(Time to read this important Blog article is about 3 minutes)

Every industry, including yours, is being disrupted by technology, by innovative new competitors, by global economics and, sometimes, by fundamental changes in societal values.  Either you will be the disruptor in your market and your industry, or you will eventually be put out of business by those who are.

So exactly what is ‘disruption’?  According to the Webster dictionary, ‘disruption’ is the process of interrupting the normal progress or activity of something. In business terms, ‘disruption’ is anything that makes doing business the same old way unproductive, irrelevant and unprofitable.  Actually, ‘disruption’ is the currently fashionable word for ‘change’.  And when it comes to change, there are only three positions open and available…

  1. You can be the architect of change,
  2. You can embrace the change created by others…or,
  3. You can be the victim of change.

Whether you’re a retailer, manufacturer, importer or service provider, there are at least five disruptive forces affecting your industry. They’re defined and described below.  

  1. Disruptive technology.  We’ve always had disruptive technologies.  Believe it or not, back around 300 AD the stirrup was a disruptive technology. It gave warriors on horseback more stability in battle than their opponents. It was a significant ‘competitive advantage’ that allowed nomadic warriors like Genghis Khan and his followers to control vast areas of Asia and Europe. Likewise, the steam engine, electricity, refrigeration, the jet engine, digitization, the internet and smart phones have all been disruptive technologies.
    Technology allows you to create new products, services or delivery models, to operate more efficiently in every part of your business and to proactively and cost-effectively communicate with and listen to customers, prospects and key influencers.  And, for good or for bad, the technology of Social Media makes your customers and the general public powerful partners in managing your brand reputation and, hence, your bottom line.
    The technology of 3D printing is changing the way prototypes and finished products are produced.  In October, 2019 a 25 ft. boat, weighing 5,000 pounds, was ‘printed’ by a research team at the University of Maine using the world’s largest 3D printer and a blend of 50% plastic and 50% waste wood fibre. See video at  https://www.youtube.com/watch?v=Pt2epukih2k.  This printer has the capacity to print objects up to 100 feet long, 20 feet wide and 10 feet high. 
    In China, an innovative home builder creates beautiful homes by 3D printing individual modules in a factory using industrial and agricultural waste as a building material, and then assembling the modules on site to create a finished home in a day.  The cost to build and assemble these homes is just $480 per sq. meter or $43 per sq. ft. Compare this to a cost of $150 to $250 per sq. ft. to build a home in North America using traditional methods.
    There are now vending machines that cook, assemble and serve delicious hamburgers on demand.
    Are you using the latest and best technology and partnering with the best technology providers to develop compelling new products or services, to operate more effectively, to understand, delight and communicate with customers and prospects, to drive sales and improve margins?      
  1. Disruptive products. Disruptive technologies generally lead to the development of disruptive products. The internal combustion engine led to the automobile, which fundamentally  changed the speed and comfort with which we could get from A to B, where we could live and work and to where we could travel.  Motorized trucks led to the capability to quickly and cost-effectively transport agricultural and manufactured products over long distances, resulting in the closing of millions of small local businesses as entire industries consolidated.
    Digital cameras replaced film and bankrupted Kodak. Now smartphones have replaced digital cameras and photos are instantly stored or shared electronically, at no cost. It’s estimated that only one in every 100,000 photos taken today is printed.  That sucks if you’re in the photographic paper biz. 
    Invisalign, the painless, invisible and less expensive braces have disrupted the traditional painful and unsightly wire braces that were the bane of many teenagers’ lives..  And now ‘The Smile Club’ offers invisible, plastic braces, online, for even less money than Invisalign.  No need to go to an orthodontist.  It all changes so quickly.
    Foam mattresses, purchased online and shipped directly to consumers are disrupting traditional brick & mortar mattress retailers.  And, as so often happens, these mattress disrupters never made or sold traditional mattresses. They came ‘out of nowhere’ and now the traditional mattress folks are trying to catch up.
    Are your products or services so relevant, so extraordinary, so competitive, so right for your target customers that there’s no reason for them to go anywhere else?  And, if so, are you effectively communicating that powerful message?  Remember, there’s no point being the best if you’re also the best kept secret.        
  1. Disruptive new business models are changing most industries. Costco is a different business model and it’s a huge success.  You pay and annual fee just to get in the door.  They’re low-overhead warehouse stores with no frills and a huge range of quality products from rotisserie chickens to tires to caskets…all at low prices and a no-hassle return policy. 

