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Why It's Important To Make Your Company The Disruptor, Not The Disrupted

Forbes Technology Council
POST WRITTEN BY
Roman Stanek

Deloitte’s recent study, which identified the key characteristics of Fortune 250 CEOs who respond well to market disruption, gave me a lot to think about. While many of the highlighted traits -- like cultivating emotional fortitude -- are ideals we should all strive to achieve, I was struck by the overarching tone of the study and the way it spoke about disruption.

The study’s results seemed to be presented in a manner that suggests large organizations should try to avoid being disrupted, when in reality, all companies -- Fortune 250 or not -- should be figuring out how to become the kind of company that disrupts the market. In other words, the message shouldn’t be “how to avoid becoming Blockbuster,” it should be “how to become Netflix.”

However, embracing disruption is easier for some companies than it is for others. When it comes to actually disrupting the market, startups operate at a bit of an advantage when compared to larger companies because startups are typically born out of identifying a need that other, more established companies have clearly not met. A startup must produce the kind of innovative, game-changing products, services or ideas that fundamentally change the way we live or work. Otherwise, it’s likely to fail and be swallowed up by another company with better name recognition.

Startups are also usually smaller and more nimble and are thus able to avoid unnecessary bureaucracy. Any innovation can be killed by the kind of bureaucracy found in larger companies with more management levels and strict processes. In fact, bureaucracy is part of Warren Buffet’s ABCs of business failure, and it grows rampant as companies add employees and its organizational structure becomes more complicated, with unnecessary committees and approval procedures. Too often, employees encounter corporate bureaucracy that tamps down new ideas purely because the idea isn’t coming from the department or team assigned to work on it. Sadly, for these companies, employees who want to do something innovative and are prevented from doing so will simply go elsewhere if a company culture that embraces risk-taking and disruption is not fostered.

Large companies have the resources and the name recognition that attract top talent, but I find that many of them strive to maintain the status quo. Their focus is external -- looking at how they can respond to what their competitors are doing, but it should be internal -- highlighting how they can empower their employees to find the next “big idea.”

In last month’s article, I discussed the three key values that make it possible to create the kind of environment where employees feel comfortable taking risks. Of these, the most important value is this idea of making it OK to make new mistakes. If a company is seeking to dramatically disrupt the market, there needs to be a company culture in place that rewards employees for pushing the envelope in their quest to create the next big thing.

Maybe a mistake can serve as a learning opportunity for the rest of the organization, or maybe it’s a mistake now, but tweaking just one small thing could yield a viable idea. These ideas will never come to light if employees are disincentivized from trying new things or are unwilling to present what they’ve been working on, even if it is still a work in progress that could be improved by other employees sharing their input.

However, this is a difficult balancing act given the high stakes for a small company or a startup, where you may pay for a mistake with your job or significant lost business. One good idea -- or one mistake -- could have a huge impact at a small company, whereas good or bad effects are more limited at a larger company that can absorb setbacks more easily. On the other hand, larger companies are notoriously slow to change, and employees may often be unwilling to suggest something new because they recognize that their big idea will never actually be implemented. In this situation, an idea is never even given the chance to become a mistake -- or a success.

So how do you support risk-taking when the stakes are so high or when the odds seem so insurmountable from an employee’s perspective? It requires taking calculated risks that could yield a substantial reward, as long as a failure doesn’t affect the business too greatly. This does, however, require companies to begin to embrace risk for the sake of becoming a market disruptor, even if a few mistakes are made in the process.

Changing this mindset or creating this kind of culture can be difficult because no one enjoys making a mistake. However, without new mistakes, there’s no learning and no progress. A supportive work environment that celebrates experimenting isn’t just a nice idea to put on a values poster for the office; it’s something that people need to experience themselves. Taking the kind of risks that foster disruption can be intimidating, which is why it’s so critical to ensure that employees know that their work and their mistakes are valued.

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