by Lindsey Hogan, Senior Strategist
Time to Read: 3 minutes
In today’s business world there’s a dramatic leveling of the playing field—anyone can become a competitor. It’s no longer just about putting dollars toward advertising alone, but rather focusing on the business model as a whole. This is brought to light by Dave Knox, author of Predicting the Turn and the Curiosity speaker at our Dead Cats Society event where we gather with company leaders and industry professionals to explore and understand a germane topic of interest.
In order to stay relevant, leaders need to actively recognize and react to disruptions. Businesses are no longer concerned about the fight to gain market share, but rather, the fight to manage disruption. This makes honing the ability to “predict the turn” priceless, and the game of business is higher stakes than ever. We’ve seen many once-infallible industry giants over the years fall prey to this. A well-known example comes from Blockbuster [CEO Jim Keyes] who told The Motley Fool in 2008, "Neither RedBox nor Netflix are even on the radar screen in terms of competition.”
Blockbuster is not the only one—look at Uber and the taxi industry or, currently, Lemonade and the insurance industry. The prevalent miscalculation of disruptors can be the fatal flaw of companies today. Current disruption is geared towards digital as a business model; tomorrow it could completely change. How leaders can predict this turn is threefold.
1. First, lean into innovation. Approach business leadership with flexibility and efficiency in mind. There will come a time when changing the business model is something that needs to be done in order to stay or become the obvious industry winner. Observing and keeping a pulse on innovation can help predict where the market is going and how and when the future will happen.
An example of this is subscription commerce: When it was first funded, it was not taken as seriously and now, it’s safe to say, we live in a subscription model world. We need to think about those changes and consider things like, “Was there a shift already taking place or did the innovation cause the shift?” or “How does my business utilize this shift to its advantage?” Think critically and evaluate if the innovation is an opportunity or a threat and understand the “what if.”
2. Don’t forget to consider the domino effect. One domino can knock down another domino 1.5 times its size. It’s a perfect metaphor for the business world, in which the speed and change of business has accelerated to a point that a seemingly small change can ripple out and have much larger implications. To see it, you have to look beyond cause and effect. A great example is Coca-Cola. They looked at what channels they would need to be a part of if e-commerce took off; however, they didn’t consider that e-commerce meant fewer people going into retail, leading to fewer people walking by vending machines and fewer impulse purchases of Coke.
Knox mentioned another great future consideration mentioned by Knox: the gas station owner. They don’t make money on the gas itself, but they do make money in their convenience stores. With the rise of electric cars and soon increasingly less foot traffic in the convenience stores, the rise of autonomous vehicles is a domino threat to Frito-Lay products.
The way to determine the domino threat is to identify opportunities to launch, learn and see the ripple effects. For example, Jeff Bezo launched a mobile phone to gauge the reaction of Apple and Android. The reactions of both companies helped him predict the future of the voice assistant and get ahead of the competition with the invention and release of Alexa.
3. Last but not least, invest on the side of change and disrupt disruptors. Startups are often disruptors and can be a great indicator—or a system of warning—that there is a change taking place in the industry. Startups exist because there is an unforeseen opportunity that arises in the market that could be caused by a number of factors. Rather than looking at the market share of industries, great startups that invoke change look at the one degree of innovation and behavioral changes taking place within an industry.
They look to change the Y axis, not the X. Looking back to the example of Uber, they’re not just replacing taxis. Uber leaders are seeing a space of innovation beyond just taxis, but the opportunity to grow over into the car ownership market, giving city dwellers or others the possibility to opt out of owning a car. Which brings us to the last, but certainly not least, takeaway. Boldly invest on the side of change and disrupt disruptors. Lean in and do not be afraid to deviate from the original course of action—business is a constant evolution.
Are you the leader that can predict the turn?