You are not immune to the risk of disruption
The biggest source of risk for organizations today is their inability to react fast enough to relevant change. More and more companies and leaders understand: no one is immune to disruption; new needs, technologies, behaviors and inventions can, do and will come from their blindside; this new form of unexpected potentially catastrophic risk must be addressed and mitigated.
Examples of such “cataclysmic” events have been circulating for over a decade. (Disruption have been killing well-established companies for centuries – only it used to be less frequent and take longer.) Kodak, Iridium, Nokia, Blockbuster are some of the more famous names on the kill-list. Another less famous industry to go through a rapid “change or die” cycle is the Hearing Aids industry that fully converted from traditional manufacturing to Additive Manufacturing (3D Printing) in less than 500 days. Other famous names, disrupting traditional industries today (mainly injuring and crippling the incumbents) are Airbnb, Uber, Expedia & Kayak and the list goes on and on.
Traditional Innovation is too slow
New Product/Service development processes take too long – by the time you have a clear pipeline of innovations, the market is no longer there. Creating elaborate, expensive, cross-organizational innovation programs with long-term goals is becoming ineffective because of the constant need to update the content, process, and structures (a need rarely met, which means these programs become a corporate necessity with very little value).
A New Adaptive Paradigm
To mitigate the risk of “death by disruption” companies must assume a new, adaptive and flexible paradigm with the following elements:
- Combining external innovation with strong in-house capabilities
- Experimenting and embracing failure as a source of valuable knowledge
- Engaging multiple sources of innovation, internal and external (e.g., academia, startups, competitors, partners, suppliers, clients, communities, students and more) with a variety of tools: POC support, minority investments, M&A, accelerators, think-tanks, open-challenges, scholarships and fellowships, government programs, resource and knowledge sharing
- Keeping close touch with many potentials and opening up a flexible opportunity space that will either create the next disruption or be effective in reacting to it (the portfolio approach).
Check out the next post about the first step in the Elastic Innovation Framework – To know (of all sources of innovation).