Crafting a Business Strategy that Drives Disruption

When feeling the urgent pressure of new technologies, disruptive change and fast-moving markets, inspirational leaders focus on a surprising question: why does our organization even exist? It’s easy to get caught up in the whirlwind of the latest tech or what the competition is doing, but deeply understanding your core purpose can cut away distractions, focus you on what matters and create a vision for what’s next. 1/ Start by looking at the very nature of your organization and strip away the packaging, pricing and delivery. Ask yourself: what unique role does this organization play in the world? Why do we exist, and what about that has remained consistent across our past and our present, and should inevitably drive our future? 2/ Craft a vision for the future that is disrupted by change but grounded in purpose, envisioning how the world will continue to rely on our existence, as needs are timeless. Resist picking specific technologies, products, packages or solutions that this value is embedded in, because these are not timeless. 3/ Engage your organization in using this purpose to inspire what might be next. Ask yourselves, what are other ways that we may fulfill our purpose beyond what we’re doing today? What are the different shapes, business models, packages or delivery vehicles that might look different but magnify our purpose? Which of these might help us not just survive, but thrive in a future shaped by disruption and new technologies? Look closely at organizations that have thrived through previous disruptions to recognize how this successful pattern of returning to their purpose has fueled success. Take Disney - an organization that has embedded magical family experiences through immersive storytelling into everything it does (its purpose), whether it’s hand drawn animation, theme parks or CGI. The core idea here is to resist simply reacting to markets or chasing trends, but rather to follow purpose-driven innovation: getting inspiration from how we reimagine ourselves to reinforce our reason for existing, not distract from it. #LIPostingDayMay

A Disruptive Strategy is about making solutions more affordable…EVEN if they're not as sophisticated. The goal of a disruptive strategy is to get the job done more cheaply, which is a strategy that is appealing to both over-served customers and non-consumers (people who don't have the means to afford existing solutions). Here are 4 examples that demonstrate the dynamics of a disruptive strategy: 1. Google Docs: - Less feature-rich than Microsoft Office - But free and accessible anywhere - Gained mass adoption from overserved users and non-consumers 2. TurboTax: - Simplified tax filing vs traditional services - Lower cost than professional preparers - Captured customers who found CPAs too expensive, and wanted to do it themselves 3. Dollar Shave Club: - Basic razors compared to Gillette - Significantly lower monthly cost - Attracted customers tired of premium pricing 4. Coursera: - Less comprehensive than traditional universities - Fraction of the cost of formal education - Opened education to previously excluded audiences If you want to pursue a disruptive strategy, the pattern is clear: - Target overserved customers - Offer a "good enough" solution - Offer dramatically lower prices - Expand access to non-consumers A truly disruptive innovation sets the groundwork for the eventual pursuit of a Dominant Strategy, where the process of disruption is concluded by getting the job done better AND more cheaply over time. 1. Start with a basic, affordable offerings 2. Gradually improve the offering over time to get the job done BETTER and more cheaply 3. Eventually compete with premium solutions and underserved customers 4. End up displacing market leaders Knowing the process of disruption opens the door to long-term winning strategies.

Getting back to what I know and love best... the application of disruptive innovation (DI) theory to the vertical lift domain. So why is this important? If you are a disruptor, incumbent, investor or other stakeholder it can help you to better predict and forecast the potential impact of DI as well as form a strategic gameplan or competitive response based on empirical evidence spanning several decades. There are three forms of DI driven by the eVTOL as enumerated in the illustration: 1️⃣ Low-end - disruptor enters near the bottom of the established market with a lower tier offering in terms of price and performance 2️⃣ New market - disruptor seeds an adjacent market with a new, economical use case based on a mix of novel and traditional performance attributes 3️⃣ High-end - disruptor enters near the top of the established market with an aspirational offering that carries a very high list price The blue charts on the right are based on a generic model of DI and tweaked to reflect the particular go-to-market approach. Closer inspection shows differences in the y-axis, the DI trigger (the squiggly in the bottom left), and the labels on the bell-shaped distribution of needs in the upper right. Performance under low-end disruption is measured against speed, range, payload and endurance which are traditional attributes that define the mainstream VTOL requirement. This bottom up entry carries a very low list price reflective of anemic performance. The DI trigger that opens the door to over-served customers here is the need for a low cost offering with less raw performance and fewer bells and whistles. Disruption occurs when the upstart improves the performance of their offering enough to meet the mainstream requirement (gold dot) while preserving their economic advantage moving upmarket. New market disruption targets a niche opportunity serving non-customers far removed from the established market, with a new set of performance attributes that mix some traditional ones with new and novel features. The DI trigger is the need for new, economical capabilities that encourage usage by buyers not swayed by the established lineup. Disruption occurs if the upstart is able to improve on enough traditional measures of performance to meet the mainstream requirement. The high-end disruptor markets a premium offering with a high price to match. The DI trigger is the need for aspirational features attractive to demanding customers in the very top tier of the market, where pricing far exceeds the mainstream requirement. Disruption occurs when the upstart is able to drive their costs down to offer more affordable pricing that siphons customers from the mainstream. Each form of DI follows a pattern that can be used to predict uptake. At a minimum, the trajectory or rate of improvement in the green line is indicative of whether and how fast disruption can take hold. The strategic ramifications are textbook and the subject for a follow-on. #eVTOL #AAM #DI