Why it’s time to ban the word disruption

Companies sliding into irrelevance are full of people talking about ‘disruption’.

It’s become a catch-all cliché that describes a world where ‘everything has changed’, where ‘competition is everywhere’ and where all companies are on the brink of their own ‘Kodak moment’ of overnight obsolescence.

This misuse of ‘disruption’ has stripped it of any accurate meaning. So much so, we think that it’s now time to abandon the term altogether and return to talking about people.

Disruption is nothing new – and it’s not the same as competition

The concept of disruption is nothing new – “creative destruction” is the essence of capitalism.

But disruption isn’t what happened to Kodak – who invented the first digital camera in 1974 (and didn’t file for bankruptcy until nearly 40 years later).

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Image: The first digital camera, invented by Kodak in 1975

And it’s not about thousands of new start-ups shaking billion dollar industries. As economic data shows, the general trend today isn’t competition but consolidation.

A glance at the numbers (or indeed a trip on America’s increasingly oligopolistic airlines) should be enough to expose this as fiction. The most striking business trend today is not competition but consolidation.

The years since 2008 have seen one of the biggest-ever bull markets in mergers and acquisitions, with an average of 30,000 deals a year worth 3% of GDP.

Consolidation is particularly advanced in America, says a report in 2016 by the Council of Economic Advisers, which also showed how companies engaged in consolidation are enjoying record profits.

Technology is high on the list of industries that are concentrating. In the 1990s Silicon Valley was a playground for startups. It is now the fief of a handful of behemoths.

(Source: Management theory is becoming a compendium of dead ideas, The Economist, 2016)

Lastly, disruption isn’t about the rapid and unexpected effect of technology. After all, the web is nearly 30 years old – most ‘disruptive’ technology has been moving from the periphery to the mainstream over many years.

Stop talking about disruption & start talking about consumers

Endless talk of disruption is stopping leaders from asking a much more important question:

“What are my consumers’ expectations and where are we falling short?”

Yes, digital is causing these expectations to rise. Desktop to mobile. Text to voice. Same day to instant. One-click to anticipatory. Every improvement in a category – whether it’s a new product, service or experience – lifts these expectations even further. Companies that can’t keep up are losing ground to those that can.

And consumers quickly get used to these improvements. What were once competitive advantages are now mere costs of entry. That’s why even the most leading-edge businesses can’t risk standing still. As Jeff Bezos put it,

“customers are always beautifully, wonderfully dissatisfied”.

But ‘disruptive’ companies like Amazon don’t start with technology, they start with the consumer. In their world, technology is the means not the end – a powerful way of best meeting people’s needs and delivering against their expectations.

Understand what consumers expect of your category, not just your brand

Rapidly rising consumer expectations are a challenge for every company – whether you’re a global sports giant or a single market charity. For example, our experience of working with adidas in football has shown us how insanely demanding today’s teens are.

Fuelled by 24/7 access to pros, experts and coaches, they have a voracious appetite for knowledge. In turn, they bring a higher level of scrutiny to new products and services, keen to understand exactly how they’ll improve their own unique game.

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And through our work with the Royal British Legion in the UK, we’ve seen how dramatically people’s expectations of charities have changed. There’s not just an expectation of greater transparency, but consumers also expect to be able to contribute in more ways than just financial – whether it’s through sharing, supporting or direct action.

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Get out of the room if anyone mentions Kodak

It’s this mentality – working hard to understand consumer expectations, then finding new ways to keep pace with them – which keeps companies relevant.

We’re calling time on the disruption dealers. So the next time you see a presentation on Blockbuster vs. Netflix – or any mention of Kodak – we hope you’ll know you’re in the wrong room.

Contact Us

If you'd like to know more about how we help brands stay relevant, contact Matt Boffey here.