Fear of disruption can lead to panicked responses that do not prevent disruption and can easily cause harm. Thus, companies must be especially careful with thinking they must disrupt themselves before someone else does. Consequently, too much encouragement to self-disrupt can have a serious downside. Yet, companies are often encouraged to self-disrupt.
For example, self-disruption might be encouraged when a highly successful company is described as reinventing itself through regular self-disruption. But, when that company does an outstanding job of adapting to change and successfully adding new product lines, is it really self-disruption? Or, is it just making excellent strategic choices? These kinds of strategic choices help keep disruption at bay.
A good example is Intuit, the successful software company known for products like QuickBooks, which helps small businesses keep their books, and TurboTax, which does income taxes. Intuit was featured in the November 1, 2017 issue of Fortune magazine, where it appeared on the publication’s Future 50 list, which identifies companies that are best positioned for future growth.
Also in that issue of Fortune, was the article “How Intuit Reinvents Itself” by Goeff Colvin. As the article explains, Intuit was founded 34 years ago and has an impressive track record of success. According to the article, “All its peers from 1983 (Flexidraw, VisiCalc) are long gone. Yet, Intuit is not just surviving, it’s blowing the doors off. Revenue, at $5.2 billion, is up 24% from five years ago; profits are at an all-time high.” The article credits a good part of Intuit’s success to “disrupting itself continuously” and to the company’s ability to “change before it’s needed.”
This could encourage someone hoping for similar results to self-disrupt their business. But, the encouragement to self-disrupt can easily foster fear of disruption and lead to a panicked response. So, rather than focusing upon self-disruption, it’s worth a closer look at the specific steps Intuit took that the Fortune article describes. As the article points out, Intuit made great efforts to understand its market (coming home with customers to observe how they use the software), Intuit upgraded its products to the latest technology, and Intuit pursued new product opportunities that I would describe as tied to the company’s strengths in computerized accounting related products for small business. To me, based on my 25+ years researching business success and failure patterns, it appears that Intuit made excellent strategic choices, more so than self-disrupting.
Granted, Intuit did upgrade its software to newer platforms, such as to Windows and, more recently, to mobile devices. And, unlike Intuit, tech companies that fare more poorly often fail to make those platform shifts. Still, merely upgrading to the latest technology, such as mobile, does not necessarily bring a company to success.
Beyond technology upgrades, Intuit’s success appears heavily due to making good strategic choices about which new product areas to pursue. The company’s success came from deciding when to change and doing so in ways that fit its strengths. This should not be confused with being pressured to self-disrupt its existing business or rushing to change before change is needed. The timing of Intuit’s change was such that the company was not in situations where there is pressure to act. Paying attention to the market, deciding when to change, and making the right kinds of changes generally works well, just as it did for Intuit. But, fearing disruption, a company can easily go down the wrong path by focusing too heavily upon trying to disrupt itself.
So, instead of being encouraged to self-disrupt, it’s important to recognize that Intuit’s success appears to come from making excellent strategic choices. And, that’s what all companies should strive to do.
