Futures Rambling # 90

By Laurie Aznavoorian

We often begin projects by asking our client what they think we should put in their workplace. This makes little sense and is particularly counter intuitive when dealing with client’s who claim, as many do, that they want to create a workplace that’s sparkly, new and innovative or that they want to be ‘disruptive’. Why? Because the majority of companies looking for a workplace design hardly know what their problems are, let alone what tactics and resources there are to solve them.

I would have to agree that this sounds like the attitude of a snobby, narcissistic, know it all design wanker, but since we’re living in the golden age of narcissism (nothing reinforces that more than the likelihood of Donald Trump capturing the Republican nomination for President) it’s quite acceptable to toot your own horn. What’s the harm in acknowledging that if we really want to help clients be innovative or disruptive, that they’re the last people we should be listening to regarding what we should do?

There is no harm, other than getting fired. And since we all know where our bread is buttered we bite our tongue, remain politely mute and keep to old adage that the client is always right. It’s a well-intentioned approach that ensures your mortgage gets paid, but does little for the promotion of innovation and nothing to promote the all-important buzz word of the day ‘disruptive innovation’. Listening to clients is exactly what breeds the ‘sea of sameness’ that defines most workplaces.

I would have been loath to make such smarty pants statement before I read about Disruption Theory in the Harvard Business Review. Clayton M. Christensen introduced the idea in 1995 and now it’s a powerful approach to thinking about an organisation’s growth adopted by both small, entrepreneurial companies and large, well-established ones. Unfortunately, now HBR tells us we are using the term they coined too loosely, in fact they suggest those who have not read a serious book or article on the subject should just keep their trap shut.

Well la de da, talk about narcissism! Sadly I fall squarely into this category of fakers who they recommend stick to their knitting because I haven’t read a book and only just started reading articles on the topic but have been asking clients for many years to tell me what disruptive changes in their industry might impact their workplace. I believed I was quite clever, but after reading the articles I’ve concluded asking a client about disruptive innovations in their industry is tantamount to asking them what they think we should do.

Here’s why, the theory of disruption was initially a correlation between who did and who did not do well in business. Research indicated incumbents outperformed entrants in a status quo context, but not in a disruptive context. This outcome perplexed the brains at HBR, after much pondering they concluded incumbents didn’t do well when it came to disruption because they listen to their clients!! And clients focused on internal processes and on what’s called sustaining innovations rather than disruptive innovation.

To appreciate the difference: snivelling competitors working on the periphery are just pains in the behind, but those on a disruptive trajectory can really hurt. The way to tell the difference is in a disruptive context a smaller company with fewer resources challenges a larger more established one, the big boy is so busy defending turf that they pay little attention to what they wrongly perceive as a nonentity. Then when ‘the nobody’ gains a foothold they’re shocked.

Disruptive Innovators come in two styles: those that create a market where one never existed and those they call the Low-end footholds, companies who take advance of incumbents ignoring customers and propose a lower price slightly different offer and then evolve to compete directly. The next thing the incumbent knows they’ve been Ubered; the entrant has an equally comprehensive product and can demand similar prices.

The key in this definition is that in order to be disruptive the entrant must come from below. Following that logic Uber isn’t actually a disrupter because the organisation didn’t take advantage of a low end opportunity, nor did it create a market where none existed. Uber provides rides, often for less and with better service, but what they have done is not technically a disruptive innovation.

On the other hand, when Netflix emerged in 1997 Blockbuster paid no attention, customers rented new releases on impulse and were happy to drive to a store and wander the aisles for hours searching for a video. Netflix initially appealed to a small customer group who were happy with a limited selection and to wait for the DVD to come in the mail. Blockbuster didn’t care, because each company steered clear of the other filing a different need for a different customer.

Then the consarnit moment came. New technologies allowed Netflix to shift to streaming video over the internet and suddenly they began to offer a wider variety of films with an all you can watch, on demand, low price, high quality, convenient approach and they offered it to consumers who embraced the internet and liked it. As a result there are not many Blockbusters around these days

Back to HBR’s claim that we use the term ‘disruptive innovation’ too loosely, why should we tax our brain over a moniker– who cares? Not surprisingly, they do and suggest that in not knowing the nuances of disruption theory or applying its tenets correctly an organisation could pursue the wrong strategic choices and the researchers, writers and consultants who use the term to describe any situation where an industry is shaken could cause harm.

This all hasn’t convinced me to abandon asking companies what disruptions might be on the horizon, but has confirmed my initial tenet – that we need to ask the right questions of the right people at the right time and that might not be our clients.

 

Sources:

Anthony, Scott; “How Understanding Disruption Helps Strategists; Harvard Business Review” Harvard Business Review; January – February 1995

Christensen, Clayton M Raynor, Michael E, McDonald; “What is Disruptive Innovation?” Harvard Business Review; December 2015

Doster, Adam; “Upstart Distributor A24 Is Making Indie Films Exciting Again”; Fast Company; January 11, 2016

Lindzon, Jared; “These Will Be the Top 5 Business Challenges of 2016”; Fast Company; posted January 11, 2016

McCaffrey, Tony; Pearson, Jim; Find Innovation Where You Least Expect It; Harvard Business Review, December 2015