When Deloitte published their Patterns of Disruption, it was framed as a way for established companies to anticipate new entrants disrupting their respective industry through new, innovative approaches. The patterns of disruption can also serve as a guide for internal transformation when applied to the existing business strategy and business model. Competitive advantage, increased customer value, and reduced operational costs are the benefit of transforming the business strategy and business models before someone can disrupt the industry.
The Nine Patterns of Disruption
The Nine Patterns of Disruption function as spotlights of where to begin looking, externally for disruptive startups and internally for opportunities to transform. The Nine Patterns of Disruption are:
- Expand Marketplace Reach: Connecting fragmented buyers and sellers
- Unlock Adjacent Assets: Cultivating opportunities on the edge
- Turn Products into Platforms: Providing a foundation for others to build on
- Connect Peers: Fostering direct, peer-to-peer connections
- Distribute Product Development: Mobilizing many to create one
- Unbundle Products & Services: Giving you just what you want, nothing more
- Shorten the Value Chain: Transforming fewer inputs into greater value outputs
- Align Price with Use: Reducing upfront barriers to use
- Converge Products: 1 + 1 > 2
At first glance, attempting to leverage the Nine Patterns of Disruption to transform a business strategy and business model may seem overwhelming with nine possible patterns to choose from. In some cases, a multi-prong approach may even be warranted. Fortunately, the Patterns do not exist within a vacuum.
Along with the Nine Patterns of Disruption, consider current and forecasted market conditions and change catalysts in the broader environment. They present current perspective and insight into where trends are heading.
Representative Market Conditions include:
- Product Characteristics
- Demand Characteristics
- Industry Structure
Broader Environmental Catalysts include:
- Enabling Technology
- Consumer Mindset
- The Economy
- Public Policies
The interaction of Disruption Patterns, Market Conditions and Catalysts provide a framework within to begin reviewing, adjusting and transforming a business strategy and/or the business model. It is through identifying the current catalysts and market conditions that allow for focusing on a few Patterns of Disruption. They are guides as to which of the Patterns to focus on. There may be one or two that stand out as the most interesting or advantageous to explore, based on what has been identified in Market Conditions and Catalysts.
The Pattern of Disruption offers a discussion starting point to ask questions about the current strategy and business model. Challenge the status quo and any existing assumptions about the industry (see Business Model Innovation in 4 Steps). Keep in mind, the goal of the exercise is to find ways to change the business, to get a competitive advantage, increase customer value, and reduce internal costs. In addition, look for external threats (Hello, SWOT Analysis) when reviewing the Patterns for internal opportunities.
The Patterns of Disruption, initially presented as a tool to anticipate new competition and reaction, can also be utilized to become the disruptor by simply shifting perspective internally and leveraging a few tools. The transformation and alignment of business strategy and business model is the first stage in building an innovative and competitive organization.