Thursday, January 08, 2015

Disruption – The Final Battle Between Old and New

Disruption – The Final Battle Between Old and New

In 2014 the word of the year was undoubtedly, ‘disruption’. From news articles to consultant pitches, we all threw it in there. We used the word to create a sense of alarm, a call to change or to explain a phenomenon we have not witnessed in our time. Everything was either disrupted, or about to be. For our sins, it crept into a few discussions and we cannot be sure that we used it in a way that reflected the reality.
It was mistakenly assumed disruption was a business phenomenon, small agile operators attacking larger and slower incumbents. However, what disruption represents is the last ideological battle between old and new.
Business schools, at very expensive rates, insist on teaching their students ideas and concepts from the 19th century that are not necessarily as effective as they are claimed. We face an economy where business leaders are tackling 21st century issues with 19th century thinking. Not only is it limiting growth, it leaves companies open to aggressive competition from new entrants that understand the current challenges and using current thinking to embrace and exploit the opportunities. No clearer example of the blindness of business thinking exists than the demise of Blockbuster and decline of HMV.
Current market conditions are marked by two powerful forces; greater customer awareness and weaker market control for producers. The changing tide requires new ways of thinking: working in complementary networks as opposed to hierarchies, rapid action versus lengthy planning and a greater use of dynamic customer feedback. Time and time again we are witnessing successes from non-business backgrounds, but also, successes from developing economies. This suggests that many that are unburdened with the old industrial mindset are better prepared to maximise the current opportunities.
It is time to accept the limitations of business-school education and the damage they have done to corporate decision-making. It seems counterintuitive to accept that we have proven solutions to challenges we have never faced before. We are seeing success go to those unafraid to embrace modernity, to trust instinct and intuition, while actively rejecting the archaic ideas of the previous century. The surest way to be the victim of disruption is to look for solutions in a textbook. Listed companies are gambling their futures on tackling modern challenges with old ideas. Failing to resolve this will result in many more established names falling away like Kodak, Woolworths, Blockbuster, HMV etc.

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