    Amazon’s business model has been hugely disruptive to thousands of businesses while creating opportunities for thousands of other businesses who are partnering with them.  You can buy legal advice or find a life partner on the internet.Many years ago, IKEA wrote the book on disruptive business models. They design their own furniture and accessories, source them globally, use a flat-pack RTS (ready to assemble) product format on bulky items to reduce production, shipping and warehousing costs.  All items are exclusive to them and carry their brand.  This innovative business model has made them the world’s largest furniture retailer.   

    Whenever a disruptive new business model comes to any industry, the ‘old guard’ cries “Unfair competition”.  But, unless you’re competing with either to government or the mob, there’s actually no such thing as unfair competition.  It’s just that someone else came up with a new and better business model…and you didn’t.
    So, how might you change your business model by changing what you sell or how and where you sell it?  Or, are you so buried in the day-to-day running of your business that you never have time to think about such things? If your business model is fundamentally flawed, all the fine-tuning in the world won’t save you. 

  1. Disruptive geographic locations. If you’re a manufacturer, you’ve certainly lived through this one in the past 20 years. Much of the consumer goods manufacturing in North America and the entire ‘western world’ has been decimated by Asian competition.  Even if you shifted the production of your products to Asian factories, your biggest customers are now buying directly from those same factories and cutting you out of the supply chain.
    We’re seeing some manufacturing return to North America (back-shoring) but the big problem is where do we now find the skilled production people that it originally took generations to create?
    Some North American manufacturers have thrived by offering what Asian suppliers can’t. For example, to create a competitive advantage as a USA-based manufacturer, Rowe Furniture committed to delivering custom upholstered sofas and chairs in just two weeks, rather than the usual 8 to 10 weeks. The industry said it couldn’t be done.  But Rowe embraced lean manufacturing principles to make it happen.  Employees are now more productive, they make more money and Rowe retailers and their customers are delighted.
    If you’re a manufacturer, what is your ‘location’ strategy?  What are you doing to be relevant, competitive and profitable?      
  1. Disruptive societal changes. This is a fascinating area of disruption. Changes in society, our values and how we live can have a major impact on your business.  For example, cremation is now 65% of the ‘end of life disposition’ for North Americans.  The $5,000 casket is being replaced by a $300 urn.  And, with the general decline of religion, many folks are replacing a solemn funeral service in the funeral home chapel with a celebration of life at the deceased’s favourite pub or golf club. Because of this, there are 7,000 fewer funeral homes in the North America than 10 years ago.  Many funeral homes are staying in business by offering pet funerals because, apparently, we won’t buy a casket for mom or dad, but we will for fido or fluffy.  Go figure!
    In large urban areas, more and more people are living in small condos or apartments where traditional sizes and styles of furniture simply don’t work.  IKEA has picked up on and exploited this societal trend.  They show complete rooms furnished with furniture and accessories ingeniously designed for compact spaces. Many of the pieces include extra hidden storage or serve multiple functions.
    What societal changes are affecting your industry, or will in the foreseeable future?  What changes in vales, preferences, priorities or economic realities are changing your target customers?  How are changes in customer age or demographics affecting how you must change what you sell and how and where you sell it.  Are you ahead of the curve, behind the curve…or have you not yet even noticed that there is a ‘curve’?    

In conclusion:  So, there you have it.   Which of these five disruptions have come or are coming to your market?  Will you be the leader, a quick adopter…or a victim?   Sit down with the best minds and hearts in your business and revue these five kinds of disruption and determine how they’re impacting your business and what your proactive response will be.  Get specific about what needs rethinking, fixing or doing in your business. Determine what will be done, by whom, by when, at what cost and measured how.  Then, follow up. ‘Failure to execute’ is the big killer in many businesses. Don’t let that happen in yours.


For info about booking Donald to deliver his bottom-line insights on management, marketing and profitability at an Industry Conference or Corporate Event…or to discus our Business Coaching program, contact us at donald@donaldcooper.com or by phone at 1 (416) 252-3703 in Toronto, Canada.

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