Disruption and Speed of Change

• Disruption develops in a non-linear way -- first almost invisibly for years
• Then it suddenly, after it has reached a tipping point, begins to be "noticed"
• Incumbents' initial reaction -- is "Why Worry"?
• But when it suddenly accelerates, sets a panic in the incumbents.

A disruption is therefore a process, not an event. It emerges and develops, sometimes for years, without any noticeable impact, at least from the point of view of the incumbents, who thus tend to dismiss it. As time passes without visible impact, the dismissal seems more and more justified when, after sometimes a long while, it goes into accelerated mode. And then it generates shock and surprise, but this shock and this surprise are entirely self-inflicted. They result from the inability from incumbents to appreciate the true non-linear nature of the disruption.

Courtesy: Philippe Silberzahneng

Why Organizational Change is Difficult...

Adapted from Phillipe Silberzahneng's write up.

"When an organization’s capabilities reside in its resources (initial stage of startup), change is easy: the founders decide to change, and the organization can pivot. It is the strength of startups to change very easily when the founders are aware of the need to change their model. But when, at a later stage, an organization’s abilities reside in its processes, and even more so when they reside in its values, change becomes extremely difficult."

Changing values is difficult -- for e.g. most of us don't exercise regularly or eat balanced diet despite knowing its benefits. It's a deep change in lifestyle that affect the present commitments. It's the same for companies affected by disruption.

Changing values of an organization is titanic because it entails undermining the legacy long before it allows the birth of new one.

A solution to this is create an Autonomous Entity that takes care of this disruption.

Adherence to Reality - The Management Challenge

The relationship to the world is the combination of two things: the attitude to the world and the experience of the world. The attitude to the world is the result of our mental models. It is the way we see the world, the reality, with our assumptions, our beliefs and our values. The experience of the world is about how we act in the world, how we change reality. It is based on our principles of action. Attitude to the world and experience to the world are naturally closely linked.

https://philippesilberzahneng.wordpress.com/2018/10/24/adherence-to-reality-the-new-challenge-of-management/

Nokia failed successful transition to software

Nokia dominated the world of electronic mobile but failed to make a successful transition to software. 

Sustaining and Disruptive Technologies

Courtesy: MIT

Sustaining technologies are technologies that improve product performance (technologies that help improve a product that has a well established market). Most companies are familiar with this. Companies have problems with Disruptive Technologies. 

Disruptive technologies are "innovations that result in worse product performance, at least in the near term." They are generally "cheaper, simpler, smaller, and, frequently, more convenient to use." Disruptive technologies occur less frequently, but when they do, they can cause the failure of highly successful companies who are only prepared for sustaining technologies.

As the above graph shows, disruptive technologies cause problems because they do not initially satisfy the demands of even the high end of the market.  Because of that, large companies choose to overlook disruptive technologies until they become more attractive profit-wise.  Disruptive technologies, however, eventually surpass sustaining technologies in satisfying market demand with lower costs.  When this happens, large companies who did not invest in the disruptive technology sooner are left behind.  This, according to Christensen, is the "Innovator's Dilemma."

Large companies have certain barriers to innovation which make it difficult to invest in disruptive technologies early on. Being industry veterans means that they have set ways in approaching new technologies.  Baggage from precedents (such as equipment, training, procedures) hinder a quick response to disruptive technologies.  Large companies also have an established customer base whom they must be accountable to.  These customers often ask for better versions of current products rather than completely new technologies.  Customers are a substantial barrier to innovation.  Finally, companies make decisions according to their place in the value network--or, to put it simply, companies make decisions according to where they are in the market.