Constructive destruction offers a path to stronger growth.
Destroy your business? Don’t most business owners focus on building their businesses rather than tearing them down in some way?
Actually, there are times when a business must destroy some of its practices, culture, products and even markets so it can get beyond its constraints and grow much bigger.
Harvard Business School professor Clayton Christensen and others have described this as a form of “disruptive innovation,” the intentional act of taking apart or destroying something in order to replace it with something better.
Anyone who has lifted weights as a regular exercise is familiar with this idea. When a person does a bench press or a dead lift, their muscles are actually being broken down. Through the body’s healing processes, the muscles regenerate, growing stronger and more elastic. There are times in the life of a business when such exercise is necessary for it to become stronger and more elastic.
Let Go of Old Paradigms
There are many, many examples of disruptive innovation all around us today. Netflix did it to the video rental business, only to find its own model disrupted in less than three years. Online education is doing it to higher education and will soon do it in the K-12 world. Amazon has done it to bookstores.
What these examples all have in common is that an innovator, frequently substituting technology and processes for people-dependent and capital-intensive models, found a way to bring products and services to whole new markets while improving quality, choice and service and dramatically lowering costs.
It’s very difficult for business owners to let go of some of their longest-held paradigms about their customers and products. After all, we spent years (sometimes decades) building our success models, and our dependency on them is understandably great.
Yet, the competitive world is relentless when it comes to driving out unnecessary costs, process steps and time-wasters. If we don’t do it to ourselves, trust me when I tell you someone else is preparing to do it to us.
Making Room for the New
Here are a few questions to ask yourself as you contemplate “constructive destruction.”
First, if you could make anything in your business better, cheaper or faster, what would that be? What would it take to do that? What methods, processes, products or market foci would need to change?
Second, what exists in your marketplace today that is really a viable substitute for your offerings? Where are those coming from? What defense would you have against those substitutions other than lowering prices and margins?
Third, what in your enterprise today is actually choking off the new? What would it take to clear those weeds out of your garden so that you can plant some new products, approaches, pricing or methods?
If you haven’t done strategic planning for a while, now would be a good time to engage in such a process, perhaps beginning with an assumption that there may well be great opportunities to be uncovered by thinking about constructive destruction. Do it to your business before someone else does.