For many enterprises (even startups) the changing nature of a market often requires new business processes. Executive teams are loath to think of this in terms of business process transformation because that idea has been associated with job-cutting and social dislocation caused by offshore/outsourcing. However, successful companies do increasingly have a focus on persistent process innovation. Netflix is the most aggressive in this regard, with its technology teams organized around their contribution to different delivery platforms. Giants like Ericsson and GE have also started down this road. And smaller companies see an opportunity in jumping into a market and reshaping the supply chain around their own platforms or service stacks.
As an input to this analysis, Gigaom Research surveyed slightly over 100 readers of the Gigaom news site on the topic of industry disruption. Over eight percent agreed that the “the economy as a whole was in a disruptive state with multiple strands of change.” We asked them what they thought were the main barriers preventing companies from responding to or taking advantage of disruption. Respondent rated a collection of financial principles, slow decision-making, and leadership’s distance from disruptive forces as equally important inhibitors.
Developing a New Planning Process
Alexander Osterwalder and colleagues introduced the idea of a business model canvas to support startups and established enterprises in designing business models. The business model canvas is a tool for describing the whole picture of a business opportunity and how to monetize it. We’ve adapted the canvas concept for its value in presenting a simple picture of a strategy on one screen. But we’ll focus our canvas on how companies can identify and exploit – or defend against – industry and economic disruptions.
The Decision Model Canvas for disruption consists of steps that take a company from the recognition of disruptive forces through to new decision making tools to redesign and switch company strategy.
To be this systematic in developing a strategy to change a market (the real definition of disruption) requires quite different competencies from business as normal – a case in point, Ericsson is attempting to establish itself as a thought leader in the emergence of a wholly networked society. Thought leadership is a critical component of the new economics of information or what is called the Information Layer in the Decision Model Canvas. Competencies like analyzing disruption or making better use of crowds become significant for framing an opportunity; being able to tell a compelling narrative of change keeps investors and customers onside.
The importance of having a decision model canvas is to contain all the complexity of the different analyses and storylines that will develop as a company uses disruption to its own ends. It is important to do this in a structured way.
Detailed Decision Model Canvas for Disruption Planning
Source: Gigaom Research, Haydn Shaughnessy
The idea of a canvas is to plot out the steps needed to develop a disruption strategy. Many of these steps will be iterative and will re-appear in different parts of the canvas. Companies that develop a participative strategy for disruption (involving customers or partners in close consultation) will initiate that during disruption analysis, and develop it for information layer and ecosystem development. They might also want to account for how capable they are in participation strategies while they do their capabilities assessment. Many companies manage partnerships badly, for example, and some have little experience of developing communities.
So the basic idea is the canvas is painted out iteratively and not in sequence. The descriptions below may look like a sequence, but it’s best to keep an eye out for the intersection points between steps.