Creating Positive Disruption
I don’t listen to Radiohead. In fact, other than knowing of them by name, they were never on my radar...until now.
In case you don’t know who they are (which, of course, would make me feel much better) Radiohead is a rock band that has just rocked the financial foundations of how the music business does business.
Radiohead is offering their new album, Rainbows, online only at a price to be determined by the purchasers. The only mandatory fee is 45 pence (UK) for the credit card handling charge.
That’s it. 45p. If you don’t want to pay a penny more, no problem. If you think their music is great and want to pay them at anything from the discount to full price of a CD, that’s great too.
It’s being referred to as an “honor” system.
No, it’s not. What it is is one of the most brilliant marketing moves and examples of what I refer to as “positive disruption” I’ve seen in a long, long time.
Techie types love to talk about “disruptive technologies.” It’s all part of their ‘we’re changing the world’ mindset.
Now, to give them their due, the techie Brainiacs do change the world – and have done for years. While the new breed – particularly since the dot com days of the 1990s – are more than happy to tell everyone about all the changes they’re making to improve everyone’s lives, techies have been doing exactly that for centuries.
In the communications field alone, we can go back to the impact of the printing press. In the last century, when innovation sped up, typewriters moved from manual to electric, carbon paper became photocopy machines and mainframes opened the door for desktop then laptop computers. We moved from answering machines to voicemail to email and now visual voicemail on the smartphones we carry in our pockets and use to connect to the world every minute of every day.
Those are disruptive technologies. They measurably change the way we live and the way we see and operate in our world. And for those who create them, they also create untold riches for themselves and the visionaries who see the potential and get in from the beginning.
The question is, if you’re not a techie (or even if you are) and you don’t create a new disruptive technology, does that mean you’re out of the game?
Absolutely not. In fact, if anything, you’ve got a wider playing field than the ones who are trying to change the world.
Let’s go back to Radiohead for a moment.
Rock bands don’t make the big bucks from album sales anymore. Their money comes from tours – by the tens and hundreds of millions.
Albums are a means to an end. They’re a marketing tool. New songs come out and are played on the radio – digital, satellite and internet. You can buy or download the album – whether song by song or as a whole. It’s promoted by the record company for just that reason – because that’s where the record companies make their money. Not from the tours. From the albums.
But for the groups, the money rolls in from the excitement generated from seeing the band you love in person not only performing their new songs but their old ones as well. Why do you think groups like Police and The Who and the Rolling Stones, for goodness sake, are all on the road? They’re not making their big money from album sales anymore. That’s as good as gone and forgotten. Now the opportunity comes from personal appearances.
Radiohead, which just happened to have finished its contract with EMI, knew where their income was coming from and did exactly the right thing. They made an album and put the word out that it was available exclusively for download from the internet at a price of 45p – or more, but only if you so chose.
If you’re a Radiohead fan, this is practically nirvana – especially if money is a little tight these days. If your kid is a fan – whether you like the band or not – you can become your child’s newest hero. If you’re curious to see what all the excitement is about, it’s there and it’s cheap. You couldn’t ask for more.
Radiohead will undoubtedly make up more than its production costs on the album with the sales they generate. People will pay varying amounts of money, whether from value perception or guilt – but that’s not the real win.
The win is that they have used existing technologies – most particularly the internet – to expand and create new markets. When they do their next tour, not only will they have greater name recognition worldwide than ever before (and from what I understand, it was already pretty legion), they’ll have whole new audiences for their concerts. Ticket sales will be greater and they will be able to command even higher prices.
All for 45p.
And that’s what constitutes a “positive disruption.” It’s the adoption and use of existing technologies and capabilities (ah, there’s the human factor) to create new opportunities than ever pursued before. It’s a different form of innovation because it’s based on building on what’s best from every industry and sector – not just what is known or in play by your organization or others in your industry.
How do you think Amazon.com got started? This is what Jeff Bezos did. He saw a technology (again, the internet) and knew that somehow it could be used differently than the way it was commonly being used. It could be used to sell things.
He didn’t write the software code. He didn’t have to. He wasn’t creating a new, disruptive technology. He was using the existing disruption positively to create something more and different from what already existed.
In doing so, he created a new world of retail opportunities. In doing that, he created new worlds and opportunities across organizations and sectors – because once it existed, others saw the possibilities too.
