Find your Disruptive Advantage.

May 10th, 2015 by Andy Main | Strategy

“In the next 10 years, 40% of the Fortune 500 companies will be gone,” according to an estimate in a study from the John M. Olin School of Business at Washington University. How do you make sure your business will be among the survivors or one of the disruptors? The answer: You’ve got to find your Disruptive Advantage.

Way back in 1776, our friend Adam Smith (coincidentally from my hometown of Kirkcaldy, Scotland) wrote the Wealth of Nations. Some say it had a fair bit of impact—you know, founding the field of economics, inspiring capitalism, and creating an understanding of factors that influence international trade. In it, the world was introduced to the theory of Absolute Advantage, which spawned concepts of Comparative Advantage and Competitive Advantage that have shaped our global economy. Today, we’re wrestling with a new chip off that block. It’s called Disruptive Advantage—the new basis for competition in our global digital economy.

When a business gains Disruptive Advantage, it means they’ve fundamentally changed the status quo. They do it with brilliant new business models and far-reaching, insightful applications of new technology. And with exponential technologies on the rise—things like artificial intelligence, quantum computing, industrial biology—the explosion of possibilities is mind-blowing.

So how does a business begin to find their Disruptive Advantage? For the established enterprise today, it usually means bold thinking and a willingness to overhaul every aspect of the organization to become more nimble, quick, and ready to seize new opportunities. In working with some of our most innovative clients, we see at least six characteristics that they tend to have in common.

  1. They live on the edge. They build capabilities and innovative teams guided by design-thinking, tasked with driving disruptive ideas, and protected from corporate bureaucracy. These teams work on the edge of possibility, and when successful, they are able to build those ideas into the core business.
  2. They are all-in with digital. They understand digital is a philosophy as well as technology that can catalyze disruption. Their entire organization—from supply to delivery to customer engagement—is digitally aligned and coordinated to deliver exponential connection.
  3. They are strong ecosystem players. They are participants and contributors to their business ecosystems. They don’t expect to operate in a silo, and are constantly looking for ways to take advantage of a broader network of talent, alliances, and partnerships.
  4. They are exponential thinkers. They set bold ambitions, defeat incrementalism, and allow failure on the road to achieving goals.
  5. They are agile. They treat digital initiatives like R&D, and they develop and try ideas in short, iterative sprints with empowered teams. They expect some ideas to fail, while being prepared to run quickly with those that succeed.
  6. They are customer-centered. They take an outside-in view, making customer value and delight the top priority at every touch-point. They don’t get distracted by new digital “shiny objects,” and instead focus on revenue, key metrics that demonstrate value and engagement.

When businesses put all these things together right, they are set up to find and maintain their Disruptive Advantage. They’ll have the culture, ambitions, infrastructure, and processes in place to help their people find and develop new business models, enabled by the creative use of digital technology.

Companies are finding their Disruptive Advantage all around us. We’re working with a healthcare company to develop smart medical devices that can administer treatments and feed patient data into their mHealth system, helping patients to live healthier lives. This is the future of healthcare! For retail, we’re helping clients imagine how 3D printing could completely revolutionize their supply chain. And across all the industries we serve, we are using artificial intelligence techniques to finely tune marketing messages based on the emotions of their consumers.

In just a handful of examples, we begin to see the unlimited opportunity available in every industry. Yes, it can sound overwhelming. But it can’t be ignored—because if you don’t take the time to find your Disruptive Advantage, someone else will.

What do you see as the biggest opportunity for your business? Drop me a line to continue the conversation.

Andy Main is Principal at Deloitte Consulting LLP, and leads Deloitte Digital’s US practice. Email him at amain@deloitte.com or follow him on Twitter at @scotinco.

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