Organizing to Disrupt

Clayton Christensen’s The Innovator’s Dilemma has helped frame an entire decade of thinking on innovation. His taxonomy of radical/incremental//sustaining/disruptive, despite being very widely misunderstood, has been the filter through which all of the popular innovation literature has been viewed in recent years. Now, more than a decade later, finally companies are figuring out how to systematically organize to disrupt. Three recent books (one blessed by Clay himself) address bits and pieces of this theme, so let’s try to synthesize an overall view of what it takes, and along the way, talk about these three new books (and a bunch of older ones that have play key roles in this story).

First, recall what disruption actually means. I made up a mnemonic graphic, based on the against-the-grain metaphor, to help me remember.

Disruptive innovation is innovation that attempts to deliver value outside of your core markets. Your systems resist, and current lead customers punish you for getting distracted from their top needs. The opposite of disruptive is sustaining, and both disruptive and sustaining innovations can be technically simple or challenging (that is, incremental or radical). Examples of all four varieties abound. For those who came in late, keep the Nintendo Wii in mind as the prototypical example of disruption. Remember, as a rule of thumb, that even incremental disruption can be harder to pull off than radical sustaining – the arrows in the graphic are sized according to effort.

In the decade since we first learned about disruption, it has become clear that you cannot create disruptive innovation by focusing on the foreground of disruption alone – you have to change your background of operational systems, which play no direct role, as well. That’s preparation.

So before you can organize to disrupt, you must first prepare to disrupt.

Preparing to Disrupt

When Christensen wrote his original book, the idea of organizing to disrupt was a contradiction in terms. The only realistic suggestion he had was to effectively spin out any attempt at disruption as a separate, sequestered business unit – as was the case with the IBM PC. This, effectively, was a port the classic Skunkworks model from traditional R&D (pioneered by Lockheed) to entire businesses, and suffers all the problems associated with radical surgery. By the 1997 theory, disruption is necessarily painful.

So the question that has fascinated innovators for a decade is this: can you reorganize in an evolutionary way to prepare to deliver revolutionary disruptive growth?

Growth, after all, is why the book excited interest in the first place – disruption is one of the few formulas that have been offered as a recipe for new growth in old companies.

I suspect you cannot get to revolutionary via pure evolutionary, but I believe you can ease the pain enough to avoid serious trauma. But at some point eggs will be cracked to make that omelet. But I am getting ahead of myself. Back to preparation.

Putting the Core on (Semi-) Autopilot

Mature companies in recent years have framed their primary concerns around disruption in terms of what James Collins (Built to Last and Good to Great) calls maintaining the core while pursuing “big hairy audacious goals” (BHAGs). Collins meant core values, but this is commonly (and usefully) conflated with core revenues/markets. As a colleague at work likes to say, you cannot drop the ball of maintaining the core while going after BHAGs (via disruption, acquisition or any other means). That’s a formula for not making payroll.

That means the first step towards organizing to disrupt is to make sure the core is on a reliable semi-autopilot (I’ll explain the semi- in a moment). The solution du jour to achieve this is a mix of neo-Taylorism – Lean Six Sigma (LSS) and its little brother, Design for Lean Six Sigma (DfLSS) – and a focus on modern analytics and data-driven management practices.

Analytics tells you what’s wrong with your core; LSS is supposed to fix it. Do feedback, do control, get to homeostasis (the measurement within LSS models is the weaker paradigm of feed forward control). The formula almost works. But the autonomic core-corporation has some problems.

Feedback is in good shape, at least conceptually. The recent Davenport/Harris sleeper hit, Competing on Analytics, presents a capability maturity model for the feedback part that appears to span global and local systems (though given the newness of the analytics movement, it will take a decade before the model is either properly validated or discredited). More recently, Tom Redman’s Data Driven brings six-sigma style discipline models to data quality within feedback information flows. We’re good.

The problem arises in the control bit. LSS, despite its enormous success (as evidenced by canonization in Dilbert jokes), has left two problems unresolved.

