5 Universal Core Competencies
Entire industries are being buffeted by disruption, sometimes with catastrophic outcomes. Formerly prominent brands like Blockbuster, Toys R Us and Borders have vanished from the marketplace while others like Kodak and Yellow Cab are on the decline, all failing to acclimate to the changes shaping their consumers’ desires. Massive scale is an ever-shrinking shield against the threat presented by nascent technologies, strategies or business models in the hands of an informed, nimble entrant.
However, disruption can often be opportunity disguised as a threat. In these cases, disruption is only a threat to those companies lacking the universal core competencies needed to mine the opportunity. In fact, there are dazzling examples of companies that have leveraged disruption to increase their market presence and profitability.
Honing five core competencies will help protect your brand from inevitable disruption. These competencies are universal, regardless of your specific industry. None of these competencies are optional; they are all imperative for success, if not survival.
1. Be adaptive.
It isn’t enough to be responsive in today’s marketplace. Companies must leverage their offensive power, seeking the opportunities hidden in disruption’s power. By opportunistically capitalizing on change, even change created by competitors, successful brands can hope to maintain leadership.
Mobile payment service Venmo launched in 2008, leaving major banks wanting a piece of the consumer-to-consumer payment network pie. Banking giants JP Morgan Chase, Bank of America and Wells Fargo joined forces to launch Zelle in 2017 as a direct competitor to Venmo. Zelle integrates directly with financial institutions, eliminating the middleman role that Venmo serves and alleviating some consumer concerns about third-party security.
2. Be a challenger.
In the 1990s, I had the privilege of pitching then photography giant Kodak. Digital photography technology was causing seismic disruption in the film business. They had digital technology, but had not figured out how to convert their legacy film-processing technology into mass-market digital camera sales.
When Kodak came to us, we pointed out the obvious: They needed to “change horses without dismounting” — using their brand equity and consumer know-how to own the digital photography market. The strategy line we gave them was, “Be the destination for the digital migration.”
But you know the history. They were so focused on protecting their legacy film business that they let themselves crumble. They had adopted a mindset of contentment and containment — one they maintained to the bankrupcy grave.
Leaders have the courage to challenge. They challenge competition, category conventions, and even their own company/brand. Many companies have formed “red teams” to serve as intentional disruptors. These groups improve organizational effectiveness by taking on an adversarial role and challenging weaknesses. Red teams have applications in the military, the intelligence community, cybersecurity, and more, including private industry.
3. Be a learning organization.
In my years of working with leading brands, I have continually seen value in providing employees with the resources they need to stay current. Doing so fosters a culture that’s hungry for constant improvement. Institutionalizing this shared value enables employees on the frontlines to see change coming and be better prepared with opportunistic responses.
Google X, now known as X Development, is a research and development organization founded to leverage the best technology to serve seemingly untouchable problems. X was also founded on the concepts of taking risks, aiming high, and encouragement to learn from repeated failures.
4. Be fast and flexible.
Years ago, we did research, wrote a strategy, created a product, produced it, and launched it. Then we went to the bar to celebrate a job well done. Life was more about linearity than speed.
Today, speed beats linearity every time. Why? Because the world is changing faster than our old processes can keep up. Today, we have to move faster, be more experimental, more open-minded, and constantly responsive to feedback. Not just throughout the process of creation, but after our product hits the market. Today, real-time feedback allows for constant adjustment. Ours is a non-stop world of test, learn, adapt, repeat. Think of it as Perpetual Beta.
In 2009, Target made a bold move by announcing it would end an eight-year relationship with Amazon for e-commerce management. Target had signed the deal in 2001 when it was valued at $31 billion versus Amazon’s $4 billion. By 2009, Amazon had surpassed Target with a valuation of $40 billion and Target’s numbers were slipping. Target then invested billions of dollars into infrastructure for its own digital destination, launched in 2011.
Other companies that signed Amazon agreements around the same time that Target originally signed include Toys R Us, Borders, and Circuit City. We all know what happened to them. Target avoided the same fate by recognizing earlier than the others that it was propping up its own competition.
5. Be creative, no matter what business you are in.
Most disruptions today start with new technologies and are born from product leadership (Apple), operational excellence (Amazon), or customer intimacy (Netflix)* that changes the nature of the game. For better or worse, it is up to the players. To succeed in the face of disruption, they can’t see themselves as victims but, rather, as opportunists.
These core competencies are universally relevant to all businesses today. Being a more adaptive, challenging, learning, fast, flexible, and creative enterprise could lead to a sustainable competitive advantage. Those who react faster to disruption could gain market share and/or profitability, and sometimes the second iteration is better than the first.
The bottom line is that companies (and their employees) need to adopt an opportunist mindset around disruptions so they are ready to pounce when opportunities arise.
*From the book “Disciplines of Market Leaders” by Michael Treacy and Fred Wiersema
Photo credit: twm1340 on Visualhunt/CC BY-SA
