Don’t Panic! It Won’t Save You from Market Disrupters

Have you seen the article “Big-Bang Disruption” in the latest issue (March 2013) of Harvard Business Review? This article screams panic. It elicits potent emotional reactions by displaying powerful images of buildings being destroyed. Its message: the severe damage and destruction seen in these buildings can easily happen to your business if you don’t take bold action fast.

But, panic is a poor business strategy. And, the strategic advice in this article leaves much to be desired.

Yes, it is true that disruptive change can happen relatively fast, just as this article says. And, yes, as this article recommends, it is important to monitor such change, and work to see it coming. But, panic and bold moves are not the answer.

Bold moves may get you noticed, as the powerful imagery in this article demonstrates. But, the bold moves recommended in this article can leave a business in ruins, much like what we see in those images of buildings coming down. This article’s call for attempting fast escapes from the existing business, immediate evacuation of current markets, and radical recreation of the business are a recipe for disaster. And, courting disaster is hardly an appropriate response to the threat of potential disruption.

Successful disrupters did not attain their position of prominence by doing what this article recommends. Instead, they started from where they were and took steps to build from there, until they thrived as a disruptive force in the marketplace. In technological disruption, the process of taking those steps can go quickly, but the steps still happen, even if the disruption appears radical. Those steps are what ultimately led to the success of the disrupters, and are also what will lead to success for potential disruptees. Disrupters have a different starting point than disruptees. But in either case, success is evolutionary and comes from taking steps forward from that starting point, not from hastily throwing away everything you have, as the Harvard “Big-Bang Disruption” article advocates.

In fact, in that same issue of Harvard Business Review, there is an article about how Encyclopedia Britannica successfully dealt with on-line disruption, as Wikipedia gained popularity. As this article illustrates, Britannica successfully addressed disruption through a series of steps, not via bold panic driven moves. There might be mention of radical change, which is how the article describes Britannica’s decision to discontinue the door-to-door sales that the company had long been known for. But, the overall description of what Britannica went through indicates stepwise changes that built upon key strengths, such as its editorial quality and its positive reputation associated with kindergarten through grade twelve education.

Thus, Britannica did not quickly evacuate current markets, like the “Big-Bang Disruption” article recommends. Instead, Britannica took steps to adapt to changing conditions, such as discontinuing door-to-door sales, while keeping its basic strengths intact. And, well before its print business experienced extreme disruption, Britannica had been anticipating technological change and experimenting with non-print formats. Thus, Britannica’s successful response to disruptive threat contrasts markedly from the fast, bold moves advocated by the “Big-Bang Disruption” article.

Nonetheless, the “Big-Bang Disruption” article does offer valuable lessons about how powerful imagery creates emotional reactions. Thus, “Big-Bang Disruption” is the perfect article for this month’s issue of Harvard Business Review where the cover story is “Advertising Still Works”. Although the advertising article talks about data driven approaches, we should learn from the emotional impact of those powerful “Big-Bang Disruption” images of buildings coming down. That kind of emotion can be an effective component of advertising. But, we should not be lured by its panic driven call for major strategic missteps.

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