The first is that as a local improvement philosophy, it leaves truly cross-enterprise execution and profitability issues untouched (local/global is a hard conceptual pair to apply to organizations, and involves a non-traditional look at silos. Read my piece, The Silo Reconsidered, if you are interested). Waterbed effects are common: savings claimed in one DMAIC project creating offsetting, unintended (and unaccounted) new costs somewhere else. Inadvertent double-counting of savings across overlapping process improvement projects happens as well.

The second problem is the issue of operational inefficiencies in information work, and particularly, its most visible symptom: the problem people label information overload. LSS has its roots in manufacturing, and by co-opting some of the principles of agile programming, it has, with partial success begun to impact one kind of relatively structured information work – programming. But repackaging Scrum is as far as LSS gets.

Which begs the question: what of that iconic picture of inefficiency today – the harried information-work senior manager reeling under the onslaught of 328 emails a day, working amidst a chaos of IT systems clumsily transitioning from 1.0 to 2.0? What can do for him what LSS did for widget quality?

Fixing Execution in the Core: Getting Things Done

Oddly, both the problems with the control part of maintaining the core are being addressed by ideas that come from two books with Getting Things Done in their titles, which focus on execution in a way that LSS does not.

Both books share in common two elements that LSS lacks – they are dominantly right-brained philosophies, and both require you to think in unstructured ways about the meaning and content of work. LSS and its relatives provide the autopilot – they rely largely on automated computational models and formulaic human thinking. The closest LSS comes to purely unstructured creative thinking is DMEDI which, due to its very nature (like TRIZ, it attempts to structure the unstructurable in a sense) cannot handle anything that falls outside an autopilot model.

Bossidy/Charan and Allen provide the semi- prefix, by solving what LSS doesn’t solve, at the cost of requiring you to think (I am resisting the temptation to discuss corporate frontal lobotomy metaphors here).

Getting Things Done: The Bossidy/Charan Formula

The Bossidy/Charan essential, Execution: The Discipline of Getting Things Done, effectively, addresses one of the issues left unresolved by (and occasionally, created by) LSS style approaches to operations. It offers a right-brained C-suite approach to execution discipline predicated on smart, strengths-based casting decisions and a sense of narrative linking strategy to operations. Dan Pink would be proud.

It’s also a pragmatic book in the classic anecdotal-empiricist business-book tradition though. It doesn’t attempt secret sauces or process scaffolding. And it does what honest business books do: it reminds you that you have to think even with the best autopilot systems in place.

But Bossidy and Charan are among the usual suspects. As reliably solid business authors, you expect them to have useful things to say about the important business problems of the day. So to the extent that they represent mainstream business thinking, savvy senior managers have already learned much of what Execution has to teach the hard way. So while the book offers useful reinforcement, don’t expect radical impact if you distribute copies to every manager in your organization. They’re already trying. They reason they aren’t entirely succeeding is that they are inundated by email.

That brings us to the most promising solution for the other residual left by the LSS culture. This comes at you straight out of left-field – a cult book from a market adjacent to business, personal development. From an author living in that den of hippies, Ojai, CA. Who’d have thunk.

Getting Things Done: The David Allen Formula

The other left-over problem from the LSS decade – the anarchy that is general information work – has one attacker who has acquired a cult-following.

David Allen’s Getting Things Done: The Art of Stress-Free Productivity isn’t actually very new – it was published in 2001. But it took a while for the book to shake off an initial perception as a mere workspace organization book for gadget-happy IT geeks. Yes, Kurt Vonnegut was initially mistaken for a science fiction writer. Since then the book’s sales have been galloping along.

GTD, as users call it (I have been one for 5 years) is a rather unlikely candidate trigger for a business revolution. It focuses on the worm’s-eye-view level of work from the perspective of the single information worker (be it a middle-school student or CEO), and is written like a personal development book. The methods actually work (and as is always the case for methods that work, they require you to work), and do in fact succeed in bringing order to the chaos of information work. Apply the methods, and you go from being overwhelmed by information overload to a feeling of mastery which makes you wonder why you ever thought information overload was the problem.