Or, take the iPod. Since its initial release and growth in the market, teachers and administrators at every educational level started viewing the technology as Public Enemy Number One. Students were listening to songs when they should be listening to their teachers. iPods were the scourge of the classroom. So, as would be expected, school districts across the United States systematically outlawed their use on campus. Teachers and administrators in elementary, middle and high schools took them away from students and returned them only to parents – with that little homily about inappropriate purchases (which include cell phones, DVD players and more) leading to inappropriate classroom behavior.
Fast forward a bit. Suddenly it occurred to various school districts – in some cases, the same ones that had made such a case about iPod inappropriateness – that if the kids liked them, maybe there was a way to use them as part of the classroom curriculum.
Hey! There’s an idea! Use the same technology that the children already enjoy to improve their learning experience!
Now, school districts are popping headsets over the students’ ears to help them learn everything from foreign languages to science. Duke University is currently using iPods for course materials in over ninety of their classes. YouTube has become part of curriculum offerings. Social networking sites are being used to keep students informed about everything from their homework assignments and upcoming tests to their study groups’ activities.
It’s all positive disruption.
Now I’ll bet you’re sitting there reading this and wondering why I’m going on so much about so many things that are practically no-brainers. They’re just common sense. The next logical step. What’s the big deal?
The fact that you ask the question is one of the hallmarks of positive disruption. It seems so abundantly clear – so easy and straightforward – that no one is surprised by it. The technology exists and these guys are just taking advantage of it.
Surprisingly, this really is a big deal. Because, unfortunately, organizations tend to unconsciously spend their time in the past – because it’s the way we’ve always done it. Because it’s been successful up until now (even when it hasn’t). Because that’s not how we define ourselves. Because we can’t do that here. It just wouldn’t work.
Yes, it would. Take my word for it. Better yet, take Radiohead’s – and EMI’s.
Probably the clearest sign of the success – and danger – of Radiohead’s disruption came from Guy Hands, the new owner of their former label, EMI.
In an email to staff he described Radiohead’s move as “a wake-up call which we should all welcome and respond to with creativity and energy....The recorded music industry...has for too long been dependent on how many CDs can be sold. Rather than embracing digitalization and the opportunities it brings for promotion of product and distribution through multiple channels, the industry has stuck its head in the sand.”
And that’s what it’s time for you to do in your organization. Get your heads out of the proverbial sand. Only you’re not just embracing digitalization. You’re embracing every opportunity that every technology – and more – has to offer.
You need to corral all the thinking talents of everyone across your enterprise to identify ways that the organization can use what already exists – within and elsewhere – to improve upon all the things you do.
This is beyond your standard organizational improvement initiative. This is a combination of R&D, employee involvement, innovation systems, suggestion programs, quality, and every other marketing, improvement or expansion initiative you’ve ever implemented (or even considered).
This is a management system at every level for consistently asking – and getting answers to – what’s next and how do we do it now? What are we missing? What are others doing? How can we surprise ourselves – and our customers – by providing them with something that makes perfect sense yet gives us the competitive advantage?
And how do we do it at little or no cost to ourselves?
You start with: What’s changed? How are you living your life differently than you were last week? Last year? Five years ago? How can we build on those changes to create new customer experiences that will resonate in a way that creates new markets and new opportunities for us?
This is strategic planning in reverse. It is looking for – and finding – those opportunities that are sitting waiting to be discovered that are in your face every day. And it’s personal. You can only find the answers to these questions by looking at how life is changing around you – and how you’re making the best of it. Then, you extend that to make everyone’s lives better – at least when they’re dealing with your organization.
You don’t have to be the ones to create the new technologies. Best of breed organizations and their executives figure out how to get more, different and better value out of what is. R&D takes on a different scale and tone for those organizations that make or break not by changing the world, but by making it consistently better on all fronts.
Let the techies create their disruptive technologies. In fact, the more the better.
Because, like Radiohead, you’ll create new ways to win and new definitions of winning. You’ll be generating new revenues, markets and opportunities building on someone else’s work – and simultaneously paying them the compliment of showing them how what they did changed your and your customers’ lives.
Then all of you will have changed the world.
See you next month.
Leslie.
