All businesses and workplaces experience change, but some changes are more impactful than others. These are known as disruptive changes. These usually happen because of changes in consumer expectations, or, these changes can actually bring about adjustments in consumer expectations, and can have a profound influence on how various businesses evolve. Understanding the principles of and factors affected by disruptive changes can help company leaders proactively adapt to these alterations.
What is disruptive change?
Disruptive change occurs when the fundamental concepts and processes of an industry or business start to shift. While small incremental changes allow businesses and their employees to slowly adapt over time, disruptive change often requires high-level strategic responses from company leadership to ensure their company can survive long-term. When disruptive change happens, current products and work systems can lose value because of the new cultural expectations or technical developments. Disruptive change influences the way that businesses interact with customers and their employees.
A good example of disruptive change is the ongoing economic crisis in Sri Lanka. The soaring cost of living has changed consumer behavior because people are seeing their purchasing power drop, inflation rise, and feel a sense of threat to their financial security, which directly impacts how they choose to spend and what they choose to invest in. Products and services that they brought up until a year ago, may now be taken off the shopping list entirely, because they have now become ‘luxury items’.
So then, how can you, as a SME survive disruptive change?
Stay grounded
You can only successfully navigate multiple disruptive changes if you are yourself a grounded person. Of course, being grounded will mean different things to different entrepreneurs and businesses. However, in general, feedback is a powerful way to stay grounded. You should regularly solicit feedback from those you lead, customers, and friends willing to be honest with you. Too often, failure to spot disruption can be rooted in failures of self-awareness too. Staying ground in who you truly are, and who you are not, helps keep your eyes trained to notice realities you might otherwise prefer to ignore. In fact, the better you are grounded, the more authenticity your business will have, the stronger it will emerge.
Creating capabilities to cope with change
Processes are not nearly as flexible or adaptable as resources are, and values are even less flexible. So whether you are addressing, sustaining, or innovating through disruptive changes, your business will need new capabilities. In other words, managers must create a new organizational space where those capabilities can be developed. There are three possible ways to do that. Managers can;
- create new organizational structures within corporate boundaries in which new processes can be developed.
- spin out an independent organization from the existing organization and develop within it the new processes and values required to solve the new problem.
- acquire a different organization whose processes and values closely match the requirements of the new task.
These will help you navigate the changes more adeptly and also stabilize the business in times of uncertainty.
Study your competitors
Pay attention to how your competitors operate, what new products they offer and what operational processes they use to connect with customers. Identify when new competitors enter the market or how existing competitors expand into new segments. Maintaining awareness of industry norms is essential for recognizing which strategies are most useful and responsive to change.
And last but not the least, remember that disruption is not always a bad thing. In fact, if you play your cards well, you will start to see that disruptive changes can bring out the best in your business in terms of resourcefulness, strategic thinking and innovative prowess. So keep going and don’t give up!