When asked by participants to my public speeches about the tools that disruptive organizations use, my reply is that, tools don’t make an organization disruptive: its mindset and culture do!
This being said, to identify and challenge orthodoxies (Gary Hamel 1997) are a classic of disruptive thinking (see my article of 2017). Shell’s famous scenario planning (1970’s) is another way to prepare for disruptive futures rather than guess a single one.
In 2005, Professors Kim and Mauborgne published the best strategy book of our times, “The Blue Ocean Strategy”. I am always amazed to see that almost everybody heard about it but relatively few people worked with it and took advantage of its power.
Given their mastery in Business Simulations (90 of the World’s top MBAs use them), our partners of StratX have been asked to design a cloud-based simulation by the authors of the book. For them, two types of strategic thinking co-exist:
- Competitive strategies: also labelled “Red Ocean” by Kim and Mauborgne, they are the “fly the plane” part of the once famous EDS advertisement, “Fly the plane whilst building/redesigning it”. It is all the thinking behind competing against existing firms, in existing markets for existing clients. The Red Ocean thinking is needed to protect our current assets, cash cows and other pillars on which our organization laid its foundations. Its mindset is about efficiency, trade-offs, continuous improvement, progressing but not about fundamental disruptions.
- Disruptive thinking: is the famous “Blue Ocean”, and it is the Redesign while Flying concept! It is about radically new mindset, challenging self-limiting beliefs, unconscious orthodoxies and creating new needs, new markets, new ways, new customers in an environment still virgin of competitors.
Our friends of StratX, illustrate the fundamental differences between competitive strategies and disruptive thinking through five aspects:
- Industry assumptions: are industry conditions given or to be shaped? It is a classical “Business Orthodoxy” topic. How do we look at the business context we live in? Are we selling cars or are we active in the mobility industry? What killed Nokia was to drop its superior “Connecting People” aim and mindset and see itself as a manufacturer of smartphones. What a fatal mistake!
- Strategic focus: Obsessing on competition or focusing on fulfilling a new unconscious need of our customers? Apple exhausted its iPhone competitors by making them reactive to its manoeuvres (remember the iPhone prototype supposedly “lost” in a bar by one of its drunken engineers, that saw the whole mobile phone microcosm guessing what Apple had in mind with this phone…) As Jean-Claude Larréché’s “Discovery Matrix” explains in another great strategy book, the Momentum Effect, we are into the mysterious field of needs unknown from our organisation and from the market itself. The genius of Steve Jobs was to be aware of our own unconscious needs (who would have bet that there would be space for tablets, between mobile phones and laptops?) for example.
- Customers: Hanging onto existing customers or letting some go and cater for new families of customers? It is of course the scariest thought to have for business people, especially if we hang out exclusively to competing strategies. But the emergence and awareness of new, unsatisfied needs, will bring new customers. Ikea, Burger King, Easyjet, or Rolls Royce, the Restaurant de l’Hôtel de ville de Crissier or the Beau Rivage in Lausanne, are clear of what they offer and what they won’t offer.
- Assets & capabilities: Like for Industry assumptions, the point is about whether or not we allow ourselves to be constrained by our actual capacities or reinvent our Business Model.
- Product/Service offerings: Disruptive firms think in terms of solutions and refuse to be held “hostages” by being producers of products and services: The restaurant mentioned above (the World’s best depending on which ranking you choose) doesn’t see themselves as a restaurant: they offer a once in a lifetime experience. Malaika, Noella Coursaris’ educational NGO, isn’t a school for girls aged 3 to 18. It offers an educational journey for the parents, community and families of its pupils.
Reducing the disruptive mindset to a bundle of tools and technologies is vowed to fail. Changing mindset is what matters and what we need, should we wish to reinvent our businesses and the new Economy!