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June 1, 1997

Disruptions

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No amount of planning or intelligence can predict everything.

A U.S. manufacturer was hoping to gain a competitive advantage by moving assembly of some of its products to the lower-labor-cost environment of East India. A week before production was set to begin, a monsoon wiped out the factory.
A leading jewelry manufacturer was feeling good about its position and adopted a more-of-the-same policy. But then the leaders were stunned when they started losing share to an upstart company that was marketing jewelry through new channels such as wine bars, sporting events, and college sororities.
A small independent film company invested its borrowed capital in a movie with a story topic no one had ever seen on the big screen before. Then they found out from Variety that a Hollywood company with far deeper pockets was coming out with a similar movie at almost the same time.
Disruptions.
They happen in all areas of life. They happen in business too, no matter how careful you are. If you think you can roll out your strategy without the unexpected sooner or later impinging on it, you’re not living in the real world.
Disruptions can be devastating or merely frustrating. They can be long lasting or temporary in their influence. They can come from inside or outside the organization. But one way or another, they will come.
You can be the smartest person alive, and have the best–thought-out strategy ever, but you’re still vulnerable to disruption. Why? Because you’re not in control of everything. None of us is. Here is a sampling of areas that regularly hand out I-didn’t-see-it-coming surprises:
• People’s health. What if the visionary founder starts showing signs of dementia?
• Macro economics and markets. Not even Warren Buffett has more than a minuscule influence over these. We can only react.
• Weather. It’s tough to be an outdoor wedding organizer in the middle of the rainiest June in decades.
• Accidents, production mistakes, and plain old bad luck. Pulping the entire print run of a book with a misspelled title on the cover is going to further slim an already anorexic profit margin.
• Competitors. This is a big one—and the main reason that disruption is becoming more and more common these days. There are others out there who are deliberately trying to alter the playing field under your feet. One article said, “Disruptive innovations are like missiles launched at your business.”4 And in fact, because there is so much innovation in the world today, a pervasive entrepreneurial spirit, and social media at our fingertips, the time lag to learn and try is practically nothing. Somebody else can disrupt your strategy, or at least a part of it, overnight.
Are you scared yet?
The solution to disruption is not to become fearful or fatalistic. You can, and should, keep planning. You can, and should, keep looking for ways to minimize risk. But at the same time, stay alert to what’s going on all around you. And make sure your strategy is flexible enough to allow you do some improvising when the unanticipated shows up at the door.
And remember, disruption is not all bad. If you’re smart enough, fast enough, and agile enough, maybe you can find a way to take the new reality that has been sprung on you and turn it to your advantage.

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