Real Disruption & Real Innovation

I hit #covid-19 content exhaustion within ten days of being on lock-down. This post is about a time before. Before, we all burned out on COVID content, “disruption” was one of the longest-running and played out buzzwords. A quick google search yields millions of results with Medium pundits sharing their POV. A quick history of the disruption shows that “Disruptive Innovation” came of age in 2008. Popularized among managers and leaders by the influential HBR article “Reinventing Your Business Model”. Disruption was then co-opted by marketing departments across the world. 

Does “disruption” serve us as a model today?

Let’s consider the disruptive innovation model and how it may or may not apply to our current shared experience.

The standard model typically describes two primary players. Often “uber” vs. “taxi cabs”. You have undoubtedly heard of the “uber-fication” of the next marketspace. In this basic setup, taxi cabs are the incumbent and uber is the challenger. The model typically diagrams the passage of time. The incumbent gains momentum with early innovation. As the incumbent grows market share challengers are increasingly challenged to catch them. Catching up not only requires a great idea, and investment, but it also requires time. Many lean startups will work feverishly in an attempt to lessen the time advantage. The challenger must race to catch up to the incumbent or risk running out of cash. 

A Head Start & A Faster Car

The rules of the race have changed. The “real disruption” of COVID-19, is a game-changer. We all have simultaneously experienced an abrupt reset. A few have seen an immediate benefit. Most are feeling at minimum socially isolated. Many are reeling from the stop in the economy. In this new race, everyone was reset to the starting line. Only, few have a race car, some have a bike, and some have a scooter. The starting line is reset but there’s still an advantage to having a faster car.

The Disruptive Innovation Model

• The incumbent builds a lead 
• The challenger then needs to innovate and there’s a factor of a head start that they must overcome
• For the incumbent, as the market dominance extends in time the cost to maintain the lead increases
• The challenge of innovation is also one of the consumer expectations, can you innovate without losing your audience
• Radical innovation may be at odds with what is expected of the brand

Real Disruption: Same Starting Line, Different Vehicles 

• Most business has been impacted at the same time
• The implications are that the headstart in the disruptive innovation model is diminished 
• Rather than time, digital maturity is a larger advantage
• We have all had a similar amount of time to pivot and those that had stronger platforms in place are more quickly pivoting 
• For organizations that had invested in a digital platform (a car) their time to market is faster than digital laggards who now need to mature their digital platform AND innovate their business models

The Impact & Relevance of This Real Disruption 

We see many commonalties in looking at associations and arts, culture, and entertainment (ACE) marketspaces. In brief, typical of both business models are these key factors:

• Mission-driven;
• They are not for profit;
• The mission includes the education of an audience;
• They “sell” memberships or subscriptions;
• They rely on donations, and sponsorships that are a critical revenue;
• Endowments and grants also contribute to the bottom line;
• And digital and in-person eCommerce (live events, meetings, conferences) are vitally important.

The short term shift to on-line events is clearly a question of survival for many. Quickly adopting new business models is critical given the business models driving associations and ACE organizations. For many, the annual conference is not only a member-driven occasion. Members often see the most member-value at the annual conference. The annual event is also a key value driver for an ecosystem of partner organizations, vendors, and sponsors. In other words, the network effect (social network effect) is a core driver of revenue and member value. The live event simply can’t be fully replaced with a digital platform. Community and emotional connections are also required.

MVP

Across the board, the pressure on the business is rapidly changing work cultures. Where previously an organization may have taken 18 to 24 months to launch a new platform or offer best-in-class content now they must reconsider if a two-year cycle is sufficient to ensure survival. Can an organization afford to keep a process like:

1. Platform Selection,
2. RFPs
3. Proposals
4. Proposal Presentations
5. Committee Decision
6. Finalist Selections
7. Final Decision
8. One Year Build
9. Huge Singular Launch

Agile

Some organizations are suddenly becoming more agile. This is very exciting. We are witness to the evolution of an agile, lean startup mentality almost overnight. Decades-old ideas are suddenly relevant to more organizations. The pressure of the current situation is leading some to innovate very quickly. All of a sudden a minimal viable product (MVP) approach is acceptable. We are also seeing many pivots and very quickly.

As an advocate for a lean product, and agile thinking I am optimistic that this moment will open up new ways of thinking and working. Ultimately innovation may provide an answer for the survival of organizations that are vital to society. I believe culture can change for the better.

Many of these ideas were discussed in an Adage and Breezio/AMS Jobs/AMS Geek co-presented webinar “Actual Disruption: Panic, Toothpaste, & Toilet Paper. Part 1. Actual Disruption: what happens with live events now? Part 2. in this series is scheduled for May 7, 2020.