The Value of Self-Initiated Disruption

“Within five years, if you’re in the same business you are in now, you’re going to be out of business.”
— Peter Drucker

Recently, I watched a series of fintech startup investor presentations. These early-stage companies sought VC funding to take their ideas to the next level of commerce. By the fifth presentation, I heard the term “disruption” so many times, it sounded like an obligatory disclaimer: “Our goal is to disrupt the [fill-in-the-blank] industry.” One could interpret the term as though it is a strategy in-and-of-itself; it is not. 

Disruption happens. It’s a natural force as industries evolve. Fifth century BC Greek philosopher, Heraclitus, said “change is the only constant in life.” Twenty-five hundred years later, innovators capitalize on change to address evolving customer needs, interests, and preferences, and at the same time, many businesses let change take them by surprise. 

Knowing the dynamic nature of business, and the continuous redefinition of “normal,” leaders have a decision to make — initiate change and innovation, or react to external pressures. The most effective leaders proactively look for any opportunity to preemptively refine processes, increase efficiency, and improve products and services to their customers.

By practicing self-initiated disruption, leaders proactively identify opportunities to create a paradigm shift for the benefit of their organization’s stakeholders. Austrian economist Joseph Schumpeter used the term creative destruction to describe the way free markets evolve. Drawing from Schumpeter’s words, self-initiated disruption revolutionizes an organization’s value product (what it produces) from within, destroying the old one in favor of a new, more impactful value product.

Self-initiated disruption serves two purposes. First, it preempts external disruption by existing competitors and new entrants to your business. Second, it grounds the organization in its reason for existing through the employees, customers, and stakeholders served.

Self-initiated disruption is an intentional strategy. Identification of opportunities for self-initiated disruption is a powerful tool for sustaining relevance. Here are five actionable ideas for practicing self-initiated disruption:

1. Integrate opportunity identification into regular operating reviews

Broaden standard quarterly financial performance reviews to include conversations about indicators of changing customer needs, preferences, trends, operational improvement opportunities, new technologies applicable to your business, new vendor practices, and the like. This will identify seeds with potential to grow into full-blown paradigm shifts for your organization. 

2. Flash insights

Pay attention to transformational developments outside your industry that catch your attention as potentially applicable to your organization. Successful ideation is an iterative process, often stimulated through unrelated developments. 

In the 1930s, Kutol Products, a Cincinnati-based soap manufacturer, developed a product to clean coal residue from in-home fireplaces off wallpaper. Demand for the cleaner dropped following the introduction of vinyl wallpaper, which a sponge and water could clean. Kay Zufall, a nursery-school teacher, had a different idea on how to use the product. Zufall saw a newspaper article about making art projects with the wallpaper cleaning putty. She worked with the manufacturer to remove cleaning agents from the product, added coloring and changed the name from Kutol’s Rainbow Modeling Compound to Play-doh. 

3. Customer listening sessions 

Formal customer research is a valuable source of input. Informal customer listening sessions are potentially even more powerful. Select a small group of five to ten customers to participate in a conversation with you to share what they like or don’t care for from your organization, and what they seek elsewhere. In person is best, but Zoom or Teams listening sessions can be highly impactful. Practicing the Art of Inquiry, listening with an open mind, never defending and facilitating true conversation are essential elements of successful sessions.

4. Internal startup incubator 

Incubators exist to “incubate” new, disruptive ideas with the intention of developing a product, service or business model. Creating this capability within your organization requires a clearly defined strategy and resource commitment. A benefit with this step is institutionalizing self-initiated disruption. 

5. Own change leadership

French philosopher, Rene Descartes wrote that if you choose not to decide, you still have made a choice. In context of continuous change, develop your organization’s acumen in leading change. Champion a vision of where the organization is going in the evolution of who you serve and how you deliver to your customers. 

Change is happening right now. Why not step into preemptive, self-initiated disruption and define the next chapter in your company’s story?

Written by: Dave Coffaro, strategic management consultant, executive coach, director with Members Trust Company, and principal of the Strategic Advisory Consulting Group, for Smart Brief.