Matter. Julie Williamson
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you feel like defining your edge of disruption is a little overwhelming, you are right where you should be. If it feels like it may change the fundamentals of your business forever, you are on it. Don’t worry—once you get there, you will have the ability to stay there, while continuing to look forward and to push your customers, your industry, and your markets in new directions. But first, you need to learn about the three things required to get there.
When we looked at companies that have succeeded on the edge of disruption, that are delivering the highest value possible to customers, we observed that they brought three things to the journey. Every person and every company you meet in this book has these three things in common, and you need to find them for yourself if you wish to become the obvious choice in your market. The three things you must have are the courage to challenge your assumptions, the ability to take an optimistic stance about the future of your industry and your place in it, and a desire to explore the unanswered questions, to know more about the world around you. Let’s consider each of these in turn.
HAVE THE COURAGE TO CHALLENGE ASSUMPTIONS
First and foremost, when you set out to define your edge of disruption, you absolutely, unequivocally must have the courage to challenge your assumptions and deeply held beliefs about your industry, including how you make money and provide value. You must step out of the container of your immediate environment and be willing to stretch your imagination and your understanding of possibilities.
Let’s take a minute to flash back to 1916, and imagine what might have been on Clarence Saunders’s list of assumptions. We’re willing to bet “The highest level of service is to serve someone yourself” was on there, along with “Customers like to make a list of what they want,” because it was assumed that browsing around a store was no way to spend precious time!
Take a good look at your assumptions and test yourself. Are you pushing out of the echo chamber of your own business far enough, or are you stuck on the model as it is known today?
What about GHX? According to Bruce, in those early days plenty of industry players assumed no one would ever really be willing to share their data. They suggested that manufacturers would bias the exchange for their own benefit, or that providers would not be willing to participate, fearing a loss of influence over their suppliers. Everyone seemed worried about losing control of their data, which was a big assumption, given that many of them actually didn’t have much control over their data when it was managed in-house at the time. Some leaders in the founding companies even admitted later to not believing GHX would succeed. Thankfully GHX did succeed, and it did in part because it was willing to challenge these assumptions head-on.
It would have been no different for Homeplus. You can hear critics saying, “People prefer to buy fruits and vegetables in person, carefully selecting their own.” Another assumption might have been, “Growth in apps for phones isn’t relevant to buying groceries.” Whenever you are getting close to the edge of disruption, the assumptions become louder and harder to ignore.
Do it for yourself right now. Pull out a piece of paper and write down the five most irrevocable truths that you believe about how you do business. Truths that, when you are honest with yourself, may in fact be blinding you to opportunities that are right in front of you. Opportunities that the insular world of your industry and your organization are hiding in plain sight. Embedded in the results will be pointers to your edge of disruption—the ideas that are too precious to challenge are the very ones you must examine. Hang on to that piece of paper while you read this book; use it as a bookmark if you have a paper copy. You may feel the need to come back to it time and again.
We know it is hard to challenge your assumptions, but you must do it because those sacred beliefs and unconscious biases blind you to the opportunity that is hidden in plain sight all around you. You can challenge your assumptions about how you do business and what makes you special—what you believe about yourself and about your competition. You can also orient around the customer perspective and examine assumptions about what they expect from you. It may be necessary to tap into outsiders to gain access to thoughts on industry convergence, legislation, or cultural trends that are hard to see from an internal view. Take a broad inventory of the assumptions you have in each of these areas, and test them by talking to others, doing research, and getting diverse input to help you to see them differently. Test yourself. If you aren’t feeling a little uncomfortable, if you don’t see anything on your list that makes you think, “That’s just not possible to change,” you may not be pushing far enough.
Going along with the courage to challenge assumptions, defining your edge of disruption requires you to take an optimistic stance about the future of your industry and your place in it. People sometimes shy away from sounding overly optimistic, because they worry about sounding naïve. But without optimism that your industry and your business can thrive, there’s almost no point in doing the work of heading to the edge of disruption.
Pessimism is the foundation of price wars. Because you can’t see any other way to do business and charge a premium for your services, you focus on driving down cost and winning on price. Time and again we’ve encountered people who feel deeply pessimistic about the future of their industry or their place in the market. This is a crushing situation to be in, because it diverts all of your energy into protecting where you are and prevents the best people from spending time thinking about what “could be.”
We believe there are not really pessimistic and optimistic people; rather, there are pessimistic and optimistic questions. Finding your edge of disruption, and then thriving from what you learn there, is about asking more optimistic questions. Optimistic questions are growth questions for the future. Questions like “How can we use this to our advantage?” “What opportunities are hidden in this disruption?” and “How could we get ahead of this change and profit from an early-mover advantage?” Pessimistic questions are the survival questions about today’s models. Questions like “How do we stop customers from moving to this new, more user-friendly technology-based experience?” or “How can we use our market strength to kill the spread of this new innovation?” We understand the need to be practical; sometimes you have to meet and outdo your competition where your buyers are today, not where they will be in a few years. But if you are optimistic about the possibility that the future can be even better than today, you will keep pushing out of the box you are in, even if it is a box that is currently serving you reasonably well.
Homeplus asked an optimistic question that focused on the future possibilities: “How do we help shoppers to buy our products differently?” A pessimistic question that kept them concentrating on the status quo would have been: “How can we keep shoppers coming into our stores and buying more from us in the model we know best?” Developing Piggly Wiggly’s new format was an optimistic position to take as well. It asked “what if” questions about shopping—“What if the cost of service could be lowered?” “What if customer satisfaction could be improved?” “What if these things happened through a different experience altogether?”—rather than asking, “How do I attract more customers to the same experience that my competition offers?” The answer to that inevitably would have led to a “lower prices” conclusion, leaving Saunders to slug out a commodity pricing strategy along with all the other grocers.
The GHX founding companies did the same. Instead of asking a more scarcity-driven question like “How do we protect our data and ourselves in the process?” the founding companies asked, “How can we avoid duplication and create a data exchange that doesn’t just reduce the cost to serve but also allows the industry to deliver even more value?” That same optimism is alive and well at GHX today as it forges ahead to solve the industry challenges present in implantables and pharmaceuticals, and as it works to create value in other markets, like those in European countries. There is a belief at GHX that they can make a difference, and that makes all the difference in how they define their edges of disruption.
Over and over, we saw optimism,