We could fill the next 5 years of Cuttlebutt content with information and discussion relating to disruption. Disruption is such a deep, complex topic that it cannot possibly have even its surface scratched in this format. However (you knew there was a “however” coming!) there are elements of it which, granular as they may be, are extremely important to think about.
The element I’d like to focus on here relates to ‘listening to customers’. On the surface, listening to customers seems like a good idea; instinctively, it’s really a no brainer. But one of Clayton Christensen’s core observations, when he coined the term ‘disruptive innovation’ in this context, is that established firms are often essentially blind to the potential of incoming threats from disruptors because of their focus on pursuits such as segmenting existing markets and focusing on maintaining close relationships with existing customers.
Focusing in these areas, as sensible as it may seem, leads to incremental changes being made to what currently exists, and typically fails to address the rapidly changing needs of ‘future’ customers (which may indeed include existing customers with evolved needs in the future).
Moreover, the increasing rate of change in essentially every marketplace means that the future is becoming the present more quickly than ever before, so organisations which limit themselves to a focus on traditional customer research methods leave themselves wide open to being disrupted.
Giving you a ‘few tips’ on dealing with, and protecting an organisation from disruption kind of feels like giving someone a ‘few tips’ on how to land an aeroplane when they’ve never been in a cockpit: a few tips won’t do it! However (there’s that word again!) to make a start to at least beginning to limit an organisations’ vulnerability to disruption:
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- Stop thinking about the marketplace in which you operate as being ‘defined’ by existing boundaries; marketplaces and industries are being re-defined every day – think broadly
- Be prepared to think about more modern segmentation modelling (such as Christensen’s jobs-to-be-done – see below) and get comfortable with the fact that traditional segmentation modelling is only becoming less relevant as time goes on as traditional lines between customer ‘groups’ are increasingly blurred
- Spend time understanding the needs and listening to customers who don’t buy from you or who no longer buy from you. Don’t engage in “why did you leave” conversations, rather, focus on understanding the deeper seeded needs (not “I got it cheaper somewhere else” ‘needs’) which are now being better met elsewhere, particularly by non-traditional competitors.
Whilst no-one would suggest that focusing on relationships with your existing customers is a bad idea, it is indeed important that you are acutely aware of the typical unintended consequences of doing so, which, thanks to Christensen, we can all now address before it’s too late!
If you would like to talk about exploratory research with customers or disruption in some more depth, it will be difficult to shut me up, but I really would love to hear from you! mark@orangesquid.com.au