• May 29, 2015

If It Works, Break It

By Ron Brown, Chief Technologist, EMEA, Enterprise Services, and Distinguished Technologist, Hewlett Packard Enterprise

Trade Tradition for Disruption

Success often sows the seeds of its own destruction. Companies that do everything right can decline and collapse with alarming suddenness. We all know the stories—there’s no shortage of recent enterprise victims. The reason? Once an organization establishes a successful business model, that becomes institutionalized inside the firm as the only way of operating. The business is lulled into complacency by success. And it becomes very difficult to spot market forces moving against that model.

But the marketplace is constantly in flux. It’s challenging to recognize the subtle changes that generate massive shifts when your mindset is stuck in institution mode. For example, the quick rise of discount and online shopping wreaked havoc on unprepared retailers. What the businesses needed was a new mindset and a new business model—a transformation. (See “The Age of Enterprise Transformation” here.)

And, on your own, that can be enormously difficult to pull off. When you find profits declining, the typical reaction is to cut costs. You let accountants run the business, and they are loath to invest in a new model. Consider, though, that it’s much easier to plan for a new model than to be forced to create it. How do you start?

Add Disruption to Your Enterprise Culture

Establish a subculture that works in tandem with the predominant culture of the organization. The idea is that the offshoot will build up a completely new business model and culture. And when the larger organization peaks and begins to decline, the newer way of operating can be transferred to it. Some of the most successful enterprises are assembling Generation Y teams to give a different perspective on the marketplace, identify trends, detect early warning signs, and even advise C-level executives. And they’re pointing out things that get completely missed by senior management—for instance, the idea that success comes from behavior as much it is does from processes and technology.

Fear Not the Break

In the past, this strategy required huge investments in time and resources and left you with the possibility of significant stranded costs. Now, with the consumerization of IT, it’s easier to test a new business model by entering the market quickly without massive capital investment.

For example, if you take advantage of anything as a service, you can create a fairly large organization to test a new model with a minimal skeleton crew and just buy your services as you go. If that first model doesn’t fly, the regret costs are very low. So you can actually iterate and try quite a few models in quick succession until you hit on one that works.

Stoke a keen curiosity for disruption. Develop strategies such as internal ideation processes that encourage employees to think of new ways to disrupt the marketplace. It’s simply a matter of establishing and nurturing a highly responsive, agile organizational culture. (See “Creating a Culture of Innovation” here.)

Disruption can have a hugely positive effect if you play it right. Enterprises that constantly watch for openings, treat every change as a positive opportunity, and aren’t afraid to break tradition are the ones that flourish—no matter what the market does.