Disruption is a Dirty Word

disrupt

dɪsˈrʌpt/

verb

interrupt (an event, activity, or process) by causing a disturbance or problem.

On the empty streets of Paris, 2008, Travis Kalanick and Garrett Camp are having trouble hailing a taxi. In an age of smartphones and GPS tracking this seems like a ludicrous situation to be in. By the side of the road, a simple idea is born - tap a button, get a ride.

Fast forward to the present day and the world is somewhat familiar with Travis Kalanick and his ridesharing service, Uber. The term ‘disruption’, synonymous with Uber’s meteoric rise, has become a buzzword in business circles. Casually place it in your pitch and watch hungry investors gleefully throw their cash at you.

Airbnb, Uber, Deliveroo - now household brands. If you can take an outdated process and put a modern, tech-savvy spin on it, you can make a big difference. If you can do this while simultaneously making it easier and cheaper for the consumer, you’ve surely hit a home run.

What are commonly referred to as disruptive companies are in fact those that have seized an opportunity that complacent industry leaders were unaware of. They have looked at consumer demand and discovered a new commercial avenue to satisfy that demand.

If we set aside the recently aired, dirty laundry of their businesses ethics and focus on their offering, Uber ‘disrupted’ the taxi industry by producing a model that was cheaper, easier and modernized. Airbnb caught the hotel sector off guard by completely bypassing the industry and tapping into the real estate market to offer holiday accommodation to the same target demographic. The promise of a cultural experience, a personalised digital platform and a constantly evolving pricing structure that’s in line with demand and availability made it impossible for a long standing industry to compete directly. Even the music industry is at the mercy of streaming services, Apple and Spotify

It’s not about disruption, it’s about development. It's about ease of access. It's map tracking and driver details. No fuss credit card payments with instant email receipts. Black cabs dug their own grave by becoming unaffordable and unwilling to move with the needs of their passengers. Uber exploited this with a digital platform that offered passengers cheaper market rates, a wide network of drivers and real-time information on where their ride is and how much it will cost.

Building on a product’s quality, competing on price or streamlining production will always provide feasible opportunities for success when entering existing markets. New business models only disrupt industries that are slow to change. It’s no coincidence that it tends to be third party suppliers that shake the shoulders of these industries, forcing them to wake up and act.

Smart companies recognise that innovation is inevitable and adopt it as an active business strategy. The challenge is then deciding how to manage it.

As flat footed leaders soon learn, the real cost in business is doing nothing.