The one-sentence summary
To survive in a digital world, companies need to transform the core, find big adjacencies, and innovate at the edges.
- This is what you need to do to shake up your business in a digital world.
- We are in the middle of an era of creative disruption. It started with the launch of the first web browser in 1993 and will continue for at least another decade. The term is a hybrid of Joseph Schumpeter’s notion of creative destruction and Clayton Christensen’s disruptive innovation.
- This disruption is caused by new businesses either providing something completely new or something traditional but in a radically improved way.
- Incumbent businesses are thus faced with a stark choice of reinvention or oblivion.
- The internet has created a new physics of business, whereby the rules of who can compete in which market have been completely rewritten.
- Four forces are at work: entrepreneurs and new entrants, consumers’ needs and desires, the proliferation of connected devices, and economic volatility.
- If businesses are to weather this, they need to:
1. Transform the core: stick to what you do but reinvent how you do it
2. Find big adjacencies: use your capabilities to find new business areas
3. Innovate at the edges: these are either ways to transform or find adjacencies
WHAT’S GOOD ABOUT IT
- Warren Buffet coined the term economic moat to describe the ability to maintain competitive advantage over rivals. The internet saw a lot of these filled in.
- Strategy is not about avoiding unforeseen circumstances – it’s about making sure you can deal with them.
- The right people means getting a blend of firestarters, rock stars and fixers.
- It is crucial to set up businesses that will cannibalise your business, if only because someone else will do it if you don’t.
- A grid covering ‘From x, To y’ is a good way of organising objectives.
- Businesses who have adapted successfully did five main things:
1. They started early
2. Their internet businesses have always been free to compete with their traditional businesses.
3. They were forced to think internationally
4. They continually repeat and refine their processes
5. The core still counts
WHAT YOU HAVE TO WATCH
- Not much. It is well written, as you would expect from ex-journalist.
HOW THIS THINKING COULD BE APPLIED TO YOUR BUSINESS
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