Disruption is one of the only constants in the tech and media worlds. So, the question becomes how to successfully disrupt (or survive others’ disruption). These are topics that author, analyst, and thought leader Charlene Li has synthesized in her latest book The Disruption Mindset.
To commemorate the book release this week, we recently had Li join us as a special guest on Street Fight’s podcast Heard on the Street. As we discussed on the show, a common success factor for companies causing or facing disruption is to devise a strategic path that leads them to their future customer.
“I wanted to find the antithesis of the Blockbusters and Kodaks and Radio Shacks that are out there. Everybody knows those failures against disruption… Where are the successes?… What is the magic sauce that lets them do this. And it’s not the usual suspects of Google, Uber, and Airbnb; it’s companies like T-Mobile or McKinzie or Nokia. And the key thing, it’s a really simple idea, is that they are all focused on a future customer. That focus on the future allows them to make sacrifices and investments today.
An example we discussed is Adobe’s transition from packaged to cloud-based software for its creative suite. It had to not only make a hard decision about transitioning from a current product to a future one but also convince Wall Street that the plan was right despite a projected two-year revenue decline.
“They knew, because of the ways that revenue is recognized, that their revenues and income would go down for 24 months…. So the CFO went to Wall Street and told them, ‘I have great news for you: Our earnings are going to go down for two years, and it will be fantastic.’ And that’s exactly what they did… The revenues go down, and the income tanks, and the entire time their stock price is going up. And it’s because they were able to explain what this strategy was to go after this future customer.”
We also go deeper with Li on topics she’s passionate about, including reforming social media and helping executives find the “aha moment.” In all cases, it’s about listening. Finding future customers and knowing current ones can be accomplished by using social media to truly listen rather than just put out fires.
“Turn it from social monitoring where we’re just looking for problems to solve in customer service or opportunities to sell people more things to really listening to what people are saying and how they’re feeling. And use that as an indication of how strong that relationship is. I think social can act as the conscience of the organization.”