad, they spotted a gap in the marketplace. They turned the ‘oops’ moment into an opportunity.
Along came Uber. A technological overlay on the San Francisco taxi company scene that put consumers in control. As you may know, rather than random prowling, riders and drivers find each other thanks to smartphone geolocation tracking. The competition for cab company owners was suddenly not another cab company but, as Marc Andreessen declared on CNET, “Uber is software eats taxis.”
It is evolution, it is innovation, it is disintermediation. It is disruption.
In England, a major news company is paying billions to purchase smart, brash, independent start-ups—and tasking them with deliberately competing against (with intent obliterate) their in-house competitors.
What happens to the car insurance industry when you have driverless cars?
Smart phones today can use software that ‘projects’ 3D images. So a geologist at a remote site (whether in Wyoming or Tibet) can send a core sample back to the lab at HQ for associates to study. Ultimately, similar technology could enable us to ‘send’ a ring from a jewelry shop we’ve discovered in Paris to a daughter in Palo Alto to see if she likes it. Maybe she can even try it on to see if it fits.
The words “Chief Disruption Officer” are not a title we’ve seen yet, but it might be coming our way.
Social, political, personal, and marketing disruption is sometimes inevitable. Stuff happens. Importantly, disruption is a step beyond mere innovation.
As a friend remarks, “Innovation sounds like ideas. Disruption sounds like action.”
“Innovation is an important way to ensure a company stays ahead of its rivals,” declared Samsung Group chairman Lee Kun-hee in his message to company top executives at the beginning of the year. “Continuous technological and business-model breakthroughs are needed to avoid falling prey to copycats,” Lee said. “Old strategies, hardware-oriented processes and corporate cultures should be boldly thrown away,” he ordered.
Says James McQuivey, author of the new book Digital Disruption, “Embrace the disruptor’s mindset, and adopt the practices and processes that make disruption possible. It’s a company-wide step. It’s a big step, even a giant leap, but it’s one you have to make.”
Is disruption better than innovation? Innovation often seems to be about line extensions, or new packaging. Adding more of the same (only different) is not disruptive.
Is Greek yogurt a disruptor in the yogurt industry? No, it’s an innovation. However, the yogurt category itself has disrupted other categories. Think of the breakfast cereal and egg industry, or the lunch soup industry.
Perhaps here is the place to remind ourselves that the art of war has changed. The era of mass opposing armies facing each other on the field of combat has passed.
Today’s war consists of splintered teams of guerillas battling one another in piecemeal assaults. Then dissipated like fog. The same is true in the marketplace. General Motors did not simply face Toyota, VW or Ford. They slowly dissolved under the separate forces of over 300 other brands (and a diehard resolve by GM to ignore their consumer).
Today’s customer, however, refuses to be ignored. And the vaulting presence of the Internet allows their voice to not only be heard, but solved for.
Dozens, if not hundreds, of companies have sprouted like weeds, filling gaps in the flowery meadows of consumer demand. Often, traditional marketers haven’t even considered these small patches of ground as opportunities. Disappointed by your hotel room but don’t want to become the problem traveler? There’s kipsu.com. Want to go to a sample sale but can’t be in Manhattan? There’s modaoperandi.com, stelladot.com, fashionproject.com, shefinds.com, and more. Need a room in Paris? Go to airbnb.com. Don’t want to be weighed down by books? Read your Kindle. Don’t want to own a car? There’s Zipcar, metro bikes, in addition to public transport. Options that didn’t exist or were not even a part of the traditional landscape have become preferred methods where consumers suddenly are putting their money down.
There are larger issues, too. In a terrific new book called The World We Made, author Jonathon Porritt foresees a world in which we realize that three cars sitting idly by in the single-family garage is a waste of resources. Mindful neighbor groups learn to carshare their Priuses, reducing consumption. Instead of twelve cars on the cul-de-sac, according to the world Porritt has made, there will be three.
In fact, surveys show that Millennials find it difficult to pay for the sizable wad of car payments, gas, car insurance, student loans, and rent. And Millennials counting on Mom and Dad to help them out may find themselves increasingly out of luck. Bundle those thoughts together and you create a maelstrom of marketing effects.
