Despite being a more reasonable proposition than instigating an industry upheaval, changing your strategy to thrive on disruptive innovation is still a major challenge.
Companies that have made the shift have often done so in three steps.
First, they consciously decide how to position their capabilities to stay continually relevant. They prove willing to forget the present when planning the future, focusing on roles and capabilities that appeal to a broader and more diverse array of potential partners. Often, this means abandoning the “competitive landscape” for the “partnering landscape”—in other words, thinking differently about competition within and beyond traditional industry boundaries.
Take a well-known print and copy chain recently acquired by a global logistics firm. The parent company worried that too many parts of the print and copy business were increasingly incompatible with accelerating workplace trends like cloud storage and digital collaboration. Rather than seeing this as a competitive threat, the company managed to stay relevant by partnering with cloud providers like Google Docs and Box to digitize its quick-print offerings. Today, the company sees its print and copy centers as assemblers of digital office solutions.
Second, companies that successfully thrive on disruption adapt their business models to exploit their capabilities within a broader network. The goal is to become indispensable, the enduring partner of choice. In some cases, this means divesting or spinning off parts of the business that are too industry-focused, and at the same time using new acquisitions to access the talent and capabilities they need to appeal to a broad array of partners.
Consider innovative chipmaker Intel. In the past, the company had viewed its fabrication plants as being intrinsically linked to its innovation pipeline. But today, Intel monetizes spare capacity in its plants by experimenting with a “foundry” model. Other chip designers (and thus potential competitors with Intel on the chip design front) can now contract to utilize Intel’s spare manufacturing capacity, thereby cementing Intel as a key player within a broader network both as an innovation partner of choice as well and as a producer partner of choice.
Third, these market activity players adopt digital solutions to foster real-time collaboration with partners, customers and even competitors. In doing so, they reexamine both their entrenched business processes and also their corporate culture in order to make external collaborations simple, effective and routine. And, most important, they adapt their operating model while staying focused on their long-term success.
The Dow Chemical Company, for instance, has over the past 10 years increasingly moved away from manufacturing low-margin commodity chemicals and toward being a higher-margin, “solutions-oriented” partner of choice. To execute that strategy, the company embraced collaboration as an essential part of its operating model. For example, Dow’s Film Applications Development Center in Freeport, Texas, offers customers and other partners in the value chain a cutting-edge testing lab where they can experiment with new packaging applications—without the expense of using their own production facilities.