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Early synth pop duo Buggles were the first band to have their music played on MTV in 1981 with their song ‘Video Killed the Radio Star’. This became a defining moment in changing the way music was consumed and changed other music TV programming forever. The title of the song has never been truer in terms of its wider meaning for Darwinian change in business. Yet the notion of disruptive change is not exactly new. Canals in the 18th century, railways in the 19th, and fireplaces, have all played their parts in transforming our lives. Fritz Haber invented the Haber process for making ammonia for use as a fertiliser in 1908. Up to this point potassium nitrate (saltpetre) had been used. Almost overnight, ammonia replaced the need for saltpetre and allegedly trains full of saltpetre were left half-way en route to their destinations as the value of the chemical plummeted. More recently, Kodak, Blockbuster and Betamax all discovered the power of disruption to their peril. Satellite navigation devices were thought to be a standard addition to a car until Google Maps arrived and the market fell off a fiscal cliff edge.
The idea of large corporations might also be up for disruptive change. In a conversation with Professor Charles Handy, he put forward the idea that large corporations will cease to exist. However, Peter Cheese at the CIPD was not so bullish about this possibility:
Will we still have large organisations as some fundamentals prevail? Advantages of scale, the even greater need for collaboration, notions of strategic partnering. However, with the emergence of networked enterprises will come more organic, more accountable, more transparent organisations, which are porous in terms of who considers that they ‘belong’ to the enterprise and who receives a pay cheque and a permanent job there. The idea of hierarchy is a more questionable idea into the future. A quick look at the FTSE and Dow Jones shows that the half-life of organisations is in decline.
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Looking further into the future, the Netherlands has mooted the idea of banning new petrol and diesel cars from 2025. This will be a game changer for the automobile industry. Given the declining half-life of businesses in the Fourth Industrial Revolution one can ask unreasonable questions such as, “Will Facebook exist in ten years time?” and “Will Amazon be disrupted?” The lesson for BBEs is “Be a disruptor or be disrupted”. Disruptive change comes from the unknown and the unknowable in some cases. How then should we conduct strategic reconnaissance in unexpected places, spot weak signals of change before others do, continuously reinvent, collaborate with competitors and so on to create SCA?
The term disruptive thinking has had a mixed reception, possibly because the word disruption can imply breakage or loss for some people. Yet the term as originally coined by Professor Clayton Christiansen does not require careless behaviour, more a careful analysis and response to missed opportunities to change a sector or an entire industry. Yet we have seen the longevity of companies in free fall over the last century, often because something disrupted their world and/or they failed to notice the early warning signals of decline. In the last 15 years from 2000 some 52% of S&P 500 companies have disappeared, with the average lifespan of 61 years in 1955 versus 17 years in 2015. Darwinian change is nothing new in business or life. Leaders must then also ask themselves whether strategy itself is being disrupted. Should they throw away the underlying ideas of strategy and planning as sacred cows in business? A number of shifts are in play, which make the life of a leader more demanding than ever.
TABLE 9.1