Another thing about being disruptive, is to know it when you see it.
As Mark Shayler points out is his book DO/DISRUPT, Kodak invented digital film technology but, because it cannibalized their film business, failed to take the lead.
For similar reasons Sony (creator of the Walkman) missed MP3 players.
Coke, Pepsi, Tropicana—even Gatorade—missed energy drinks.
Disruption comes not without its discontents. The transportation company Uber has been sued in Chicago, Washington, D.C., New York City. In Paris, an Uber driver was attacked by rival cabbies near Charles-de-Gaulle Airport, as a protest against the transportation startup.
But Uber prompted (or became part of) a bump in new thinking about transportation alternatives using automobiles as a platform. And Lyft and SideCar emerged.
Which serves us most? Innovation or disruption? As John Mayer sings, “Me and my friends, we all disagree.”
Of course scenario planning—in which subject matter experts imagine events and countermeasures—has been understood since the 1950s. The difference is that the Russians never attacked, the seas never rose, and to every extent possible, we survived.
Today, hurricanes and tsunamis are annual features, markets rise and fall like tides, technology has divided our attention span into nanoseconds, the real estate market has pancaked, and in places like Golden Valley and Eden Prairie real income for the middle class has not increased in 20 years, stability is quaking, and virtually every part of our lives has been disintermediated by forces seemingly unimaginable just last week.
The 20th century notion that a private individual could become millionaires by creating something in their kitchen or garage (as exemplified by Mrs. Fields cookies and Apple and Nike and Henry Ford before them) or by luck and circumstance (exampled by Frisbee and Post-It Notes) was in itself a disruptive notion. You did not have to be a millionaire to become one. You could change markets from your living room, you could change the world from your couch.
Last year, Jim Lecinski at Google published a treatise that declared P&G’s “final moment of truth” in the shopping aisle has been replaced by the “zero moment of truth”.
In his classic book Rome, art critic Robert Hughes relates how emboldened Christian Romans ransacked temples and smashed pagan statues. The large statue of Roman emperor Marcus Aurelius that stands at the top of the Capitoline Hill, was preserved only because the Christians mistook his noble visage for the pope Constantine. Proof that even during great upheavals and disruption, some things survive.
One of the early Dada obsessions was the concept of “unforeseeability”, when moments were so freshly invented, they had no history except their own presence. Your brain does not see it, because in order to provide recognition and clarity the brain first has to be trained to recognize what is evident or possible.
How we learn to respond to these acts—which are becoming less random and absurdly unpredictable, often marks whether or not we survive (or how we can coexist) in an already crowded marketplace. New media platforms are tugging away at dollars once automatically allocated to traditional broadcast television. Two weeks ago, Instagram and Omnicom signed a deal that handed $50 million over to social media. Such deals have been happening slowly over the last five years in experimental pokes, but now will accelerate as the so-called agnostic media dollars slip into YouTube channels, Facebook, Twitter, Kiip and every new kid on the block.
Question. If cab companies in San Francisco had thought of removing pain points for the consumer (or simply not been so sloppy), might they have continued business as usual for another 20 years? Perhaps.
But today disintermediation—the interuptive outflanking by a completely different force—has become business as usual.
Life continues at its normal pace day after day. Then—suddenly, it does not. A cabbie in Alexandria, Egypt suddenly has to uproot his entire family and secure them in a Queens flat. His family may have lived in Egypt for a dozen times a dozen generations. Nevermore.
Horses existed as transportation for humans for thousands of years. Legions of harness makers, blacksmiths, farriers, carriage makers, and other occupations enjoyed uninterrupted employment for centuries. Nothing else seemed possible. (Put another way, anything else seemed impossible.
Then came the steam engine, the train, the automobile, and the flying machine.
Whether or not we create a Chief Disruption Officer is for anyone to decide. But questions about planning for the inevitability of the unforeseen in today’s marketplace seems mandatory.
What would the dinosaurs do?
~ Curated by The Marketing Curator and TME Pass The Idea (www.pass-the-idea.com)