The term, "disruption" has become the business buzzword of the year. But it's more than just jargon. Disruption in business involves having the ability to sense changes occurring in technology, customer behaviors, and product demands and being able to evolve quickly and implement plans outside the norm for long-term survival.
In today's feature, "Disruption 101: Transforming an Innovative Idea into Sustainable Business," Judith Aquino speaks to experts about the concept of disruption as a sustainable business model. She highlights how companies like BloomNation, Khan Academy, and BBVA have implemented successful disruptive strategies.
And in "Pay it Forward: Examining the Future of Money in America," Anna Papachristos explore four areas in the financial services industry where firms have made progress in implementing successful disruptive strategies.
Here are four ways you can disrupt and innovate your business in 2015.
Many companies fall under the pressure to continuously grow. One of the main consequences from expansion is enormous complexity. Some companies successfully manage these complexities by adopting new systems, processes, and organizational re-alignment. Others reduce their portfolio of products and services for long-term success. For example, in the early 1990s Procter & Gamble decreased the number of Head and Shoulders shampoos on store shelves from 26 to 15, and sales increased by 10 percent, according to Sheena Iyengar, author of "The Art of Choosing."
Simplification may require drastically restructuring the business system to achieve substantial cost savings.
Reinvent your business model
Much has been written about Kodak's demise. One common explanation is that it missed the digital revolution. Although Kodak was a pioneer in the development of digital cameras, producing the first megapixel digital camera in 1975, its business model centered on analog film and not on digital photography. As Kodak demonstrated, technological innovation without a business model to support it leads to failure.
It's necessary to get clear on your business model--and perhaps to reinvent it. It might be the key to your company's future success.
Focus on co-creation
No matter the industry, co-creation can transform your business for the better--and there's no better way to ensure a constant flow of new ideas than tapping into customers' creativity.
In their book, The Power of Co-Creation, Francis Gouillart and Venkat Ramaswamy discuss Nike+'s much heralded co-creation initiative, which enabled a community of more than a million runners to interact with one another and the company, increasing its market share by 10 percent in the first year. From the perspective of value co-creation, Nike has redefined "how" it interacts with customers as well as enabled a full system of interactions. Customers who contribute to Nike + offer tips, values, and benchmarks, and the company then involves these consumers in the creation of shoes and commercials as well as internal business processes. The more Nike involves the community, the more competitive the company will be, Gouillart and Ramaswamy explain, because the larger the community, the greater the intimidation factor.
Co-creation will help evolve the traditional consumer economy into one that emphasizes the value of collaboration.
More and more, staying competitive in the face of technological innovation and globalization requires organizations to change at much rapid rates than ever before. Such changes can be threatening and disruptive and usually involve adapting to a new environment and business practices. This involves continuous change management and communication that assures alignment of an organization's strategies, structures, and processes.
Take Lufthansa Airlines. When the company announced the details of an aggressive cost-cutting program in 2012, the airline failed to communicate the changes in how to execute its plan effectively. As a result, alienated employees waged strikes that inconvenienced customers and increased costs.
When disrupting your business, involve employees in key decisions and empower them to take initiative in innovating and managing change, rather than simply reacting to what has happened.