Big bang disruption – larry downes, paul nunes
Disruptive innovation has taken on a new form that deviates from the traditional model by initially entering the market as a low-cost substitute for a high-end product before gradually improving in quality and moving up the customer chain.
Instead, the innovation quickly penetrates every customer segment while outperforming competitors in terms of both price and quality from the outset. This kind of “big bang” disruption can virtually overnight destroy entire product lines.
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Recognizing Big-Bang Disruption
Big-bang disruptors are rewriting the rules of industry after industry—but only until the next wave of disruption arrives.
Big-bang disruptions typically have a virtually integrated supply chain rather than a vertically integrated one: they are manufactured and deployed using cloud infrastructure.
Seeing it coming
Recognizing warning signs is critical to survival. However, because early market-based experiments almost always fail, the familiar signals sent by low-end customers abandoning ship may never arrive.
You need new tools to recognize radical change coming sooner than your competitors, which means interpreting the true meaning behind seemingly random experiments.
Pay attention to the truth tellers
Your truthtellers might be easy to spot, if not accept. They could be employees working on the front lines of competition and change, far below the ranks of senior management. They might not even be your employees.
Longtime customers, venture capitalists, industry analysts, and science fiction writers may all be truth-tellers.
How to identify truth-tellers
Truth tellers are frequently eccentric, and their clarity can be confused with arrogance and stubbornness. Consider Steve Jobs, as well as other technology luminaries such as Bill Gates, Alan Kay, and Mark Zuckerberg.
Slowing the disruption
Ensure that disruptors cannot profit from their inventions until you are ready to acquire them, or you can win with your own product.
Once a big-bang disruption has taken off, it’s impossible to stop it.
You can delay their profitability by lowering prices, securing long-term contracts with customers, or forming strategic alliances with advertisers and other companies critical to your competitors’ plans.
A fast escape and a quick pivot
Senior management must face the reality that even long-successful strategies can be abruptly upended, necessitating a radical re-creation of the business.
To compete with undisciplined competitors, you must be prepared for an immediate exit from current markets and be willing to sell once-valuable assets.
A new kind of diversification
Diversification has always been a risk-mitigation strategy in cyclical industries. A diverse set of businesses is essential as industry change becomes less cyclical and more volatile.
Fujifilm, for example, has survived the digital photography transition by diversifying into other products and services ranging from nanotechnology to the production of flat-panel TVs.
Your business is already getting disrupted right now
You can’t see big-bang disruption coming. You have no control over it. You can’t beat it.
The innovator’s disaster is a big-bang disruption. And it will continue to make executives in every industry break out into cold sweat for a long time.
The impact of big-bang disruptors is undoubtedly amplified for technology- and information-intensive businesses, but most industries are vulnerable.
The good news
Big-bang disruptions hold enormous potential for those who can quickly learn the new rules of unrestricted development, unrestrained growth, and undisciplined strategy.
Your current business may be replaced by something more dynamic, volatile, and profitable. And the transformation will occur abruptly rather than gradually. In other words, not a whimper, but a bang.
The 12 Rules Of Big Bang Disruption
Rule 1: Talk to Your Truth-Tellers
Rule 2: Determine Your Market Entry
Rule 3: Conduct Apparent Random Market Experiments
Rule 4: Survive Catastrophic success
Rule 5: Take advantage of winner-take-all markets.
Rule 6: Establish Bullet Time
Rule 7: Plan for Saturation
Rule 8: Sell Assets Before They Turn Into Liabilities
Rule 9: Don’t Quit While You’re Ahead.
Rule 10: Get Out of Your Own Black Hole
Rule 11: Become a component of someone else.
Rule 12: Transition to a New Singularity