Ever since Clayton M. Christensen published "The Innovator's Dilemma" management consultants have been urging their clients to come up with "disruptive" ways to redefine the market and access the untapped client base! I believe they are missing Christensen's point.

"Disrupt or be disrupted!" seems to be the headline at every vendor or technology event, typically supported with success stories like Apple iPhone, Uber or Netflix. These "disruptive" successes are usually accompanied by examples of the "disrupted" – think Nokia, Blockbuster and taxi companies. The sensationalist scaremongering that goes with this approaches tabloid levels.

I have a problem with these assertions. The success of these companies is undeniable, but they are not disruptive. If you look at these companies, what they introduced is evolutionary, not revolutionary.

Evolution in digital media

Mobile phones had been around for decades before Apple decided to "disrupt" the industry. Mobile phones at the time also had reasonably good user interfaces – touchscreens were common in high-end models as well as games, email and MS Office like functionality. The base software was evolving slowly but surely. There was no urgent need for Nokia, Samsung, Ericsson or others to spend big on R&D. You could purchase apps, but the install process was convoluted at best and complicated at worst.

A new entrant had to offer something better. Apple couldn't improve on the basic design of the mobile phone, it had to enter the market and work within the existing infrastructure. The only thing it could offer was a better user interface, but that would still not guarantee success because its competitors would certainly catch up quickly.

Apple also had to introduce the iPhone because the mobile phone was threatening the success of the iPod. Mobile phones were already able to play MP3s and they were getting better at it. People also preferred to have everything on the one device. So, Apple entered the mobile phone market and, being Apple, they made the user experience better by locking users into an Apple ecosystem. The ecosystem made it easier for everyone to develop, sell and purchase mobile apps, because the complete process was controlled by Apple. Innovative, not disruptive. The reason Nokia died is because they did not adapt.

People had been watching YouTube, pay-per-view cable TV and downloading movies via Torrent sites years before Netflix decided to add streaming to their services (they were a DVD-by-mail company before then). So, the technology existed. The problem was that, initially, the networks did not have the bandwidth to support on demand video streaming and running a cable channel was expensive. Once the internet service providers could provide the bandwidth capable of large scale streaming, Netflix innovated and used the internet infrastructure to deliver a service that was already clearly in demand. Blockbuster died because it did not adapt.

The app market was well and truly established by the time Uber decided to "disrupt" the taxi industry. The concept though was not new. Carpooling or ride sharing had been around for decades – even encouraged by governments through the introduction of express lanes for cars carrying multiple passengers. Airbnb had been around for a while and it made sense to think that people willing to share their houses would be willing to share their cars. Add the incentive of "easy money" and the scene was set. All that was needed was an app to connect those with the need to those with the goods. Simple!

If we take an honest look at it, the taxi industry decided that keeping up with the times wasn't necessary. They kept to their telephone booking systems and "on-demand" meant hailing from the curb. When the internet finally happened for the taxi industry, their websites left a lot to be desired. They were ugly and difficult to use. The industry never engaged third parties to bring in more business, so taxi companies never had to expose their internal systems. As for ratings and reviews? Unlike organisations such as hotels, where many chains operate and offer a wide range of products, taxi companies largely operate in a government-regulated environment. Their competitors have the same business model, meaning there's little competition and few opportunities or incentives for innovation. A clean cab and a uniformed driver were enough to secure a competitive advantage. 

Safe in their castles, customer service did not get much attention. Unless I was booking ahead for a specific time, every time I called a taxi I got the message "next available" with the operator hanging up before I could respond. When I could respond – asking when that might be – I would be told "it'll get there when it gets there".

We live in an age of information and instant gratification. Society demands information now! Uber allowed customers to make bookings easily and showed them when their ride was going to arrive, who the driver was and what make and model vehicle to look out for.

Uber also made it easy for the ride to find you. The customer no longer had to describe a random location in a large city that they may not be familiar with. The app solved that with GPS. I can use Uber in Europe and USA in just the same way I can in Australia. I can even use it in countries where I can't speak the language. Innovative. Could the taxi companies have done something similar? Of course. Did they? Of course not. They did not expect to be challenged in their industry. They did not adapt.

Adapting to a digital landscape

So, did any industry adapt? Did any industry escape disruption? Yes. My favourite example is the hotel industry. Let's look at Airbnb. Surely the introduction of "home sharing" had an impact, but it did not kill the hotel industry. Was it not disruptive enough? It had the same concept and approach as Uber. What went wrong? What's different? Nothing went wrong; it's just a completely different industry with a completely different operating model. Hotels had always used booking agents. So, when the internet happened, they allowed agents to connect to their systems and make bookings. Then came the aggregators – sites such as Expedia and Hotels.com – that required easier access to the systems. This wasn't a major change to the business operating model of the hotels, so it was provided.

When the mobile app became the dominant form of customer engagement, the necessary infrastructure was already in place. Add to this the fact that people want to relax on their holidays and not do domestic chores, the hotel industry was safe. It was impacted but not disrupted. The hotel chains have constantly adapted their systems to suit the market.

So, why is it so hard for some companies or industries to adapt to changing conditions when their very survival may be at stake? Well, the ability to adapt requires the drive and capacity to adopt. To be able to adopt, a company must be able to learn and change. You cannot change if you do not understand your current state.

Back to basics, a company needs to understand their operating model. They also need to architect their enterprise in a manner that is capable of interacting with external parties. The trigger of a process (room booking, for example) needs to be configurable. The outputs need to be built in such a way that they can easily be connected to external parties (booking agent, aggregator website or direct customer) if need be. Only then will they be able to adapt. Only then will they be able to survive. Business agility can only be provided by well-planned systems.

ANATAS has over 20 years experience in enabling our clients to adapt; whether their business operating model is business-to-business or business-to-consumer. We analyse the current state, design the solution and build the capability.

At ANATAS we invest heavily in quality R&D. Our Advantage methodology is the culmination of that research and our experiences. The purpose of Advantage is to "create the ability to understand and determine the continual needs of integration, alignment, change and responsiveness of the business to technology and the market place." 

Contact us to see how our experience can benefit you.