Many startups say they are disrupting something. And they might, we live in one of the most uncertain times in history. But how can corporations know what to expect? How can they know what the big changes in the industry will be?
The bad news: you’re not as good as you think figuring it out on your own.
People love talking about “disruption”. Fintech startups with the banking industry. Autonomous and electric with the automotive industry. Peer-to-peer with real estate. TechCrunch has even named its conferences “Disrupt”. Welcome buzzword, let’s all go disrupt something! And is disruption even a good thing for startups? According to Peter Thiel, not at all. It doesn’t say much about your business if the biggest thing about it is what it displaces. Tweet this
Disruption is what the big players call an innovation that they didn’t see coming. Tweet this
And why would you not see it coming? It turns out it’s more difficult than most people expect. I’ll give you one example. A technology that is getting a lot of buzz lately is Artificial Intelligence. We have a few startups in that field in our portfolio. I’m sure you’ve also heard claims about how it’s going to displace a lot of jobs.
What was your answer to that?
Let me guess… was it close to “poor guys, I’m so lucky it won’t displace my job though”?
I’ve been talking with a lot of people about this topic, and let me break out a sad truth to you: everybody thinks that. Tweet this. Doctors, consultants, teachers, drivers! “Oh, it’s going to get a lot of people out of their jobs. But for sure not in my area. We do different stuff. There’s still a lot of things they don’t understand about what we do.”
And there’re two reasons (at least) for that.
The first and most obvious is that the closer we are to something, the more assumptions we have about it. Tweet this. You have assumptions about how your job “should be”, based on how it is. You have the assumption that everything that you currently do is necessary.
The second one is that what disrupts a market is not an improved version of what you currently have. Tweet this. What will displace your industry is no necessarily a substitute of your current offering. It will be something that makes your current offering irrelevant. But by definition, it will be very different.
Take the case of the ice factories in the 1920’s. It was one of the biggest industries at the time. On 1927 came the refrigerator. Many people in that industry though “oh, sure, but that’s not the same thing”. Still, most ice factories closed down. The disruption didn’t come from better ice. It came from something else, that made selling ice almost irrelevant. And they didn’t know how to renew themselves.
Let’s bring the example to the present time:
- Think about the automotive industry. Will the biggest disruption be better or more efficient cars? Probably not. We will move towards something that will make cars less relevant. It might be advances in shared economy, better-shared transportation or communications. It might be all the above.
- Think about fintech and banks. Will the biggest disruption be a startup that is a better version of your bank? Probably not. It might be a swarm of little startups. An open architecture. A different way to deal with information. It might be all the above.
The good news: working with startups will help you.
A couple of weeks ago the Nestholma coaches took part in Tony Robbin’s seminar Unleash the Power Within. We heard much about human nature and about beliefs. In particular, we heard about how self-limiting some of them can be. To get rid of those beliefs, you need to break existing patterns and create new ones.
If you want to understand what’s coming, you need to do more than knowing the context. You need to be ready for change and renewal. Need to be agile. You need to know how to work with the change. You need to know how to work with startups.
You even need to be part of the change. You need to disrupt your own business. If you don’t, somebody else will. You need to be working on the things that will make you obsolete before somebody else does. Tweet this.
This can be scary. But instead of fearing those changes, you need to embrace them and turn them into actions. The world is going to change anyways. If you renew yourself, you’ll stay on top, and the change will be good for your business. Tweet this. If you use startups only as an innovation band aid, you might see it coming… or not.
Working with startups will help the people in your organization in many ways:
- It will make them think bigger, and raise their standards towards innovation. If working with startups becomes part of their DNA, they will be more likely to think innovatively, expect shifts in the market… and dare be part of those shifts!
- It will make them think in a sharper way. Tony Robbins says that complexity is the enemy of execution, and any lean startup will agree. In corporations, things can become complex very fast. Even when things are not complex, they are sometimes made complex. Startups are good at cutting through the clutter. They can’t afford to make things too complicated. They have to be sharp and lean.
- It will make them think like intrapreneur change agents. Change requires champions. Entrepreneurial thinking is a great tool to plan for uncertainty. It’s a great tool to even understand that uncertainty. It’s a tool for making things happen.
In short: be ready to renew your organization by working with startups… or somebody else will! Tweet this
Dr. Daniel Collado-Ruiz, @ErCollao
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