Why You Should Consider Disrupting Your Own Business

Umut Cikla

Smoking is still quite popular in Japan, but not in traditional terms. While in Japan for a business trip last month, I observed a big change in the habits of Japanese smokers.

We’re seeing this new trend on every street corner in Tokyo as many people turn to what they believe is a healthier option to smoking. The shift is enabled not by health organisations, government, gyms, or sports clubs—but by cigarette manufacturers themselves.

Manufacturers like Phillip Morris, Japan Tobacco, and British American Tobacco recently introduced smokeless tobacco devices in the Japanese market because they recognized traditional cigarette consumption rates were decreasing globally and use of e-cigarettes were increasing.

Instead of resisting, they chose to disrupt themselves

Manufacturers disrupted their own traditional business model by creating rival products to their tobacco-based cigarette business and transforming the way tobacco has historically been consumed. The success of this approach has been enormous. Even as the traditional cigarette business is shrinking 6-10% a year, the new business model has grown more than 120% annually.

New products, whose operations are based on heating tobacco instead of burning it, has already taken over 5% of the Japanese tobacco market.

We should embrace this mindset, regardless of our business domain or industry. If we stick only to traditional ways of doing business, someone with a different, modern, technology-enabled business model will certainly disrupt our business and eat up our profits, and our brand will quickly take its place in history.

Adapting a wait-and-see approach and resisting against new trends is the worst thing a business owner can do today. We must all accept the fact that no company in the world can go on forever in its original shape.

Digital transformation is real—and it’s here to stay

Companies must be always be prepared to sell different products, services, or experiences, and business leaders should be in the driver’s seat of this change. Otherwise, demise is almost certain—just take a look at some of the retail brands that have gone bankrupt this year in the U.S.

Have you witnessed any other companies that have created alternatives to their traditional business? I’d love to hear your comments and experiences.

For more on how disruption can benefit business, see Innovation: Parting With Traditional Industry Trends.

Umut Cikla

About Umut Cikla

Umut Cikla is focused on growing SAP solutions in the retail and consumer products industries. He is a member of the SAP ANZ Industry Value Engineering team, which works with the broader sales and services teams to showcase to customers the business value of and the road map for SAP solutions to guide them in the relentless transformation to digital in the consumer industries.