Disruption: Friend or Foe?
By: Josh Wermut
Tags: Digital Transformation, Innovation, Technology

Why disruption can happen to you and what you can do about it.

Soup In a Can

In 1869 an American greengrocer had an idea to start condensing his vegetables and manufacturing soup in a can. That greengrocers name was Joseph Campbell and the company he founded was the Campbell Soup Company. Today, Campbells is a household name sold around the world, and amazingly 150 years later they are still selling soup in a can.

The 501’s

In 1873, two Jewish immigrants came together to patent the use of copper rivets for reinforcing points of strain in denim pants. These reinforced denim pants became the famous Levi 501 Jeans. After selling their first pair at the end of the 19th century, Levi Strauss are still selling the 501’s and they are still just as popular as ever.

Tech Companies Are Hard

Traditionally businesses have been able to manufacture a product and sell that same product year after year. Tech companies are very different. When a tech company builds a product, they know that in 5 years they wont be selling that same product, and even within 2–3 years that product is likely to have changed. With the pace of technology, tech companies know at the start that they will need to innovate their current product, or else it will become obsolete.

The key difference between traditional companies and modern tech companies is that where the output of a soup company is soup, and the output of a denim company is denim, the output of a tech company is innovation.

The New World

Renowned entrepreneur and VC Marc Andreessen famously said:

“Software is Eating the World”

The implication of this is that all companies are fast becoming tech companies. If so, then every company needs to start focusing on innovation or otherwise risk becoming irrelevant and obsolete. But how do companies that have been so successful for so long focusing on traditional outputs suddenly shift their focus?

Innovation is a Verb

Part of the answer lies in how traditional companies view innovation. Too often innovation is a noun, a magical product created by a special type of genius that suddenly appears out of nowhere. The truth is actually the opposite. Innovation is a verb. It is a repeatable process of structured experimentation, based around a fixed set of principles that guides the way we discover and solve problems. It can be done by anyone and should be a continuous cycle focused on learning as much as you can as fast possible.

Seeds Don’t Grow in the Dark

In the same way that a seed can’t grow into a tree if it’s not given light, water and the right soil, an idea can’t grow into a viable business if it’s not incubated and supported by the right ecosystem. Traditional companies have been built on structures and processes to manage operating at scale; hierarchical, siloed and risk averse. These same structures will kill innovation. They are sure fire ways to prevent disruptive ideas from being able to develop and to ensure that the entrepreneurs in the company make a quick exit.

As the pace of change gets quicker and the future becomes more and more uncertain, traditional companies need to start making sure that they have embedded innovation well and truly into their organisation. It will be the difference between benefitting from the opportunity that disruption can offer, or having disruption happen to them when it’s already too late.

About the author: Josh is an experienced product and innovation professional having worked with clients across the Finance, Health, Energy, and Retail sectors. By helping clients follow an evidence based approach focused on the end customer, he is able to embed innovation across their business and uncover new opportunities to disrupt their industry. He is a passionate believer in the power of technology and investment to enable large scale social impact and economic empowerment.