Fifteen years ago, a small and relatively unknown start-up named Netflix approached the behemoth called Blockbuster and offered to co-create a new online content delivery method. Blockbuster passed on the offer.
Just a month ago, Sweet Briar, a long-standing college in Virginia, with 700 active students and $98 million in the bank, declared it would be going out of business before it could blow through the cash. In both instances, business models succumbed to disruption.
Disruption or "disruptive innovation" is a term coined by Clay Christensen to describe technology's impact on an industry, but I believe the concept extends far beyond technological change. Disruption results from business and social transformation. The word itself implies collapse, messiness and uncertainty, which are followed by a new (though fleeting) equilibrium.
No institution -- for- or not for profit -- is immune to disruption. Organizations that want to survive in today's and tomorrow's marketplaces must embrace disruption as a permanent reality and seek remedies for the chronic condition it is.
In seeking such remedies, organizations and their leaders must start by asking a set of questions that can act as a "tonic" to disruptive circumstances. For startup companies, these questions are arguably more intuitive to answer. They enable boards, CEOs and employees to address the reason their organization exists, the circumstances in which it exists and the ways in which these circumstances are changing.
Existential questions to help treat disruption
- What is our purpose? Or, as Simon Sinek put it so well, "Why do we exist and why should anyone care?"
- What are the immediate circumstances within which we exist? Are we relevant? Where on the inevitable ''S" curve of product or service maturity are we?
- Who must come together to face these disruptive circumstances? Are we embracing the wisdom of many or only those in the rarefied air of the c-suite? How do we determine our big ideas?
- Do we have the right knowledge and skills to get our big ideas right? Can we attract those with the right skills to join us? How can we rethink our organizational structure and imagine hiring new roles to counter disruption?
- Does our current culture consistently exhibit the values and behaviors that will sustain us and enable our future? These include: innovation, collaboration, openness, agility, tolerance for mistakes, experimentation, relentless customer focus and much more.
These questions can be deeply uncomfortable and will take longer than an afternoon to resolve, but I believe leaders must answer and re-answer them as long as their organization exists. If organizations fail to answer the right questions, they will succumb to the shocking toxicity of disruption, a lesson we've learned from the downfall of iconic companies like RadioShack.
We can learn from RadioShack's mistakes, and we can also learn from self-aware organizations that are asking the right questions and developing strategies to overcome disruption. Major League Baseball (MLB), for instance, is riding high today in terms of revenue, brand and relevance. Yet the current incubator for MLB's future success, Little League, is failing to attract and retain a pipeline of action-hungry kids so crucial to the sport's future.
MLB has acknowledged this reality and has defined a strategic context for investments that seeks to alter an inevitable future in which the baseball business becomes another Blockbuster.
In the end, disruption can only be countered by a radical shift in mindset grounded by organizational and leadership self-awareness and brutal objectivity. Achieving both takes deep thinkers courageous enough to ask these existential questions and respond to the uncomfortable answers that result.