The Innovator’s Dilemma – Coming to a business near you!
Like the film industry, there is a growing genre of business that can be classified as ‘Horror’. The protagonist is the traditional business leader who through their organisation’s success has taken his eye off the ball. The antagonist is new technology, or more specifically ‘new’ new technology. Consider this a theatre production. Seemingly by popular demand it is now appearing in all markets.
One might even say that these are theatre adaptations of classic business texts. The Innovator’s Dilemma by Clayton M. Christensen and Geoffrey Moore’s Zone to Win come to mind.
Both of these texts acknowledge technology-driven disruption and provide a very satisfactory denouement. Yet very few established organisations appear to have taken their wisdom onboard. Like the Mousetrap production, each enactment is slightly different from the others.
- Got overly excited about the future and thus lost sight of the present (GE).
- Ignored the future (London Taxis).
- Anticipated the future, but it arrived quicker than expected (Kodak).
- Invented the future, but failed to capitalise on it (Xerox).
- Felt they owned the future (GM et al).
- Inventing the future… (Tesla).
For several of these, we know the ending.
A play of two scenes
You might say there are two scenes to consider:
- The present.
- The future.
Publicly-quoted companies live very much in the present. It is difficult to sell future benefits unless you are in growth mode. The ‘value’ players, ie the established organisations, need to deliver today. To make the case for investing in the future, they need to demonstrate that they have hit the peak of the ‘S curve’ and thus need to jump to a new one.
But like the funfair rollercoaster, one second you are admiring the views from up high. The next second you are plunging with no chance of retracing your path back to the top.
It might be said that the rollercoaster is the new S-curve, given the increasing frequency of peaks and troughs.
Or is it four scenes?
The challenge is how to capitalise on the present but operate with the future in mind. I see there being two variables business model and innovation. The diagram (below) shows that innovation can be either incremental or radical and the business model can be either current or future.
Looking at each cell:
- Current – incremental: Eg. Fine tuning of existing business processes.
- A professional services firm using AI to eliminate tedious aspects of their workers’ tasks.
- Current – radical: Eg. Abandon the high street.
- A bank selling off its branches.
- Future – incremental – Eg. Explore adjacent markets.
- A professional services firm exploring the possibility of offering psychotherapy to business executives.
- Future – radical – Eg. Explore non-adjacent markets.
- A bank exploring the possibility of converting its branches into hybrid bakery – tattoo parlours.
These cells ‘combined’ are the new ‘business as usual’. In other words, ‘run the business’ in the digital age, includes ‘change the business’ and ‘save the business’.
There are some organisations that are doing nothing in any of the cells. To thrive in the digital age, your organisation needs to be active in all four cells. You might consider how evolved your organisation is in this respect.
Linear is not enough
The aforementioned business classics get this. However the world has moved on in a manner that perhaps could not have been anticipated. The need to run these cells in parallel rather than linearly was thus not anticipated. Each new technology that arrives in the market comes with ‘volatility bundled as standard’. Exponential technology effects give rise to similar changes in volatility.
Ultimately in the traditional sense, there is no future in business, we must deal with an unknowable future today.
Towards the multiplex
Perhaps businesses today need to be less theatre and more multicomplex cinema. There needs to be at least four screens, and these need to be running in parallel.
Perhaps with less horror and drama and more action and romance?!