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Disruption

 

Disruption

myths favor

the start-up

hero story

 

But reality is more complicated,

and big brands can be disruptors

 

by Uri Baruchin

Strategy Partner

Superunion

Uri@the-partners.com

 

When it comes to market disruption the stories we tell now go further than the original definitions of disruptive innovation, coined by Harvard Professor Clayton M. Christensen in 1995, or disruptive technology, coined by economist Milan Zeleny, in 2009.

Today, the corporate conversation about disruption is influenced by its portrayal in the media, even in the trade media, and a specific “disruption trope” seems to dominate. Ideally, this is the story of a small but innovative brand coming “out of nowhere,” harnessing a technological breakthrough the brand came up with (or at least was the first to exploit), growing quickly, redefining the category, and making the “big guys” reassess their business model—to mention some components of the ideal story.

The real stories are rarely as “perfect.” For example, often disruptors aren’t the first to discover the breakthrough. Around the time Uber rose to prominence there were other GPS-based ride apps, and many also approached mini-cab stations in order to build a driver base more quickly. What made Uber into a disruptive player is that it combined a slick interface with smart data analytics, ruthless recruitment of drivers and, let’s face it, other forms of ruthlessness that attracted negative coverage. Thus, they grew up the fastest.

The popularized disruption trope glosses over the details of a more complex reality. In fact, disruption comes in a variety of shapes and sizes. By appreciating a wider variety of tropes, we can learn to understand disruption better and the different roles brands can play. Here are three examples of tropes in this more complex reality:

Single disruptor Yes, there’s the single disruptor, the first to get it right and redefine a category. Google did it with its PageRank algorithm, which measured the importance of websites based on the number and importance of other websites with which it was linked. PageRank was a new paradigm that immediately made other engines of that time seem obsolete.

Disrupted Space Then, there’s the disrupted space. Often driven by technology, a new way of doing business becomes possible, but if the technology barriers are lower, there could be a whole group of disruptors competing for primacy. In the UK, you have Just Eat, Deliveroo, GrubHub, and Uber Eats—all competing for essentially the same market, disrupting many aspects of the traditional restaurant food delivery model. There’s still a chance of someone breaking away from the pack, the way Uber did with ride services. A disruptor to the disruptors. However, experience tells us that unless some surprise innovation is introduced, domination of that space would be more down to the right brand proposition and the right customer experience.

Piranha Scenario A subset of that trope is the piranha scenario. This happens when technology or supply chain innovations are available to many and the entry price is low. What we often get then is many little players biting off bits of the big brands’ business. This pattern is prominent, for example in the world of professional services. A whole swarm of little players in legal services are offering contract and wills based on simple templates and algorithms, in business models driven by search engine optimization and pay-per-click. They are slowly making a large chunk of traditional business disappear.

The more we adopt the disruption trope dominant in the media, the more likely we are to miss the many other forms it takes. Perhaps, more importantly, we might become oblivious to the disruption led by big brands. Because it doesn’t fit the dominant disruption trope, it gets demoted to “innovation,” even when it’s clearly disruptive innovation, or ignored because it’s deemed less exciting than the disruption stories the market recognizes and loves.

An interesting question is what can big brands do to create disruption? As they’re watching the barbarians at the gate, can they be a part of the disruption game? The answer is a resounding yes. Big brands have two major modes of disruption, and both are related to being, well, big.

1.         The first mode is investing in innovation and research into disruptive technologies on a scale that small players cannot afford. For example, most drug breakthroughs will keep coming from big pharma because the scale of investment required creates a huge barrier for entry. Drugs require not just technology and knowledge; their development takes a long time and that’s expensive.

 

2.         The second mode is creating pockets of disruption within the bigger organization. Encouraging side-projects has been part of the corporate culture of companies like GE and 3M for years. A more contemporary form of that mode is the “labs” model and other “innovation platforms” as made famous by Google.

Smart big brands are active on both fronts at the same time. Furthermore, if they want disruption to land in the market, they consider the marketing and branding aspects of their new developments.

Disruptions born out of the first mode—investing heavily in disruptive technologies—often require careful proposition development to go to market and be embraced by audiences.

The second mode—creating pockets of disruption—requires a different type of marketing support to help the small ideas gather momentum through the organization and gain commitment from senior stake holders.

While the myth of the small disruptor may get more airtime, and the media likes the shooting stars, there are still great rewards for the more established big players in cultivating disruption and taking it to market successfully.

Takeaways

Big brands can

be disruptors

 

1.         Learn to identify the many forms disruption can take.

 

2.         Go big and small. Invest in the big disruption of major projects beyond the reach of small brands, and invest in small, “lab”-like innovation platforms.

 

3.         Remember that success often comes not in being the first to discover a disruptive technology or market opportunity, but in being the first to get the proposition and experience right. Customers won’t necessarily immediately “get” disruption driven innovations