What makes a business disruptive?

I like Kathryn's introduction to the topic of Big Data. For my own part I have seen a great deal on this over the past few years, not least due to being co-located on a business park with BT's global R&D site, Adastral Park in Suffolk, where Big Data is a major focus area. Some of the work going on there is fascinating and is already being used to help businesses transform themselves. Examples include simple improvements to the way call centres manage calls, to the design of new products. But is it disruptive? I think there will be much more by way of disruption to emerge from this work - we are only at the beginning of the journey.

Much of the general discussion on Big Data has been from a more technical perspective and, as Kathryn rightly highlighted, it's not the data itself but what you do with it to extract value that matters. But enough of that, Big Data is definitely disruptive and I know we will undoubtedly be discussing it many times in this blog as we move forward, so for now I want to look at disruption itself. What makes disruption successful? Where do disruptive ideas come from? And what are some examples of potentially disruptive innovation in business, and the inventors behind them?

What makes disruption succeed?

There is no single answer to this question. Disruptive ideas pushed by enthusiastic people can be unstoppable but disruption and enthusiasm alone don't guarantee success. Someone may have an even better idea or simply be better at implementing it. I remember the old VHS vs. Betamax debate: no-one really knew which would win, or even if both standards would prevail. The result was that VHS stole the show. Why?

Everyone said the Betamax technology was better, particularly in video quality where it was probably an order of magnitude better, but VHS was cheaper and, importantly, marketed to much greater effect. Sony, behind Betamax, concluded that content was the difference (VHS had managed to bring more content to market faster) - so they bought Columbia Pictures in Hollywood. Sounds a little drastic to me but it is one way forward.

Personally I think the whole marketing approach for VHS was simply better: sharper and more comprehensive. For a start, VHS equipment was rolled-out out faster, through any retail outlets they could. As a result it also achieved volume faster which drove prices down even further. All while being continually supported with content. Therefore content was only part of the reason.

Today of course things are different, the Internet has changed how to get to market, being a disruptive influence on its own. What this says to me, regardless of the times we live in, is that knowing how to deliver is just as important as having a great product - hence the importance of the team backing the 'inventor' themselves.

Disruptive ideas and approaches

Invention is all around us. Ideas can come from anywhere. Most of us have similar experiences in life but only some of us find the opportunities. Why is that? They say successful people make fast decisions. I don't believe this. I think successful people are constantly, even if subconsciously, looking for specific opportunities - when the right one comes along they take it immediately giving the appearance of making a fast decision. The key therefore is to be constantly open to new ideas, new opportunities, to constantly get involved and ask questions. That way you will find the opportunities you are looking for. We all have the same opportunities, only some choose to take them. This is why networking is important.

I am about to become the Chairman of the Eastern Region of the Pipeline Industries Guild. A small but focused group looking to enhance the pipe industry (suppliers, contractors, utilities etc.) These companies are typically large established organisations which sometimes struggle with innovation. How can you have innovation in an industry sector that is old, culturally led by engineers (process, perfection, risk aversion etc.) and frankly where regulation, despite its stated aims, constantly holds real innovation back?

That said innovation does exist - sometimes in major ways. I attended a presentation recently given by Sharad Gupta from Skanska talking about a project to build a new water recycling plant for Anglian Water. What I found particularly interesting was not the project itself but how they went about it and the results they achieved. They reduced the project costs dramatically (>50% reduction), reduced embedded carbon dramatically (>70% reduction) and halved the time spent on site (disruption, health and safety etc.)

They did this simply by acting differently. They used a new approach to project management with a particular emphasis on the wider team being involved throughout the project. They embedded new materials and technologies in the solution. And in particular they embraced data usage, on site and in the office. Sharad called it "Industrialised Construction". As an innovator I listened with interest - I saw immediately how these ideas could be used in other high volume, low value projects like repairs to leaking water pipes. I'm now following up on some ideas. Again, it all comes down to networking, pulling ideas from different areas and coming up with something new. Is that what inventors do?

Disruptive Innovators

I recently attended the 2016 RB Disrupts event at the Bankside Vaults where I mixed with many driven people and countless exciting ideas. Two of the companies that made a particular impression on me were What3Words and Jukedeck. Both are new businesses founded by people with simple ideas at their core - ideas that are, importantly, easy to grasp although challenging to make work. That is where the drive, enthusiasm and intelligence of the team, and the inventor in particular, come in.

Jukedeck is about computer generated music. Ed Rex, the founder, is a music graduate from Cambridge. Clearly clever and obviously a great musician. He saw an opportunity for royalty free computer composed music, for markets such as advertising and retail. With his knowledge of music thought he knew how to do it. The trouble was he did not know how to write software - so he innovated and taught himself. He admits it was not the most productive way to go about it but he pursued it and eventually got there (after spending a long time alone in his bedroom!) Having now raised funds the business has launched its first product - a fantastic illustration of a simple idea that may well become a disruptive global business. Ed himself comes across as a little modest but not only is he an inventor, he has demonstrated how to build a team to complement his own skills.

There is undoubtedly a large market opportunity for them to exploit. I don't see much competition today and having tried it out and spoken to a few colleagues, I think they will win.

What3Words is an equally fascinating company: the idea is to overcome GPS inaccuracy; to provide greater accuracy for post codes and to provide accurate addresses for places where no addresses exist. Chris Sheldrick was fed up with suppliers not finding site entrances in a previous role. He saw an opportunity to essentially divide the surface of the earth into 3m by 3m squares, and then given every square a unique identifier in the form of 3 words. I understand there are trillions of squares so the combinations of 3 words are significant. As someone who works in an industry that relies on accurate GPS coordinates (better than 10cm), and who is all too familiar with the true inaccuracy and unreliability of GPS at this level - I understand the opportunity.

Of course, there are complex algorithms and the like in their software, but as a user you simply need to remember 3 words - even I can do that! This is an invention for the world. Chris's challenge is to get industry to take up the solution. I believe they are making great progress but the existing GPS competition is also hotting up. Great invention - but will the team win out? I hope so!

Making your disruption successful

As can be seen from the examples above, having an idea is only the first step, following it up to create the first version of the product, a commercially viable product, is the next and biggest step. To this end building a single cohesive team with all the requisite skills is critical to delivery. But above all the founder, the driver, the inventor must maintain the enthusiasm and energy to see the business through to success.

Disruption comes in all shapes and sizes. We all have ideas. To make yours successful all you have to do is make it happen.

As Nike says, just do it!

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