I recently went along to a London Business Forum seminar on ‘Disruptive Innovation’ by Clay Christensen, author of ‘The Innovator’s Dilemma’ and many articles and books on the topic of disruption. The seminar was very interesting and inspiring, and to watch it in full – check it out here.
Of particular note is the marketing case study at 1:10:00 on the video on why people choose a McDonald’s Milkshake in the mornings, and particularly the ‘job’ that the milkshake is ‘hired for’, but I’ll perhaps leave that to a further blog post.
What I wanted to put down a few words on was everyone’s favourite topic: ‘The Disruption of Established Industries’. Of course, with the advent of widespread adoption of smart phones, and companies like Netflix and Amazon, it seems that many traditional firms are going out of business. In this article by Andrew Grill on digital disruption he points to few affected companies in the UK like Jessops, HMV and Waterstones.
At the start of the video above, Clay gives a rather long metaphor of the steel industry which is worth persevering through – the point is that many large and established companies tend to prefer a flight to higher margins than to fight against new entrants for lower margin businesses. And of course, the flight never ends, and the rising competition carry on eating away at your traditional sectors until you lose your audience and your business.
When pushed by an audience member of what a big business could do to limit this effect, I believe Clay’s answer was that companies need to invest in R&D and be ready to embrace new and more modern techniques and ways of working.
In the same vein, Duncan Niederauer, CEO of NYSE Euronext, was recently speaking about the NYSE Century Club: “Our theme this year was ‘life begins at 100’ and the discussion focused on building businesses that last. All of these companies started out as disruptors in their industry and over the course of their long histories have had to respond time and again as competitors have attempted to disrupt them. How do you thrive for so long under the constant threat of being disrupted? All the CEOs agreed – you must continually innovate, reinvent and invest in R&D. I have a framed quote in my office that makes this point very clearly – ‘Assume that nothing lasts forever. There is no more difficult and dangerous decision than to ditch a proven business model for an unfamiliar alternative, but good companies have to do that. The business landscape is littered with the wreckage of companies that clung to what used to work.‘ In other words, if you stand still and cling to the status quo you will not survive.”
So, what can businesses do to stand the test of time, and what can B2B marketers do to keep their companies fresh and embracing new ideas? I think it comes back to basics. To use Clay’s terminology, what is ‘the job’ that your company is ‘hired to do’? If it’s PR, then you need to use the most up-to-date communication channels that your client base may be using, from email to LinkedIn to Vine! Focusing in on what a company’s value proposition is, and then communicating in the most appropriate manner will not go away – in fact, in an ever-increasingly busy marketplace, it’s more important than ever.
- Of digital riptides and original sin – was the decline of newspapers inevitable? (gigaom.com)
- The Best Description I Have Seen of ‘Disruptive Innovation’ (economicpolicyjournal.com)