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March 20, 2014
Seeking the small signs of disruption
By: Mark McDonald

Pundits like to work in colors. They use black and white to color their advice and the situation facing the audience. Gray is the color of everything else from the objections of the audience to the issues that do not fit a pundit’s argument or model. Disruption is a black and white issue for pundits.

Disruption may seem like a big bang, but is not like being hit by a bus. It does not come right after the blare of a horn, the squeal of brakes and the gasps of passer byes. Disruption is not the result of a cataclysmic or nuclear exchange. If it were, then no one would invest, as the world would be too unstable.

Driving through the rear view mirror

Disruption is easy to detect once it happens. Then the story of this or that company hits the business press and joins the list of fallen industry leaders. You know the list so I will not recount it here. The problem is that none of these companies knew it was being disrupted until it was too late. In some cases, these companies were the originator of the technologies that eventually led to their disruption – Kodak in digital cameras is an example. People who talk about disruptions of the past imply that it is possible to drive an organization forward through looking at the rear view mirror.

Diagnosing disruption is not as simple as setting a strategy. Disruption is a subtle force that many misrepresent as cataclysmic change. It is something that every executive team looks for in order to protect themselves against it. Their vigilance and investment in creating rather than being the customer of disruption is important. But too many executive teams see disruption in an incomplete light.

Disruption is quiet and quite persistent

Disruption comes quietly, like a thief in the night. It is the product of constant little losses that individually amount to nothing but collectively mean everything as they accumulate and in that accumulation disrupt a company or an industry.

This raises two questions.

  • How do I know when I am being disrupted?

  • How do I know where that disruption is happening?

Leaders require answers to both questions in formulating a viable and compelling solution to digital disruption. Here are a few questions for executive teams to discuss in answering these questions. These are in no particular order.

  • What is the average age of your customers?

  • What is the nature of your go to market channels and your suppliers?

  • How is your internal organization changing?

  • How hard are you working for each sale?

These questions seem simple, almost not worth asking in the face of the major strategic issues facing executive teams. However, the responses indicate disruption particularly when it takes time.

Disruption is less the result of clashing companies, technologies and competing products between the old and the new. No it is more constant than that. Disruption comes not from new technology so much as from the accumulated customer and market decisions that revolve around that technology.

Disruption happens when we choose an alternative over the incumbent. That happens either when a company decided to move ‘up’ market, ala Clayton Christensen’s theory, or customers find better alternatives. In either case, markets change forever and players find it impossible to go back to their former positions.

The next few blog posts take these questions in turn and provide a clear guide for thinking about your company and its future. Through that discussion we can increase the contrast around the early indicators of disruption rather than leaving a world that is only different shades of gray.

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