Tuesday, April 18, 2017

“Disrupt” is the way to play

The key strategy lesson I was able to take away from John Chamber’s article “Cisco’s CEO on staying ahead of technology shifts” was centered around disruption. Markets are moving at faster pace today than ever, and thus, pushing ourselves to disrupt the market and at times, ourselves has become key to survival. This disruption is caused by two factors- rapid advancement of technology and globalization, which allows new business models to enter the market and with rapidly declining costs.
More than a decade ago, disruption was a rare exception. However, it is now a reality that companies face on a regular basis. Thus, it is important for organizations to make disruption fundamental to their strategies and constantly strive to innovate, or else, stand the risk of disappearing. This can be best explained by looking at the tech leaders of the past. Hewlett Packard, was once an organization whose tagline was– “invent”. In recent years though, HP has only cut costs and made acquisitions, but has not created a product that will disrupt the market. As a consequence, their profits have been on a decline.
Same is the case with Blackberry. They had initially disrupted the electronic mail market by introducing mobile-email which Microsoft or Palm (who owned desktop email) could not compete with. But Blackberry stopped innovating as well at some point and that is when Apple, Google and Samsung disrupted them with the smartphones. As a consequence, their sales have plummeted. They sold the firm to an outside fund.
On the other hand, firms like Google and Amazon have constantly disrupted the market as well as themselves. Amazon disrupted themselves when they decided to sell more than just books. They disrupted themselves again when they entered the cloud services market with “Amazon Web Services or AWS”. Most recently, Amazon touched new horizons by competing in Artificial Intelligence as well with their product “Alexa”. This is highly impressive but when you think deeper, you will realize that they are doing just what is required to cement their place in the market.
The above aligns well with what Cisco CEO Jeff Singer mentions in John Chambers’ s article. At Cisco, Jeff too has made sure that the organization remained innovative by making it part of Cisco’s strategy. The management created a start-up group outside Cisco to build something which will become their future business. Cisco also made key acquisitions of firms that were building innovative products. But the key to this was the fact that Jeff was always in constant conversation with his clients and took ideas from them. Jeff stresses upon how important it is to stay on top of the game with innovation. If you are too late, you may miss the bus.
References:
HP – outsourcing, acquisitions but no innovation

HP- profits on decline

Blackberry Sales decline


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