Meeting the challenge disruptive change has never been any easier, especially for the management of big companies. The market needs has and continue to change tremendously and the management of businesses needs to find ways of adapting to the ‘climate’ change.
Managers are instead scared as they see disruptive changes coming on their way and even if they have the resources to deal with it like technological know-how, specialists, strong product portfolios and the money, they do not take time to realize the capabilities of the organization as they do with individual capabilities.
What is Disruptive Change?
Disruptive change is a non-localized future irreversible and change that affects a portion of an industry. This can be caused by changes in market trends causing a shift in the mode of production to fit the customer demands. A good example of disruptive change is in the introduction of mobile phones against the regular analogue phones. At first, the mobile phone had poor sound quality and was expensive.
As the time passed, the mobile phones became cheaper, had improved sound quality and as they were also portable, it eventually displaced the analogue phones. From this example and many other innovations, it is clear that disruptive changes suffer from an initial lower performance from the mainstream market. Despite this, it prospers in a given market niche due to the new performances that it brings and as the performance parameters are greatly improved, the traditional method is eventually displaced.
Recognizing Disruptive Change
Disruptive change does not affect a localized area but the entire value network. The areas that are constantly undergoing disruptive change include the telecommunication sector and computers as they move from analogue to digital era and the invention of products with new and efficient features. Others include the education sector, retailing, pharmaceutical industry and many more.
So how do you realize that you are about to face a disruptive change? The indicators can show early and allow time for managers of businesses to prepare in order to deal with the change, but sometimes, the disruption may not be seen until the last time when there is almost no time for a transition.
Indicators can be specific to a particular industry, but the general indicators that cut across the industries include.
• Change in government policies, legislation and regulations
• Availability of affordable products and convenient services
• Widespread customer dissatisfaction
• Change in accessibility of customers
• Vendors consolidation within a given industry
• Specialties becoming commodities
• Customers are being over-sold
• Public sentiments
If these indicators appear almost all at the same time, it shows that the disruptive change is already happening and if a few of them are already being witnessed, they should be considered as warnings of the things to come.
Responding to Disruptive Change
Disruption change usually affects many companies and the effects that they leave behind depend on the preparedness of the business in dealing with it and the way it is handled generally. Many businesses are swallowed and never to be seen again while others emerge successfully. There are also those that will do their business as usual and struggle through the change while others simply quit the industry because they are unable to deal with the change.
These consequences come as a result of the way people respond to a disruptive change. For instance, others will try and deny the disruption and do nothing about it while those that are smart will act and try to minimize the disruption and there will be those that will recognize the disruption but fail to appreciate its magnitude. Whatever the result, the fact is that the change is inevitable and only the strong ones survive it.
Factors Affecting Responsiveness to Disruptive Change
There are factors that affect the responsiveness of any company upon meeting the challenge of disruptive change. They include the available resources, the values and the processes involved.
The amount of resource that a company has will determine how and what that company can do. The resources here are in terms of technologies, equipment, human resource, money, customers, information, public relations, suppliers and even products designs and brands. With abundant resources, a company can easily deal with disruptive change, although it sometimes needs more than that.
The values of a company affect its decision making process for example, what to do and what not to do when faced with certain situations like disruptive change. It goes further to determine issues such as prioritization processes like customer priority, employees’ priorities, and the need for new products and so on.
The nature of processes that any business uses will determine how best it will be able to deal with disruptive change. Such processes include coordination, communication, interaction, and decision-making. These processes always determine the success of other critical areas like product development, budgeting and manufacturing processes. It also affects the documentation and ways of working on a routine basis.
The Process of Disruptive Change
Dealing with disruptive change is a process that needs to be done in the right way. It starts with identifying the nature of the challenge. After accepting the challenge, there should be passion and aspiration to deal with it. Knowing what the future holds comes from a good analysis of the market and the enterprise as a whole.
Another way of dealing with it is by exploring the possibilities. Consider past and present trends and make future possibilities that the company need to be prepared to face when that time comes. After identifying the possibilities, mobilize the commitment of all members of the organization and be prepared to implement the changes that are required.
With the ever-changing face of different industries, it is clear that disruptive change is inevitable. For the success of every business, the management should ensure that they are able to identify disruptive change indicators as early as possible and be prepared to deal with it in a way that it brings as less disruption as possible.
Lastly, changes in technology have fast created spaces that need to be filled with changes in the affected areas as well. Businesses have to be run smoothly, meaning they should be able to cope with the needs of their customers. Meeting the challenge of disruptive change needs the effort of all the members involved in order to tackle it collectively.
Chris is the Lead Author & Editor of Change Blog. Chris established the Change blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Change Management.