Patterns of disruption
Anticipating disruptive strategies in a world of exponentials
Established industry incumbents perpetually face the risk of being disrupted by new entrants using new technologies, business models, or approaches to capture marketplace leadership. Are there ways for incumbents to recognize these threats in advance?
Disruptive threats of exponentials, unicorns and black swans
“How can I anticipate the unexpected threats that could devastate my business?” This is the question that keeps us up at night. We fill our days with managing the expected, the things we can control: having the right talent, developing the right capabilities, getting resources to the right place at the right time, maintaining margin, growing revenues, delighting customers. These expected challenges are challenging enough. But what about the unexpected, the disruptive?
Unexpected, disruptive types of threats tend to be based in a new approach, a disruptive strategy, that was not previously feasible or viable in a given market. Something changes in the larger environment - technology or customer preferences or supporting infrastructure/ecosystem - to make the new approach possible and profitable. The incum-bent, preoccupied with the status quo, doesn’t recognize that the ground beneath it is shifting. Hampered by the nature of the existing business, the incumbent struggles to respond effectively as the new entrant takes market share. The same aspects of the incumbent’s business that made it successful also make response difficult and tend to act as blind spots, preventing it from fully recognizing the threat when it is still on the horizon.
Nine patterns of disruption
In our latest research at Deloitte Center for the Edge, we have taken an incumbent’s point of view to understand what turns a new technology or new approach into something cataclysmic to the marketplace - and to incumbents’ businesses. In doing so, we have identified nine patterns of disruption, see Figure 1. These patterns are more than “one-off” occurrences, but they also are not universal forces; they are disruptions that will likely occur in more than one market but not in all markets. Each delivers new value through a new approach subject to a set of market conditions. Each brings its own challenges for the incumbent. These nine patterns can’t describe every possible challenge a business will encounter, but, individually and in tandem, they do help make sense of the changing environment and competitive dynamics that many companies are experiencing.
By framing threats as patterns of approaches, catalysts, and conditions, it becomes easier to filter the noise and put it in context. These nine patterns can act as a lens through which to view one’s business, the market, and the surrounding landscape. They can provide incumbents’ executives with a framework for important conversations about their businesses and the potential for disruptions in relevant markets.
In the “Patterns of disruption” case series, we describe each of the nine patterns in detail and illustrate them with representative cases.
Patterns of disruption
What leaders can do
So how can incumbents avert disaster? First, see it coming: Understand the shape new threats are likely to assume (patterns of disruption); understand what particular disruptive strategies your market is most vulnerable to; and understand what will act as catalysts for those threats. Armed with this understanding, you can start asking the right questions of your business and the world around you to not only anticipate changes but make the “unexpected” expected - to begin making the choices and taking the actions needed to control your destiny and see the opportunity on the flip side of the threat. Read more in our report Approaching disruption.
More information on disruption?
Do you want to know more on disruption? Please contact Wassili Bertoen at +31 (0)6 21 27 22 93