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How to Thrive in a Disruptive World
More and more business-to-business (B2B) markets are undergoing dramatic transformation, upending entire market structures, and threatening the status quo. And there is no doubt that the pace of change has accelerated in recent years, causing more leading B2B corporations to come to us for help identifying and evaluating macrotrends and potential disruptors specific to their industry and served markets. They want to better understand:
- Which mega trends, disruptive forces, and digital drivers ultimately matter to their business, and which do not.
- What they can do to either defend their business from the threat of disruption or take advantage of viable opportunities by becoming a disruptor themselves.
Related Reading: Digital Transformation: How to Commercialize Your Breakthrough Internet of Things (IoT) Offer
The Blue Canyon Approach
It is critical to employ a disciplined approach backed by fact-based frameworks when evaluating any disruption landscape. As the figure above represents, the first step is to reflect on how each of the disruptions under consideration could impact your business model. And this assessment, which must be fully tailored to your business, should address each of the factors outlined, from how your offer could be enhanced, to how monetization could differ, to relying on outside partners.
In the example depicted in the graphic, we analyzed different disruptions to learn how much change each one could create. With this understanding, these disruptions can then be assessed according to the additional dimensions of timing and impact.
Note that disruptions plotted in the upper right “all-in” quadrant require the most urgency and deserve quick attention over the next 3-year strategy cycle, while disruptions placed in the lower left should be put on the “back burner” for future monitoring. Disruptions placed in the “incubate” quadrant–high impact but longer term–will require monitoring, planning, and preparation even though there is little urgency. Finally, low impact but short-term “pilot” disruptions need more immediate attention but with less dedicated resources than those in the “all-in” quadrant.
Emerging Themes to Consider
Following this approach for several clients has led to some startling insights. For one, not all disruptions will require the same attention. In one engagement, we conceived of an opportunity where a company could improve its make-to-order availability for customers by empowering its sales channel with additive manufacturing capabilities. In another, a client facing decreased labor supply due to a changing workforce decided they needed to find brand-neutral partner organizations to build apprenticeships and inspire people to enroll in technical and trade-related programs.
Additionally, Blue Canyon has observed these other interesting and unexpected themes emerging from high-level analysis:
- Vague, ambiguous concepts: In some cases, defining, describing, and characterizing a disruption is just as complicated and difficult as determining what to do (or not to do) about the disruption. Getting it right from the start helps to streamline discussion and decisions. For example, many clients initially struggle to understand how augmented/virtual reality could change their business, but once we share how other clients in other industries now conduct experimental design with the help of this technology, this disruption concept becomes clearer.
- Different drivers for different disruptions: Disruption comes in many different flavors—and not all are technology driven. Obvious disruptions, such as the rapid emergence of the electric vehicle, can be fueled by regulations or government subsidies. Others can be driven by shifts within the customer chain. Localization and the need for “last mile” access, for example, became a major disruptor for a client that was challenged to take advantage of better, more efficient logistics and delivery model.
- Impact & magnitude: Each disruption needs to be singularly addressed; the promise or threat of one disruption may not be equal to another. In one recent engagement, we learned that two disruptions had the potential to negatively impact up to 60% of our client’s business revenue. However, only one (robotics and automation) would become a real threat in the near term given its quick pace of evolution. At the same time, we identified another disruption (channel consolidation via digital commerce) that would put our client at a competitive advantage because their forward-thinking channel network (a strategic asset) was strongly positioned to create more value for end customers.
- Convergence: Some disruptions are very interconnected. When this occurs, the convergence of several disruptions requires not just a minor adjustment to the business model, but a rather dramatic change–one that must confirm, augment, and be developed via a more precise fact-based, deep-dive analysis.
At the end of the day, decisions, rationale, and justification for investigating these disruptions and moving forward with new ideas revolves around debating and concluding with answers to two important questions:
- Will this disruption help us deliver better value to our customers?
- How difficult will this be for us to do?
When done effectively, B2B leaders can be confident with knowing how to mitigate disruptive risks and take advantage of emerging growth opportunities.