But what makes GTD a true business strategy book rather than a personal development or desk organization book is this: it approaches creative unstructured thought via negative-enablement. The idea is to create the sort of mental clarity that allows high-quality unstructured thinking to happen by clearing everything else out of the way.

The cost is the same one that Bossidy and Charan exact: you actually have to engage with the content of the work and think. While a large proportion of Allen’s methods allow mindless plug-and-play, the critical steps in his workflow model require serious thought. GTD is not an autopilot system. The value of GTD is that it allows you to devote your scarce cycles to the right things, rather than the things that can (and should) be on mindless autopilot.

Rather interestingly, Allen uses the same metaphor as LSS – martial arts. But his black belt information worker is a very different archetype compared to the LSS archetype. Where the LSS black belt acquires the credential as a result of training in specialized methods, Allen’s black belt is more a metaphor for the Zen-like effortless sorts of execution that can arise if you ever truly get the annoying details of your life under control. I’ve been trying to get my co-workers to use the term Information Ninja to avoid confusion with the LSS Black Belt (wonder who’d win in a throwdown?).

The effects of following the sorts of mental and physical sweeping/housecleaning techniques Allen offers tend to last for about a week in my experience, before anarchy again starts to reclaim territory won for clarity. That’s the reason the main discipline required in GTD is an element called the weekly review. As you might expect, this tends to be the fall-off-the-wagon point for GTD. But rather smartly, Allen markets his methods with the tagline: easy to fall off the wagon, but easy to get back on. It isn’t quite easy, but it is doable so long as you don’t try it when you are in a pit of despair.

Putting the two GTDs together to fix LSS

So you could say that the two GTD books present an intriguing possibility: that you can fix what LSS didn’t, by building in systemic support for right-brained creative and unstructured thinking at the level of C-suite level strategy and individual-level information work.

Here’s how they relate – Bossidy/Charan tell you what you must do to fix execution. Allen provides an approach to enabling your cubicle farms of information workers to stop being distracted long enough to actually do it.

And that’s how you prepare to disrupt. Get LSS into your organization if it isn’t there already – that’s table stakes; a cost of doing business. Throw in the two GTDs.

Get, set, disrupt.

The Eye of the Storm: Managing Market Expectations

Okay, not quite. In the eerie calm between the stormy work of preparing to disrupt, and the equally stormy work of organizing to disrupt, there is a little problem we’ll call managing market expectations.

The Bossidy/Charan/Allen fix for the execution discipline gaps of LSS aren’t quite enough. They fail to address one of the key elements of Christensen’s theory of disruption that isn’t a discipline issue at all.

Your existing customers and shareholders don’t want you to disrupt.

Or at least that was the model in 1997. A central tenet in The Innovator’s Dilemma was that when companies failed to pay attention to the most important needs of their most important customers, the customers left. That’s why you have a dilemma rather than a case of stupidity or incompetence: no smart P/L manager will risk losing a $10 million account to invest in a marginal growth market that might, optimistically, bring in $100,000 in its first year. Worse, it’s a case of double jeopardy: if the lead-customer walks away, shareholders punish you again by pummeling your stock.

So before you can go ahead and organize to disrupt you have to manage expectations from these two constituencies. And that is a different challenge from building execution discipline. Simply having your core on healthy-autopilot and even actually delivering is not enough. Even if you are delivering to the top expectations of lead users and your attempts at disruption are not distracting you, there is still a price. Lead customers will punish you for merely thinking about other priorities. They will infer from your exhibited priorities that you have spare resources that you are not devoting to making their experience even better.

Fortunately, both markets and customers have begun to understand the interplay of disruption and long-term fundamental growth, so yes, they will possibly be kinder and more inclined to take the long view in 2008 than they were in 1997, but the problem of managing expectations is only mitigated, not solved, by this general shift in attitudes.

There is only one way to do that: reframe the perception of your company by paying attention to what your brand does at the corporate level. Google does this brilliantly. By emphasizing the corporate brand (which hooks to a punchy storyline of “creative”) over product brand, Google completely finesses the problem.

