The Anatomy of Disruption

Nitin Kumar
Jul 21, 2017 · 3 min read

In the last decade or so, we have seen so many iconic companies of the past get disrupted by new technologies and business models. These companies saw the new players as benign, not in the same league as them, not what the market demanded or conducive to the economics of how they made money.

Over time, these so called benign technologies find the right enablers e.g., think of how open source technology from Linux came, many mainstream OS like Solaris ignored them but they would find the right catalyst in the backing and investment from IBM. When an enabler catalyzes the new comer, it gathers momentum and becomes visible to the market, customers and partners with companies of all sizes, scale, reach, customers and niche players. Once the technology is established, performance improvement, innovation and new business models come into play and further amplify the capabilities of these assets — which have now changed posture from being benign to becoming a threat to larger players who saw them as unworthy. Amplifiers can also include acquisitions by larger players, capital infusion or several strategic partnerships.

By this time new technology has invaded the market and displaced established players. Attributed to legacy methods of the established players who have so far only countered traditional competitors with traditional responses, their high cost structures and inability to respond quickly, disruptors continue to benefit and scale.

It is important for established players to understand the anatomy of the disruption lifecycle and manage to each part of it. Speculating scenarios and trying to manage infinite possibilities could quickly get to a point of diminishing returns. Competitive scans across several technologies, its impact at each stage of the lifecycle and developing ability to respond to these non-traditional plays in now more important than ever.

Strategic and tactical response to disruptive competition is very different from traditional competition. In addition, disruptive technologies may not have one vector of impact, they could come at the legacy players from multiple fronts e.g., threat of obsolescence to multiple pieces of the technology stack of established player or making an entire established channel structure obsolete or something else.

The figure below demonstrates a few differences between traditional and disruptive competition, its key attributes and levers.

One does not always have to see a disruptive technology as adversarial. Traditional players at scale today need continuously scan for technologies of interest and ask themselves a few key questions:

- Is this technology benign and irrelevant to the current state and/or future state problems of their customers?

- Can the so called benign technology become a business model in itself or reconfigure an established business model?

- Can they become the enabler of catalyst rather than leave that opportunity or space to someone else?

- What happens is this technology falls is to the hands of their competitors?

Becoming an catalyst and amplifier is always better than being the disrupted, most companies should monitor today’s technologies across this lifecycle.

- Could they wait for it to become mainstream and come at it as an amplifier?

- How could they strategically respond to this, if the disruptive forces turn against them?

Originally published at https://www.linkedin.com on July 21, 2017.

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Nitin Kumar

Written by

Growth Strategist, C-Level Executive & Management Consultant : A gadget freak & global nomad with a unique perspective on everything !

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