Skip to Content
October 14, 2016 Article 4 min read
Focus your business and innovation strategies around these three key elements to identify disruptive opportunities before your competition.

Business disruptors change how we think, how we do business, even how we live. Disruption can breathe new life into a declining company, or it can propel a startup into the stratosphere. But the idea of disruption makes many organizations uncomfortable. After all, it involves risk and, often, a sharp departure from the very products, services, and business models that initially led to success.

Successful business leaders embrace the idea of disruption, as uncomfortable as it can be, relying on a three-part approach to identify needs and realize disruptive new opportunities: strategy, technology, and people.

Connections inspire strategy

A business strategy around disruption is critical, since our natural instinct as business leaders is to grow the business that currently exists, rather than pivot to meet a need that may (or may not) emerge down the road.

So how do you identify disruptive opportunities before the competition? In a word, look for connections. Uber, number one on CNBC's 2016 Disruptor 50 list, saw a need — to connect people who want to go from point A to B in a cost-effective, convenient way with available drivers — and developed a web-based fulfillment and logistics platform around that connection. Airbnb, number two on the CNBC list, made a similar connection, only with vacation rentals instead of ride fulfillment.

Or take Tesla, whose full-size, four-door vehicles can be driven 300 miles on a charge, upending OEMs' ideas about the size and range of electric vehicles. Tesla is now looking at vehicle sharing, which will move the industry away from the conventional car-buying model — to what degree, we don't yet know. As a result, automotive suppliers are being challenged to understand what these changes mean to their businesses. For example, what will the impact be of a shared vehicle, which might be in use 100 percent of the time, on the components suppliers provide?

Whatever your industry, your firm's R&D group should be heavily focused on coming changes. Look 10 years into the future and, at a minimum, position your company in that direction. How will those changes affect your business? What connections have yet to be made? The answers inform the strategies you develop and execute to create potentially disruptive products, services, and/or business models.

Technology enables execution

Building upon strategy, disruptors embrace technology and leverage data. Data is the new oil, and many companies are sitting on untapped reserves. Yet leaders often don't know how to gain value from or monetize that data.

Take Netflix, which leveraged its wealth of customer data to hit a disruption grand slam. First, Netflix's data and predictive analytics capabilities enabled it to create a robust recommendation engine, which took aim at Blockbuster's hunt-for-a-movie strategy and offered an improved customer experience.

Data is the new oil, and many companies are sitting on untapped reserves. Yet leaders often don't know how to gain value from or monetize that data.

Netflix also disrupted cable television. The company used its data to identify popular series by geographic region, then built data centers to host locally popular content nearby. The move allowed Netflix to stream that content more quickly to its binge-watching audiences, again improving the customer experience.

Even network television was disrupted by Netflix. When the producers of House of Cards were pitching the series to networks, Netflix secured the winning offer because it predicted the series' success beforehand. Netflix had analyzed its data and found an insightful correlation among customers who liked movies directed by David Fincher (of The Social Network), movies with Kevin Spacey, and the original British version of the series. This unique insight allowed Netflix to commit more to the series than other networks could — no pilot and 26 shows over two seasons.

How can data analytics provide your company actionable, valuable insights that enable differentiation?

People drive disruption

For a company to embrace disruption, its leaders must see the organization's weaknesses and opportunities and be willing to take action to innovate. This starts with hiring the right people. We recently spoke with Nancy Schlichting, retiring chief executive officer of Henry Ford Health System in southeastern Michigan. healthcare is in the midst of major disruption, and Schlichting chose her successor deliberately with this transitional climate in mind.

Schlichting went outside her organization to handpick its next CEO — which alone was innovative and unusual. The new executive, Wright Lassiter, III, has been highlighted by Fast Company magazine as a leading innovator in healthcare—and a disruptor who’s building a new type of public healthcare system. Schlichting has spent her career embracing disruptors and giving her staff room to innovate.

It takes the right people to accept the risks disruption brings and to execute on strategies to take your business into new domains. Here’s our challenge to you: What needs do you foresee in a changing marketplace that aren't being met by business-as-usual? What new connections can you identify? What problems can you solve by leveraging technology and data? In short, how can you disrupt?

Will you be the disruptor or the disrupted? Check out our 15-minute video to learn more >>