Think about it: do you ever entertain the thought that Google Search could be even better if Google Labs Beta didn’t waste resources? Somehow, Google has convinced us that focusing on random other projects, like the Chrome Browser, will actually help build a company that will always deliver the best search possible.

Almost every other company that dabbles in peripheral disruption experiments gets yelled at by Wall Street for distraction. What makes the difference at Google (apart from the cash cow of Adsense/Adwords) is that the brand is a 2.0 brand: based on conversations, betas, prosumership and open-source ideology. If you wanted to be cynical, you could call that a culture that legitimizes lack of reliability at launch (I wonder if J. D. Powers is paying attention to 2.0 style launch models). I cheerfully tolerate levels of bugginess from new WordPress releases that would have me swearing bloody murder at Microsoft.

So that isn’t much of an answer, but it’s the only one we have. Between preparing to disrupt and organizing to do so, you must change how you manage perceptions. And the way you do that is by creating your Brand 2.0, while simultaneously shifting value from product/service brand equity to corporate brand/equity.

Now, get, set, disrupt. For real this time.

Organizing to Disrupt

The three books I’ll talk about address three mostly overlapping aspects of organizing to disrupt: building in systems to listen to non-core customers/markets, building internal systems and management practices, and then putting both sets of systems to work to deliver growth.

Peripheral Audition: Tuned In to the Non-Core

Apologies for the neologism: we clearly need an auditory equivalent of peripheral vision.

There is an obvious gap in the literature spawned by Innovator’s Dilemma that I am surprised it took this long to fill. Here’s the gap. Obviously, to do great sustaining innovation, you must effectively engage and listen to the most important needs of your most important customers. A rich literature exists on how to do that. Try, for instance, Gallup’s Human Sigma, or Patricia Seybold’s Outside Innovation

So logically, to do disruptive innovation, you should probably listen to the most important needs of your most important non-customers. Or if you are more modest in your disruption goals, your under-consumers.

Christensen recognized this, with his observation that disruption tends to come from small and under-developed adjacent markets next to large, mature ones. But in 1997, he didn’t provide much insight into how to listen to the voices of marginalized, underserved or unserved customers.

The other two books I will talk about also address this issue, but not in a focused way. The theme of listening outside your core markets deserves a separate treatment.

Tuned In to the rescue. This recent book by Craig Stull, Phil Myers and Meerman Scott initially annoyed me no end when I did my first pass: how could a book that so clearly addresses an aspect of disruption dynamics fail to acknowledge and talk about the Innovator’s Dilemma? It actually seems like a genuine oversight. This is clearly a book written by marketers with almost no knowledge of the innovation literature – they dismiss the role of innovation via a strawman treatment of invention — they seem to have a black-and-white era mental model of innovation from the Bell Labs of the 40s.

But then I figured I was being much too academic in my expectations of references to the existing literature. Disruption is a great conceptual idea, but it is also straightforward enough (at least with 20/20 hindsight for me) that you should expect others to stumble onto it. Stull and company do.

Admittedly, Tuned In is a bit of a light-weight compared to the other heavy-hitters I’ve been talking about so far. It offers a six-step process:

1. Find unresolved problems
2. Understand buyer personas
3. Quantify the impact
4. Create breakthrough experiences
5. Articulate powerful ideas
6. Establish authentic connections

You are then supposed to cap it off with a “resonator” (essentially a viral marketing hook). This isn’t vacuous process scaffolding though, despite the banal names for the process steps. FUCQAE -r has meat on it, especially in the U, C and r bits. The spirit of the process is very much a 2.0 spirit. Though they don’t focus on social media (their listening formulas are essentially exhortations to open-ended face-to-face work-practice and ethnography studies), the formula seems like one that would work particularly well alongside social messaging methods ranging from WOM methods to community building.

