Virgin on Business: Pardon the Disruption
If you’re not upsetting your own apple cart, somebody else may tip it over for you.
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Being disruptive used to be a bad thing. Society frowned on those who would disrupt a classroom, a meeting, the steady flow of traffic, someone’s sleep.
But that was then and this is now, an era in which being disruptive, at least in the business sense, is positively celebrated. Disruption has become synonymous with innovation, and that’s long been considered a virtue. Heck, this very magazine put a local corporate executive on the cover two months back, proclaiming him “disrupter in chief” and meaning it as praise.
If disruption isn’t already being taught as a core element in business school curricula — how to practice or defend against it — it soon will be. Businesses not being disruptive are likely to be disrupted, and to become ex-businesses. Choose which one you’ll be.
But as these young disrupters-in-training head out to find a company, an industry or a way of doing business to disrupt, they may face a question generated by those already busily disrupting away.
What’s going to be left to disrupt?
They’re too late to the party to disrupt retailing, as daily news items about chains shutting stores will attest. They’re too late to disrupt the information, media and entertainment businesses. Same with travel (at least the research and booking parts of it). A lot of inviting niches have already been spoken for.
What’s left? Some big, tempting targets that look like great opportunities but may prove incredibly tough to dislodge from their positions of dominance.
Consider higher education, a sector long viewed as ripe for plucking by nimble operators unleashing the power and reach of the internet to offer customized instruction and digital distribution of material, without the extraneous cost of a campus of buildings and a football team.
But people have been conjecturing about a massive restructuring of higher ed for years, and it’s not happening. More precisely, it’s not happening at anywhere near the pace futurists thought it would, and when it does occur, it’s often the established entities, not the upstarts, dong the experimenting and restructuring.
Another gargantuan opportunity — or one that ought to be — is health care, a sector routinely derided as too expensive, cumbersome and unresponsive. To date, however, any innovation has been driven by those already in the business. Not that people haven’t tried, but the new ventures just haven’t grabbed the audience needed to scale up to the point of being legitimate disrupters.
Blame multiple factors. Inertia — the tendency to stick with the familiar, even if nobody likes it — counts for a lot. So does the weight of government regulation and involvement, which adds a layer of difficulty for those looking to break into and rearrange a sector.
Then there’s the fact that not all the entrenched entities are asleep. Sharper operators have seen enough financial carnage in other sectors to know that if someone hasn’t come for them yet, they soon will. They’ve also figured out that disruptive technology in one sector might be merely a productivity-enhancement tool in another, especially if the incumbent players get their hands on it first and deploy it effectively. Plus, they have the resources, legacy and the customers, a huge advantage over the newcomers.
If, that is, they’re smart and fast enough to recognize what could turn out to be either threat or opportunity. If they do, all the potentially disruptive technologies now working their way into the business and industrial world — 3-D printing, the Internet of Things, virtual reality, the smart electric grid and distributed generation, artificial intelligence — may disrupt how things are done, not by whom.
There’s the challenge to would-be disrupters: Prove your disruptive approach is all that, and hope that whomever you’re trying to disrupt won’t notice.
Monthly columnist BILL VIRGIN is the founder and owner of Northwest Newsletter Group, which publishes Washington Manufacturing Alert and Pacific Northwest Rail News.