Back in April Bruce Kasanoff and Michael Hinshaw published 7 ways to disrupt your industry on fastcompany.com. I've been going back over it in preparation for my upcoming workshop and talk at UX Australia - Sources of innovation.
The article looks at ways to disrupt an established industry - the sort of breakthrough innovation that is in demand right now, but elusive. The article doesn't offer much in the way of either preamble or conclusion, beginning with a simple, stark statement:
Massive disruption is coming, and the only question is whether your firm is going to cause it or fall victim to it.
The seven ways offered are:
One of the challenges we see in our work with organisations is the transition from insight to concept. Having a framework within which to interrogate your insight and explore specific directions is a valuable addition to your methodology. However, I don't entirely agree with these seven; or, at least, I would add to or reframe some of them.
1. Totally eliminate your industry's persistent customer pain points
This is a great piece of advice and the key emphasis needs to be placed on 'Totally eliminate". Most companies 'improve' or 'reduce' but don't tackle the fundamentals underlying those pain points. In many cases, doing so requires challenging basic beliefs about what an industry exists to do. Luke Williams (author of disrupt) calls these 'industry cliches' - they're the pattern an industry gets itself into and, once they do, can become blind to alternatives.
This leads to all sorts of symptoms, and most companies spend their time reacting to those symptoms, instead of questioning the basic 'shape' of their product or service. The concept isn't challenged. But once you set yourself the goal of "totally eliminating" the pain points, you give yourself permission to question everything.
The other thing that happens is you are forced to question what you believe are the 'pain points' of your customers. You must go out and conduct direct research with your customers (and, if you're smart, your competitors and people using adjacent industries) to understand what they perceive as painful. Don't pre-judge: go out and look a-fresh.
3. Cut prices by 90% (or more)
I like that this sets a very agressive goal. The initial response to which would be: "Are you crazy?!" As in the pain points above, most industries have an established basis of competition that sets out, in broad terms, the revenue and cost structures. Now, everyone in the industry is looking for ways to boost revenues by upping their prices a little; and most companies are actively trying to find ways to reduce costs, be it through economies of scale, buying in bulk, using a dominant market position to drive down supplier prices (just one danger of monopolies), productivity and efficiency gains.
Organisations work very hard at carving out a few % in savings; or adding a new feature or function to help justify a price rise. What very few set out to do is radically change the cost structure of an industry. I heard of a great example yesterday: Malcolm McLean - a trucking magnate from the '40s in the USA. He saw his trucks sitting idle at the docks as the ships were unloaded and decided there must be a better way. The result was the metal shipping container and a revolutionary restructuring of not only trucking, but freight as a whole. Over the next 30 years the cost of moving a tonne of goods dropped over 95%.
You can turn this around, too. Ask yourself: what would a premium version look like, where customers willingly pay double, triple, ten times the price of the competition. What would that product or service look like? Valet parking, for example.
In either case, what you need to understand is: what do your customers value the most? The least? Because if you get it wrong: you'll totally destroy the value of the product or service and the price will no longer matter.
Whether you look to cut costs or create a premium offering, the exercise in deconstructing your offering, examining the value to customers, and looking at completely new configurations could lead you to brand new insights about your existing product, which will themselves be disruptive.
7. Make loyalty dramatically easier than disloyalty
I love this idea but as an MBA my mind immediately translates it into "Barriers to switching". Basically: how can we lock a customer in to our product/service? Businesses do this all the time, and have become very good at it. And it comes in all sorts of different forms: exit fees; proprietary data formats; proprietary platforms; confusion & complexity.
But that isn't what this concept is about at all. It's about providing a service so personalised, so customised to the needs of the individual, that they wouldn't dream of leaving. A service that has proactively taken the time to learn your needs and preferences, and acts on those sympathetically and sensitively.
Imagine if you could switch banks by checking a box: what would your current bank need to look like in order that you never wanted to check that box? That's the kind of disruption on the table.
The article is a short read and gets into some interesting territory - radical transparency, for example - and provides some good ideas for posing the sort of big challenges that lead to breakthrough ideas. I haven't dived into each point above, and I'd welcome your thoughts on them.
Disruptive innovation is a real challenge for individuals and organisations - and offers large rewards. There is no recipe for success, but some techniques provide you with a much better platform for success.