It's rare that a week goes by without my having an intense and well-intentioned conversation about someone's fear of baby-faced disruptors crashing into their business. Most of these talks are initiated by mid-level and middle-aged managers at large firms whose businesses are usually comfortable incumbents, for the moment, in various large and complicated marketplaces. But they're running a little scared because they know that new levels of competition and new kinds of competitors are clearly on the horizon.
Their companies typically have yet to be roiled or wholly upended by new entrants wielding the latest cloud-based SAAS solutions to address long-standing and often glaringly obvious industry shortcomings and inefficiencies. It turns out that not every industry is as toxic and easy to topple as taxis. (See Not Every Industry Can Be Uberized.) But they have nonetheless been charged by their own managers and bosses with anticipating the problem and conducting recon on their looming competitors. The mission is to identify the most likely candidates, track their progress, and carefully watch their latest actions.
As a result, the incumbents spend great gobs of time and energy pouring over product portfolios and new releases of these maybe foes; they try to analyze every article and media mention as well as all available tea leaves; and they obsess over alleged lost opportunities even when these are often modest at best and largely immaterial, given their scale. But we've all read about the innovator's dilemma and know that the most devastating types of disruption start at the bottom of the food chain and slowly work their way upwards--often before the incumbents even take notice of their presence.
So it's always smart to be on the lookout. But I would argue that even the most conscientious scrutiny is much more effective when you're looking in the right places. And, as often as not, those places are as likely to be inside your business as they are outside its four walls. You might really need a proctoscope to look deeply inside rather than a periscope to look out over the top trying to see what you can see. Focusing your attention and efforts on emerging external threats that you basically have little or no control over ignores the much more obvious internal areas of your business where (assuming that you can overcome the inertial resistance to change) you can make changes that can quickly and cost-effectively anticipate new threats and blunt or entirely eliminate them. You can do it to your organization before someone does it to you.
Looking hard in the mirror offers a much clearer view than staring out the window and wondering when the sky will start falling. Keep in mind that this is exactly what the little people looking to eat your lunch are doing every day anyway. They are scrutinizing every aspect of your operations looking for weaknesses, gaps, shortcomings, etc. that they can address and exploit. But in this particular examination, you have a huge edge.
Unlike your prospective competitors and other outsiders, you have the advantage in the analysis of having all the facts and figures about your business at your fingertips. The guys on the outside have a fist full of FUD (fear, uncertainty, doubt) and not much else. But to make this approach really work, you have to act like an outsider yourself to get the right perspective. It's absolutely critical to avoid taking too many things for granted, which can quickly get you into trouble. Everything needs to be on the table and up for grabs or you won't get anywhere. The good news is that it's a lot easier than you would think to start with a blank slate and take stock of your business.
The first step is to put yourself in your customers' shoes and ask yourself: first, how you can materially improve the customer's experience across each of the following dimensions, and, second, which improvement will have the biggest impact without regard to the cost of implementation. Cost is ultimately important, but in the real world, things that make a great deal of sense tend to pay for themselves pretty quickly.
The basic dimensions are these:
1) Simplicity and absence of transactional friction
2) Speed
3) Convenience
4) Accessibility
5) Affordability
Keep in mind that these are the exact same attributes of your business that competitors are looking at as well and they're asking exactly the same questions as you. I'm sorry if this seems pretty simple and straightforward. But the reality is that it's just that easy and yet, very few of us take the time to step back and-- starting from scratch-- see clearly what we can do better.
There's very little magic to this process. As I tell all our big corporate partners and sponsors, apart from a willingness to do the work and to accept and implement the results of the investigation, there's absolutely no reason why any company -- large or small, new or old-- can't do precisely the same thing.
In addition to the "defensive" ammunition which this analysis will help you develop along with identifying the actions you will need to take, there's another upside to the discovery process. It's the prospect of a great deal of new revenue from changes, channels, customers and other low-hanging fruit and opportunities that were sitting there -- unappreciated, undervalued and unexploited--right before your eyes. (See Five Reasons Your Market is Bigger Than You Think.) It's a double-edged benefit: adding to the upside and protecting against the downside risks as well.
You'll note one other important feature of my list. There's really no reference to new products, services, etc. That's not an oversight. You don't have to invent anything new to pull this off --you just have to figure out how to do what you're doing a lot better.
And it always starts with taking a hard look at your business. As Michael Jackson once said: it's all about the man in the mirror.
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