Thriving in a disruptor-driven market
Over the last six months we have seen some interesting trends in companies’ behaviours. It has been well documented that many industries are ripe for disruption. Almost anything and everything that provides a new channel that can be rapidly scaled has shot up in value. From anything as innocuous as razor blades (Dollar Shave Club) to taxis (Uber) to fast food (Deliveroo). Whilst there have been winners in this space, there have also been many losers. The challenge is to try and pick what will work and what will not.
That said, all of these disruptors have an effect on some of the more established players within their markets putting additional pressures on their businesses. These companies need to decide how they will take on these disruptors and meet them face to face. This is not always an easy thing to do as established infrastructure and resources are not easy to either reduce or indeed re-allocate. Look at retail stores as an example.
Increasingly we are seeing a trend for some of the more established “traditional” businesses looking to the start-up scene to poach people to set up their own “disruptive” start-ups. Dependent on how they are funded, start-ups don’t have to follow traditional business rules and are not expected to return a quick profit. This is perhaps the largest challenge for established organisations; how to innovate and develop in an environment where there is an expectation that there will be a return on investment while being disrupted by an organisation which doesn’t have to do that. Dollar Shave Club was acquired by Unilever for a reputed $1bn having never really made much (if any) profit.
We have been tasked a lot recently with taking people out of these environments with a view to slotting them into large established players. Assuming they can cope with the inevitable increased politics and size and scale of the organisation, we believe that a lot of these companies will be able to fight back. With the combination of the right infrastructure and support, and the right individuals we hope that large-scale organisations can show the initiative to be able to change quickly and provide suitable competition for the start-ups.
From our side, there has been a shift in perception from people from some of these organisations. There has been a bubble over the last few years that has shown some signs of starting to slowly deflate. While there will be fantastic winners in some of these industries there will inevitably be many more losers. Some senior people in some of the start-ups have realised the fragility of the business models; whilst on the flip side, there has been increasing acceptance from the more established companies that they need to bring in more entrepreneurial skills and flexibility from their staff. The combination of the two things should be a winning combination.
If you are looking for assistance or a discussion on how we have helped companies deal with disruption, then please contact Simon Nolan.
T: +44 (0) 1932 264 056