Systems and Processes: Grabbing Lightning

As in chess, mid-games are the hardest to codify coherently. And it’s where blood-and-sweat books fit. Grabbing Lightning isn’t only about disruption (it is about innovation systems for all 4 of Christensen’s quadrants). I suspect the title is inspired by the phrase Dealers of Lightning which was first applied to the story of the invention of personal computing at Xerox and PARC.

The book, written by a team of academics from RPI, and funded by an IRI (Industrial Research Institute) grant, is clearly the output of research-by-committee, but it is solid, if tedious. It covers, in exhaustive (and exhausting) detail the problems of creating systems and processes to support discovery, incubation, acceleration and sustenance phases of all varieties of innovation.

It is the sort of book even practitioners won’t read line-by-line (I certainly didn’t), but it covers the ground that needs covering.

The one theme from the book that you should definitely pay attention to is acceleration. That word choice for what most people label scaling is significant. It isn’t growth in size that is key to success, it is the ability to accelerate; to create conditions for steady increase in momentum. John Kotter picked out this particular theme brilliantly in his recent slim little book, A Sense of Urgency, (which I wrote about in my piece, Urgency as Doctrine, Acceleration as Strategy.)

The Innovator’s Guide to Growth

Perhaps it is fitting that the book that pulls it all together is the one blessed by Christensen himself. Innovator’s Guide to Growth by Scott Anthony, Mark Johnson, Joseph V. Sinfield and Elizabeth Altman adopts an organizing scheme similar to Grabbing Lightning, but is subtly different in emphasis.

The four parts of this book (spanning eleven chapters) are titled: identify opportunities, formulate and shape ideas, build the business and build capabilities.

Whereas Grabbing Lightning, in covering the same territory, gives you a sense of staring at the intimidating cathedrals that will need to be built through many process instances, IGG gives you a sense of shadowing the progress of one archetypal project. So though both books talk systems, IGG really is about process instances. Think stadium versus playbook.

As you might expect, IGG itself isn’t disruptive with respect to The Innovator’s Dilemma. You get what you might expect: a refined model with few surprises, which synthesizes a believable storyline about what could work in the face of disruption dynamics.

One piece of IGG does stand out as interesting and new though – the idea of thinking of disruption opportunities in terms of “jobs to be done” in the sense of unsatisfactory aspects of the entire user-experience of human life that need fixing. An instance of a “job to be done” in this sense is the idea that consumers “hire” milkshakes as a way to fill long, boring commutes (this is what is sometimes called the affordances view of products and services).

But then, if the original theory was right within its limits, you shouldn’t expect too many surprises from a book that clearly aims to complete the line of thought.

Coda

The idea of organizing to disrupt is a complex one. This is one of my 4000+ word pieces that doesn’t owe it’s length to my fondness for hearing myself talk. So a summary is in order.

• To disrupt effectively, without fumbling, without letting the Next Big Thing get away, you must organize to disrupt.
• To do so you must first understand and solve the problem of stabilizing the core enough – through a semi-autopilot management model – by getting operational discipline right.
• You need something like Six Sigma for part of this. That is not a choice. Try to avoid that and you are toast. But Six Sigma isn’t enough.
• You need the additional, right-brained, thinking disciplines involved in execution – the C-suite execution model of Bossidy and Charan, and the information-worker discipline model of David Allen. Together they constitute the two GTD disciplines – getting things done.
• Once you’ve done that, you are ready to face the eye of the storm – brand 2.0 repositioning and market expectation management.
• Check that off, and finally you are ready to begin organizing to disrupt, by building in systems capable of listening to marginal, non-core customers and non-customers, and responding to the market opportunities they present, with a sense of urgency and a commitment to acceleration, rather than just growth.

There is one last element.

A recognition that yes, capitalism is ultimately about creative destruction. An idea that isn’t just cute and edgy code for mere dynamism and movement. An idea that includes real destruction within its scope. Eggs will be cracked to make that omelet.

p.s. In case you are reading this in your RSS reader rather than on the site, you ought to click on over — this piece is in-kind launch of a rebrand. The tag-line of ribbonfarm is now deep play for disruption. I also have a nice new theme — let me know if you like it.