‘Exploiting Chaos’ - Post2Post Virtual Book Tour
I’m participating in the Post2Post Virtual Book Tour for Exploiting Chaos: 150 Ways To Spark Innovation During Times of Change by Jeremy Gutsche. You can read the previous review and interviews of the book here. Exploiting Chaos covers some of the same ground as Scott Anthony’s Silver Lining, specifically the idea that chaotic times breed innovation. Jeremy Gutsche graciously answered these questions by email:
Q: I was interested in your take on the pattern of disruption. What do you think is the one most important thing managers can do to spot potential disruption and innovate an approach to it?
A: The most important thing is to avoid being dismissive of radical business models and smaller entrants. In almost every example of big companies getting toppled, the little guy didn’t stand up and start fighting on day 1… New entrants creep up the value chain by offering innovative products and services to customers that incumbents typically ignore. They build strong customer insight and maverick brands. They slowly get stronger until the day they make a big alliance that enables them to compete at a higher level and topple the bigger incumbents and their outdated business models.
There’s an urban legend about boiling a frog that suggest if you drop a frog into a pot of boiling water, he’ll hop out right away. In contrast, if you drop a frog into lukewarm water and crank up the heat, he’ll be boiled alive. Like us, the frog is more sensitive to shocking change. We need to find a way to take the smaller entrants more seriously, and decide whether or not these are companies are in areas where we should be competing, or acquiring smaller brands that we can foster (while letting them have the space they need to grow). Don’t expect to be shocked. Find a way to experiment with new ideas and blossoming new entrants.
Q: Is that different from the one most important thing a small company can do to spot potential disruption and take advantage of it?
A: If big companies need to act small, small companies need to act big. Especially in times of chaos. Disney, Microsoft, Hyatt, GE, Apple, Sun, and HP were all founded during times of economic depression. The reason why is that people still buy things, but they become more conscious of what they need and why. They experiment with new things. Consumer needs evolve. Fortunately for small companies, larger incumbents are typically too slow-moving to detect these changes and act upon them. They focus on their core business and attempt to preserve profit margins. By moving quickly, small companies can identify disruptive opportunities and experiment with the business models that exploit that satisfy evolving consumer needs.
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