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Posted at 12:53 PM ET, 03/20/2013

How to wield disruption’s double-edged sword


Peter Faris, CEO of Szabo Faris LLC Transportation Solutions, stands in front of one of his vehicles while holding a smart phone on Feb. 14, 2013 in Washington, DC. Faris, an independent driver who works with Uber. (PAUL J. RICHARDS - AFP/GETTY IMAGES)

This is a guest post to Ideas@Innovations. The views reflect the opinion of the author.

I live in Silicon Valley where wreaking havoc through digital disruption is the objective of nearly every business. This means the expression is tossed around like loose change. But what does it actually mean and how can businesses simultaneously employ and defend against it?

Let’s start by doing away with the popular refrain that disruption is a buzzword. It’s more than a buzzword. There is still merit to the term. Clay Christensen, author of “The Innovator’s Dilemma” and the person credited with coining the term “disruptive technologies”, defines disruptive innovation as a “product or service designed for a new set of customers.”

Black car rental service Uber, for example, is disrupting the taxi industry. Short-term house and room rental service AirBnB is disrupting the hospitality industry. In fact, the entire collaborative consumption movement is developing a sharing economy that is disrupting almost every market — so much so that it seems every new startup is the Uber or AirBnB of their space.

Whether these companies are competing with other startups or established industry giants, disruption and being disrupted are an integral part of doing business. That said, every business is open to disruption but not every company is mobilized to disrupt. This means that organizations must protect their position and preserve current value networks while also investing in a culture of innovation to evaluate and pursue new opportunities. The trick however is doing so without bringing about self-disruption.


Tata Group Chairman Ratan Tata looks on during the 83rd Geneva Motor Show on March 5, 2013 in Geneva, Switzerland. (Harold Cunningham - GETTY IMAGES)
Organizations, in order to simultaneously defend and compete, must emancipate one of their greatest assets: people. This requires two relatively obvious things: vision and purpose. People need something or someone to rally behind. From there, training, direction, and mentorship can groom an employee to become part of the solution rather than part of the problem. But there are employees who are not ready to make the leap beyond complacency. Online fashion marketplace Zappos, for example, has long been celebrated for its focus on delivering happiness through employee and customer experiences. Company CEO Tony Hsieh said in a Nov. 2012 interview with Inc. magazine, that being stellar is not enough; candidates have to fit the company’s culture. If they don’t, said Hsieh, he’ll fire them.

That said, in order to achieve a culture of innovation, employees must also be empowered to take responsibility for introducing new ideas. Equally, they must believe that their contributions are appreciated and rewarded accordingly. The most resilient organizations invest in a system that celebrates imagination and also evaluates it formally in employee and managerial performance. At Mumbai-based Tata Group, innovation is one of nine categories on which employees are evaluated. Employees are encouraged to earmark five hours of their 45-hour workweek for projects of their choosing, whether it’s for education or idea development.

Innovative thinking is also encouraged through what Tata refers to as “Creative Dissatisfaction” — where employees are trained to challenge the status quo and constantly think about ways to improve the company. Tata instills this philosophy the minute an employee walks in the door for orientation, during creative workshops such as the “Technovator” and in annual leadership institutes for managers. To stimulate collaboration and creativity company-wide, Tata launched “Just Ask”, a Quora-like network for employees to ask and answer questions. Tata also introduced “IdeaMax,” a social network that allows any employee to submit, comment, and vote on ideas. In one year alone, “IdeaMax” collected 12,000 ideas, several hundred of which have become projects.


Brian Chesky, co-founder and chief executive officer of Airbnd Inc., speaks during an interview at the South By Southwest Conference in Austin, Texas, U.S., on Sunday, March 10, 2013. (David Paul Morris - BLOOMBERG)

Tata and Zappos aren’t alone when it comes to adopting cultures of innovation, of course. They are being embraced in a growing class of startups and also enterprise companies that seek to leverage the benefits of the startup ethos. Nevertheless, it takes more than acting like a startup to disrupt or to fend off disruption.

Without top-down direction and support it’s easy for employees to lie low or cower in complacency. I’ve witnessed far too many company cultures where speaking up was a surefire way to draw negative attention. It’s a bit like a game of corporate “whack-a-mole.” No one wants to speak up for fear of being whacked and, as a result, a risk-averse culture becomes the norm. A culture of innovation starts with building a safe haven for employees to share new ideas. Without the infrastructure to support and reward those ideas, being disrupted is inevitable. As companies invest in cultures of innovation and celebrate creative dissatisfaction though, disruption becomes more than a driver of innovative cultures - disruption becomes an outcome.

The source of thinking that went into establishing existing processes is the antagonist to the inventive philosophy required to support invention. As Albert Einstein once said, “…a new type of thinking is essential if mankind is to survive and move toward higher levels.”

Brian Solis is a principal analyst at Altimeter Group, a research based advisory firm that focuses on disruptive technology. He is the author of the newly-released What’s the Future of Business: Changing The Way Businesses Create Experiences.

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By Brian Solis  |  12:53 PM ET, 03/20/2013

 
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