There is no more powerful strategy for rapid business growth than market disruption. Every business strategy should include at least an element of disruption — if not be entirely disruptive. But if you want to disrupt externally, you must first be willing to disrupt internally.
Disruptive strategy always requires letting go to make room for growth. I do not know of a single successful disruptive innovation that did not demand abandoning something — a business line that no longer fit, a beloved brand, a profitable product, conventional wisdom, or some supposed “best practice” way of doing things. (In my view, “best practice” is often just a polite label for mediocrity.)
Whenever I work with CEOs and their teams to develop growth strategies, the first question I ask is “What profitable business are you going to cut to make room for the growth you want?”
During a strategy development session with the CEO of an insurance company and his executive team, I asked that question right off the bat. The CEO was seeking rapid, disruptive growth. After discussion, the team made a bold and courageous decision: to cut their profitable auto insurance business because it no longer aligned with the new strategic priorities. They chose to let go of the familiar to make space for the future.
Vilmorin-Mikado, the Japan subsidiary of the French agro-tech seed innovator Limagrain, made a similar move. The company abandoned its highly profitable agricultural materials trading and wholesaling business — more than half of total annual revenue — to focus on disruptive innovation in its seed business. Revenue dropped by over 50 percent. Yet profits increased 60 percent as a result. That is the power of self-disruption.
The Pushback You Should Expect
If you lead a business and commit to self-disruption, do not expect applause from everyone. Resistance will come — even in the most successful disruptive companies.
Some employees prefer to complain that what you want is “impossible” rather than accept that they need to acquire new capabilities to make it possible. In many cases, the products with the most breakthrough technology are the hardest to sell — because selling them requires superior expertise, strong business acumen, the ability to quickly grasp a customer’s business through questioning, and the skill to shift a customer’s perspective through provocative insight in real time.
Others will claim that your disruptive approach is not right for “Japanese business culture” or invoke some other cultural excuse. One executive at a major consumer product company in Japan once told me, quite seriously, that disruptive strategy is not culturally appropriate for “the Asian universe,” her term, not mine. I still have no idea what “the Asian Universe” means — especially in a region shaped by highly disruptive companies like Softbank in Japan, BYD in China, Paytm in India, Shopee in Southeast Asia, and Samsung in Korea.
Lead With Resolve
If you intend to disrupt your market, you must ignore excuses. Disrupt internally first and weather the storm. Listen politely. Support those who are willing to learn. Most people will eventually get on board — some quickly, others slowly. Let go of those who refuse to change regardless of what you say or do.
Eventually the storm will pass. New hires will wonder what all the fuss was about, if they learn of it at all. For them, your current way of working will simply be normal.
And always remember: disruption attracts top talent.
Ask yourself: which sounds more compelling?
- “We are planning to grow five percent next year.”
or
- “We are going to bury Mercedes-Benz!”
Which leader would you want to work for?
Disrupt Yourself First
Self-disruption is never easy. It requires courage, discipline, and unshakeable resolve. But it is essential if you intend to disrupt your market or industry. You can attempt to disrupt externally without disrupting internally — but you do so at your own peril.
Disrupt yourself first, and you give your business a fighting chance at extraordinary growth.
Let’s Continue the Conversation
How have you disrupted internally or externally?
What has worked — and what hasn’t?
Drop me a line. I’d like to hear your experiences.
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