Learning to Identify Disruptors in Your Industry

Disruptors defined

An industry disruptor is recognized as an innovation which generates its own value network; therefore initiating a new market which ultimately upsets and possibly supplants an already established market and value network. Disruptive innovations tend not to be fashioned by industry-leading organizations, but frequently rather by independent entrepreneurs and external marketers.  This occurs because companies often choose to ignore many far-reaching innovations at first, since they usually do not indicate strong initial profitability, and their development can tap into resources necessary to sustain important innovations already in existence.

While not all innovations or industry advancements can be defined as disruptive, and the risk associated with those which do carry the potential for disruption is usually too high for many companies to take on, industry disruption is certainly not a matter to be taken lightly from any sector of enterprise. As an incumbent presence, disruption may be the mark that turns the penultimate tide on your long-term strategy or even viability.  Yet from a startup perspective, disruption may be that once-in-a-career opportunity to strongly break into your market.

Foresight is key

The fact is no industry is ‘safe’ from the potential upsurge of powerful disruptors. This is due to the fact that the very nature of disruptors is innovation itself. However, your enterprise may utilize the sudden arrival of a potentially threatening disruptor by being aware of the markers, and by being as flexible as necessary to find the most advantageous position for your company.

Yet again, the key is foresight:  To be willing, able, and keen enough to recognize the signs of a real disruptor when it hits the scene.

A few examples of disruptive innovations in any industry are:

• Exceptional scalability
• Market innovation (new niche companies and defining new markets)
• Solving problems in new ways
• Cutting costs in new ways
• Demographic evolution (new generations coming to prominence, with different paradigms and values)

From theory to concrete

Consumer insights are defining our era.  Now more than ever, the old air of superiority propagated by the 1920’s corporate and financial-sector philosophy of the ‘ignorant masses’ to be shaped and formed is long on its way out.

One of the most currently prominent and direct examples we can draw from is that set by the big players, the initial originators of mobile technology.  Microsoft made a series of fumbles and late-starts while Apple earned its reputation of listening and responding directly to its consumers.  While Microsoft stands strong in the tech market and has even worked on redesigns, Apple continues to hold the strongest grasp on the mobile technology market, and they achieved this largely by paying attention and remaining intuitive to the needs and wants of their clientele.

Other circumstantial models of general technological disrupters are Blockbuster giving way to Netflix, and Amazon replacing many of the traditional brick-and-mortar book stores.

Disruptors of the future

While paying attention to who will make the next major impact on your particular market, don’t become overly immersed reading into company names without any personal knowledge – people are what to look for, the innovators, not just the company with the strongest number in the last few consecutive quarters.

According to S&P Global, there are several markers to keep your eyes on for prospective and potential innovators for 2016.  Their team recommends that businesses look out for the following themes:

• Assertion of technology companies through capital allocations
• Possibility of high-capital energy companies cutting dividends
• The presidential election year covering topics of transportation networks and the cost of medications
• The manifestation of Blockchain, a vital technology platform within the financials’ sector
• The influence of Millenials on overall consumer spending

While all of these bullet points should be taken into serious account, it is essential that business owners and innovators alike are realistic regarding the presence and impact that Millenials have on a myriad of clientele markets.  This analytical demarcation holds weight primarily because the emphasis lies within the interests and predilections of an entire new generation, one of the largest on record; which some believe could be even more effectively explored, and even capitalized upon.

This also indicates that market researchers are in need of both long-term big data and the concrete psychological character profiling which has so clearly delineated past generations – and their corresponding markets – with such reliable forecasts toward brand and product.

For instance, the Millennial generation has a distinct and clear distrust toward the traditional banking and financial industries.  What then are we to make of the prospect that such monoliths as Wells Fargo and Chase may have something to fear from the times ahead? While the necessary changes may lie within something as simple as marketing tactics and technological tweaks, questions such as this are valid in their significance.

Yet, on a slightly smaller scale, the investment app, Stash, clearly geared toward the younger sector, has developed a way for users to invest smaller amounts of money (as little as $5) into major stocks, which is ideal for younger people who may not have built up the capital for large investments. The other difference is that not only do these stocks carry monetary significance in the investment world, but many of the companies are also marketed has having a positive social impact, so investors can “feel good” about investing their money for reasons beyond just the financial gains, which is appealing to Millenials, and, of course, can all be done through the convenience of a mobile device.

Essentially, innovation is synonymous with the future when it comes to industry disruptors, so being tuned in to what is happening in younger demographics is crucial.

A strategic finale

If you are successful in determining the potential disruptions within your own industry, the next step is to contemplate exactly how these innovations would affect your business.  One suggestion is to imagine that you are an on-the-rise entrepreneur or start-up who has the funds to make an impact.  How would you use your creation to lead the industry in a competitive manner? Weigh the distinctive strengths and weaknesses of your own position against those of established competitors.

Eventually, you will finish with a design plan or strategy based upon a clear and realistic view of your strong suits and susceptibilities.  Only then, can you move forward with an approach that will successfully launch your company into the forefront or simply sustain its upper hand within the industry.

By Fred Coon, CEO

Stewart, Cooper & Coon, has helped thousands of decision makers and senior executives move up in their careers and achieve significantly improved financial packages within short time frames. Contact Fred Coon – 866-883-4200, Ext. 200