Disrupt yourself – before someone else does it you

Feb 28, 2011 Business Daily, Strategy, Technology

“What’s the best way to make the competition irrelevant? It’s a question that has obsessed generation after generation of strategists, pundits, and gurus. Is it new business models, new market space, harder hardball, or better knowledge? The answer is: none of the above. It’s Brian Fitzpatrick’s concise summary of Google’s great insight: “Disrupt yourself before someone else comes along and does it”

UMAIR HAQUE, The New Capitalist Manifesto (2011)

As promised a few weeks ago, I’m back to Umair Haque’s wonderful new polemic, The New Capitalist Manifesto.

So there you are, sitting pretty in dominance of your industry, with a tried-and-tested business model, a loyal customer base, a great history. Haque will tell you: start panicking now! That is precisely the position Nokia, Microsoft, Toyota, Barnes & Noble and so many others were in very recently before they were severely disrupted by competitors, customers, and rapid-fire technology. They are all in some disarray now, whacked from all sides, seeking safe ground again.

The secret is what he calls the ‘resilience principle’: disrupt yourself instead of protecting yourself. His example is Google, the world’s most ‘Darwinian’ organization. It evolves and changes shape quicker and more boldly than anyone else – precisely because it knows disruption is the name of today’s game.

What is happening here is that many companies are learning to go beyond mere competitive strategies to philiosophies: understanding their own first principles of value creation. Crucially, philosophical companies do not just advance at the expense of their competitors – by blocking or deterring them – but by focusing on making the value that they create ‘thick’ – long-lasting and available to a vast number of players in the business ecosystem. The biggest protection is the protection given to you by your entire ecosystem – not just by your own efforts.

So how do you deal with pesky rivals? In Kenya, we have traditionally had one kind of answer: Smash them! We will go to our distributors and lock them in, bribe them to stock only our own products and penalize them for stocking others. We will lobby government and politicians to block our rivals on any grounds possible. We will offer short-lived bribes to our customers – special promotions and price cuts. We will spread rumours and disinformation about our competitors. We might even resort to all sorts of dirty tricks. We’ve done it all over the years.

But what if we had a philosophy, a faith system, that precluded negative competition? That would force us to focus not on our rivals, but on ourselves and the rest of the ecosystem. Rather than throw trivial freebies at our customers, we would focus on developing real, lasting, unique value for them – we would make them want to buy our products because there is nothing better. We would treat our suppliers and distributors with such honour and respect and cut them such great deals that they would not want to shift loyalties. We would be regarded with such respect by the media and society at large that they would rally to our defence. We would be such an important and upright player in the economy that governments and regulators would not want any harm coming to us.

Getting the point? If you are a what Haque calls a thick-value, philosophical company, you compete by doing what you do to the highest possible excellence. You do not have any time for benchmarking, mimicry, tit-for-tat. You are confident and secure in your place in the ecosystem.

Crucially, you do not wait to be disrupted by others, you do it to yourself. You challenge your assumptions on a continuous basis, and engage in non-stop experimentation so that you define the future yourself. Google says it best: “Everyone says someone will come along and replace Google. We think it should be Google.” I can only stand up and clap.