Disruption is not for the faint-hearted in business. It involves changing consumer behaviours and industry practices, and totally transforming your category and the brand experience.
To understand how organisations and brands achieve this, it’s worth focusing on the DNA of what makes up a disruptive organisation. This breaks down into four main areas embracing the individual, the team, the organisation, and the consumer.
Apple’s Steve Jobs famously described disruptive individuals with his “Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in square holes” comments.
Disruptive individuals tend to be defined in psychological terms as “productive narcissists”. Behavioural traits often common to founders who lead these businesses are that they are free thinkers, want to create – not understand – the future, visionary leaders, they’re proud of their accomplishments, and make use of humour, often in a self-deprecating way. However, they don’t always consider others and, while they’re great on the big picture, they’re not so hot on the detailed analysis. And, be warned, there can also be a dark side to these individuals. Just look at Donald Trump.
Disruptive teams feature people with distinct skills. They need to be filled with people with a range of qualities: disruptive thinkers, results drivers, pragmatists, rule followers, and relationship managers. Teams with this blend of skills, people who are good at building social capital and process as well as providing the disruptive thinking, are more able to deliver, because the foundations needed for disruption rely on social connections and a shared vision; which in turn lead to trust, making it easier to collaborate on areas and, ultimately, to deliver innovation and market disruption.
Disruptive cultures are based on creating psychological safety so that people can be themselves without fear of negative consequence. They need to be able to question and not always agree. This is proven to boost employee engagement, collective learning, innovation, productivity and success. Research from Google found that sales teams that feel psychologically safe deliver results that are 17% ahead of target.
Some 40 to 90% of innovations never become a commercial success. This is because disruption means change, and consumer resistance to change is human nature. Disruption can conflict with beliefs and socially accepted behaviours, and many people tend to be happy with the status quo, so the ability to persuade people to change their habits is an important part of any disruptive organisation’s DNA.
Three Disruptive Organisations
The true disruptors excel in each of these four areas and a trio of them, healthcare tech start-up Kaido, homeless charity-cum-venue The House of St Barnabas, and beauty subscription service Birchbox, provided more insight into building a disruptive organisation at Rufus Leonard’s recent “The DNA of Disruption” event.
Rich Westman launched Kaido, which uses technology to track people’s healthcare data, a year ago. A sports scientist with experience working with rugby union teams Leicester Tigers and Worcester Warriors, he started out thinking he’d create a health data app but instead Kaido has built a cloud-based platform to aggregate people’s health data from multiple devices, and taken a business-to-business route of offering its service to people through their employers.
Westman said that an open and collaborative approach has proved vital. While remaining independent, Kaido has since partnered with Microsoft: “Start-ups want to protect their IP but working with Microsoft obliterated the original business plan, and we came out in a position to be disruptive – so don’t protect your ideas as a small company, if you share you can grow an awful lot quicker.”
Sandra Schembri joined The House of St Barnabas, the London charity that helps the homeless get back into work, nine years ago. Since then, it has radically changed its model based on a members club located in its Georgian house in Soho. This exists to make a profit for the charity, making The House of St Barnabas a genuine social business.
Schembri said that working within a culture based on disruption isn’t always easy: “We created a bag of tension… but it gives people permission to try, maybe not always succeed, and share their learning.”
“This is built into our structures – giving people permission is not enough, you have to build it into their work day. So we stole the idea from Google that, for 12 days a year, people can do whatever they want as long as it works towards an operational goal, and this activity has to be outside their usual area.”
Janis Thomas is the marketing director at Birchbox UK, the beauty subscription service, which has reached 1 million subscribers worldwide and is set to hit 160,000 subscribers in the UK by the end of the year. She emphasised the importance of the consumer to a disruptive organisation: “Within beauty, consumer choice is overwhelming. What we do differently is the consumer. Prestige beauty retailers target the devoted, high spending customer, and that’s 20% of the population. Our different approach is that we talk to the ‘beauty majority’, the 70% of the population who have a demanding life and don’t have two hours to spend getting ready.”
What’s Next For Disruption?
It’s clear that innovation lacking the support of teamwork and organisational structures rarely achieves consumer acceptance. Beyond this, it’s also apparent that understanding the consumer, and their various interactions with a product or brand, provides the necessary social currency for a disruptive innovation to be a success in its market.
Teamwork, organisational structures, and understanding the consumer, are therefore as vital in determining success for disruptors as the initial spark provided by the “productive narcissist”. There are big opportunities for challengers that understand this, and threats to come for existing players that fail to act.