How to embrace disruptive innovation

 

Disruptive innovation is a term that’s often thrown around the boardroom, but isn’t always fully understood. Rife with misconceptions, we aim to set the record straight and clearly define what the term truly means by looking into its origin, the misconceptions surrounding it, and its effect on business. We’ll also show how businesses can embrace disruption and use it to their own competitive advantage.

No market is safe from disruption. PwC carried out a survey of 1,379 chief executives in September 2017 that found 60% of these executives said their sectors have already been changed or reshaped. Seventy-five per cent of those surveyed anticipated that they would see their market disrupted by the year 2022.

EY Global, a multidisciplinary professional services organisation, points out that change can be difficult for most companies and leaders who avoid it can land up being unprepared. In order for managers and leaders to bring their teams through this change, they need to start preparing now.10 EY Global recommends these five ways that business leaders can embrace innovation.

1. Think living organism rather than static organisation. Create a unique and diverse ecosystem in your business by seeing yourselves more as a host organism that welcomes internal and external sources of innovation, rather than a static organisation.
2. Focus on bringing people together. Develop your team’s capabilities by making an effort to create conversations with people from different departments and functions that would not ordinarily collaborate. Vanessa Colella, Head of Citi Ventures and Chief Innovation Officer at Citi calls these conversations ‘productive collisions.’ This allows the change in thinking to take root throughout the business and will help you flourish during times of disruption.
3. Think differently about talent and leadership. It’s no longer about being a subject matter expert on just one thing. Rather, being able to effectively collaborate and connect knowledge from others within the business, and beyond its borders, is what adds real value to the business.
4. Move from “no” to “how.” New opportunities often come with uncharted regulations and compliance needs for the business, plus internal risks and legalities. Where this might be seen as a hindrance to proceed, being disruption-ready instead means working closely with these regulators to first understand their needs, and then collaborate with their experience and knowledge to see how the business can successfully carry execute the opportunity.
5. Ongoing commitment to disruption. This is not a once-off investment in being disruption ready, but rather an ongoing company-wide focus on transformation, development, and innovation. This commitment needs to start at the top; the CFO, CEO and board need to align with a shared goal and desire for disruptive innovation in order to steer the investment, governance, and communication to shareholders. Remember to test your innovation vision with your current investor base. If you find that they do not support your innovation agenda, you may need to work to change your investor base. Thankfully, effectively communicating your disruption agenda is sure to attract other institutional investors who are like-minded in their disruptive readiness desires.