You know you’re being disruptive when everybody says, “There’s no way that business is going to work.”
Back in the 1990s, I owned a video store. Blockbuster, the movie rental kingpin, opened up in a small town near my store. They hired all my employees, were double my size, and eventually closed my store down. Not that a hold a grudge, but I went on to become one of the co-founding executives of Netflix, and later the president of Redbox, and the rest, as they say, is history.
Not that we knew we would be disrupting the entire entertainment industry at the time. When we started out, Netflix was a small startup that mailed DVD movies to people’s homes. Few embraced our new idea in the beginning. At one point, needing a strategic partner, we offered to sell 50% of Netflix to Blockbuster, and they shot us down. In fact, Blockbuster execs told us that they didn’t think Netflix was a good idea.
They weren’t the only doubters. When I first told my family that we were going to open a business that mailed DVDs to peoples’ homes, they looked at me and said it was one of the stupidest ideas they had ever heard. I laugh about that now and use it as a gauge. You know you’re being disruptive when everybody says, “There’s no way that business is going to work.” That’s when you know you’re on to something good!
Ideas today can become companies tomorrow
These days, it’s so easy for new companies to get started and quickly disrupt entire industries. Many of the traditional startup costs and barriers to entry don’t exist anymore, so it’s quicker and easier for businesses to get off the ground. Ideas today can become companies tomorrow. As an executive, that might excite you and also scare you – but you can’t be afraid of disruption. If fear makes you hesitate to embrace change, your business can quickly become obsolete.
Disruption leads to opportunity
I’m no stranger to disruption. I’ve spent the last few decades working with other great leaders radically disrupting industries that were deeply entrenched in traditional business models. We know how it turned out for Netflix. Blockbuster went bust 10 years ago, and today, Netflix has more than 167 million subscribers worldwide. What made the difference? Blockbuster stuck with its traditional business model, and Netflix evolved. It went from mailing DVD movies to providing a streaming service, and now it’s investing heavily in original content. To reach this level of success, the company has constantly evolved and continues to do so.
Businesses or industries that dig in their heels and resist innovation can’t keep disruption at bay for long. I believe almost all industries that are stuck in the old ways will eventually be disrupted by innovative new ideas. Some businesses will survive and others won’t – disruption creates change and opportunities either way, so executives need to be brave enough to evolve and take advantage of the opportunities.
How to evolve if your company is becoming obsolete
- Listen to your customers
- Embrace innovation with clear goals
- Hire people smarter than you
- Don’t be afraid of disruption or failure
Listen to your customers
If you’re questioning how your company should evolve, listen to your customers. They’ll tell you exactly what you need to do. You might think you know what your customers want, but when you really listen, their answers might surprise you. Here’s a great example: When I was a consultant for McDonald’s in 2003, the restaurant chain was trying to figure out why sales were declining. They tried offering healthier menu choices and even tried Redbox DVD rentals, but when they asked customers what they really wanted, guess what the customers said? Cleaner bathrooms. That’s right. It turns out that a big customer segment for McDonald’s is parents with young children, and unclean bathrooms were a big deterrent. McDonald’s set out to improve its bathrooms, and the results were increased sales and higher share prices. Believe me, listening to your customers is the key to continued success.
Embrace innovation with clear goals
As the speed of business continues to accelerate, it’s crucial for companies to embrace innovation and evolve. Embracing innovation can position your company to keep up with the fast pace of today’s digital economy.
Businesses spend so much time protecting their existing revenue that they don’t think more about the future. Some businesses do nothing and just hope something magical will happen. But in business, we know that something magical never happens. You have to take your future into your own hands. Embrace innovation, have clear, quantifiable goals, and evolve before your business becomes obsolete.
Hire people smarter than you
You have to be smart enough to surround yourself with people who are smarter than you. It’s true, if you hire people smarter than you, you only make yourself better. You not only grow, but you become a better leader. It’s very important for businesses to invest in the right people. Hire the right people, and train your existing employees to have advanced skills and industry expertise. What makes it work is a combination of people, culture, clear objectives, and leadership. When you do that, you can create a company that embraces innovation, continues to grow, and isn’t afraid of disruption.
Don’t be afraid of disruption or failure
Some business leaders hesitate to change or embrace innovation because they are afraid of disruption or failure. But one of the worst things you can do is be paralyzed by indecision or fear. These days, almost every industry is being disrupted, so as an executive, you can’t be afraid – you need to be brave. If you hesitate to embrace change, your business can quickly become obsolete.
Remember that disruption creates opportunity, so take your future into your own hands, be brave enough to evolve, and take advantage of that potential for success.
Mitch Lowe will be delivering the keynote address during the Disruptors Summit 20/20 at SAPPHIRE NOW, May 12, 2020, in Orlando. This blog is the first in a series of articles by disruptors and innovators who will be speaking on the Disruptors Summit stage.