Author: Martin Kelly, CEO, INNOVO
In 2013, the consulting industry itself was declared to be on the “cusp of disruption, according to Clayton M. Christensen, Wang and van Bever. They pointed out that “Management consulting’s fundamental business model has not changed in more than 100 years” and that “disruption is inevitable.”
Ironically, consultants have been advising their clients on how to deal with disruption:
- “Peer into the minds of top global CEOs and their nightmares are filled with ‘Ubers for X’, as new technology upends their business models.” KPMG
- “Digital disruption is at the heart of all the conversations I have with CEOs today. And this is not surprising, as it presents the most significant threats and opportunities any of us have faced in business….. Business leaders tell me that they are intent on disrupting before they are disrupted.” Pierre Nanteme, CEO of Accenture
- Larry Downes and Paul Nunes highlighted: “The good news is that big-bang disruptions hold immense potential for those who can quickly learn”
Platforms like AirBnB, Facebook, Google and Uber have disrupted B2C industries with incredible speed. Now, a revolutionary new B2B platform, INNOVO, is ready to disrupt the consultancy industry. At this point, I should declare an interest as INNOVO’s CEO. However, the platform is free to use and raises money for charity so any time you invest in learning a little more is in a good cause!
How do players in an industry react when fundamental disruption appears? The photographic film industry illustrates how the speed of response to the disruption is critical in first surviving and then thriving in a transformed industry. Kodak was slow to embrace digital photography and filed for bankruptcy in 2012. It has subsequently pursued what in its heyday would have been considered niche markets.
In the consultancy industry, Christensen and colleagues observed: “The temptation for market leaders to view the advent of new competitors with a mixture of disdain, denial, and rationalization is nearly irresistible…..there may be nothing as vulnerable as entrenched success.”1 A market leader’s DNA has been successfully refined over decades. Its own strategy right through to its operational execution have been aligned towards optimum performance in the industry before it was disrupted.
How then, should a market leader simultaneously maintain its hitherto market leading success without being blindsided by a complete disruption of its own industry? Its absolute focus on its own tried and tested business model is its greatest strength but it can also become its fatal Achilles heel when the world changes.
A two step approach can be used to address this dilemma:
- Give a member of its leadership responsibility for searching for disruptions and rapidly evaluating them.
- Having identified an industry disruption, it can then be harder to learn how to exploit it ahead of competitors. This is particularly difficult for market leaders because it often involves questioning every element of the leader’s business and then ‘unlearning’ those elements which are inappropriate to a changed world. One effective way of doing this is to extend the remit of the evaluation team to become a division which exploits the disruption for the benefit of the market leader. The leader of this division is personally motivated to make the disruption work inside the market leader.
In a rapidly changing world, disruption embraced can be a source of great opportunity, disruption ignored can be fatal.
I look forward to you joining us on INNOVO.
 Consulting on the Cusp of Disruption, Clayton M. Christensen, Dina Wang and Derek van Bever, Harvard Business Review