Four Ways to Counter Rapid Disruption

Steve Blank pens a really interesting reflection on how Mckinsey’s three horizons framework worked well in the twentieth century, as a good snapshot for business innovation, however, contemporary businesses such as Uber, AirBNB and Tesla- based on existing technologies, have severely reduced the amount of time needed to launch horizon 3 (36-72 month horizon).

The key takeaway is in the past deep tech R&D centers invented new breakthrough technologies which were then commercialized many years later, think Xerox PARC. Compare that to 2019 the majority of Unicorns that are set to IPO, have built applications and services on pre-existing technologies. Example Uber did not have to send satellites to space to build out GPS or iterate much on existing mapping applications. On top of that SPEED to scale increases due to access to Cloud computing and well documented Agile development techniques. Don’t get me wrong that’s still an incredible achievement but is a different ballgame if you have to invent the entire technology stack. Which leads me to the question why did Google not release a ride-hailing competitor off the back of Maps (anti-trust fears or just missed the cab?)

Blank outlines four ways for the incumbents to counter rapid disruption:

1. Incentivise External resources

Incentivize external resources to focus on your goal/mission. Example NASA partnering with SPACEXDARPRA issuing prizes – Apple & App star

2. Acquire External Innovators

Combine the existing strengths of a company/agency and its business/mission model by acquiring external innovators who can operate at the speed of the disruptors. For example, Google buying Android.

3. Rapidly Copy

Rapidly copy the new disruptive innovators and use the incumbent’s business/mission model to dominate. For example, Microsoft copying Netscape’s web browser and using its dominance of operating system distribution to win, or Google copying Overture’s pay per click model and using its existing dominance in search to sell ads.
4. Innovate better than the disrupters

Innovate better than the disrupters. (Extremely difficult for large companies/government agencies as it is as much a culture/process problem as a technology problem. Startups are born betting it all. Large organizations are executing and protecting the legacy. Successful examples, Apple and the iPhone, Amazon and Amazon Web Services (AWS). Gov’t agency and armed drones.

More from the article here.

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