Meeting The Challenge of Disruptive Change

Nice To Meet You!

Meeting the Challenge of Disruptive Change is the 1st article in The Essentials Series.  Written by Clayton M. Christensen and Michael Overdorf, this article highlights the many trappings of disruptive change in companies.  The central argument centers around how there’s rarely no lack of resources and talent to address disruptive change as much as there is a lack of habit for thinking about your company’s capabilities as carefully as you think about individual people’s capabilities within the company.  Their research suggests that 4 factors affect what an organization can and cannot do:

Resources, Processes, Values, and Team

  1. Resources: Does my organization have the right resources to support this Innovation?
  2. Processes: Does my organization have the right processes to innovate?
  3. Values: Does my organization have the values to innovate?
  4. Team: Finally, what team and structure will best support our innovation effort?

Fitting The Tool to the Task

Managers need to determine how to measure their organization’s existing processes. Most often we fall into the trappings of putting together a Cross-Functional Team and calling it a day.  Almost every resume highlights a manager’s ability to manage cross-functional teams to impressive quantifiable results. However, the manager must also consider the following also:

  • Does the project fit within the organization’s values?
  • Does the project fit within the organization’s processes?
  • Have I assembled the right team?
  • Does the team have the necessary resources?

We can fall prey to the assumption that assembling the right team and assigning the right resources to the project is the silver bullet. Unfortunately, this comes at the expense of thinking how our organization’s values and processes can support the team.

Hipstamatic: The Instagram That Never Was; But, Tried To Be!

After winning Apple’s first ever “App of the Year” award in 2010 and collecting more than 4 million active users, it seemed like nothing could stop Hipstamatic.  Then, came Instagram. While Hipstamatic focused on photo editing, emergent competitor Instagram focused primarily on photo sharing on social media.  Hipstamatic blindly followed Instagram into the social ether and allowed integration with Facebook and even with Instagram itself; but, it was too late.  Hipstamatic built a paid app and trying to shoehorn social on top of that foundation was deflating within the company.

Sol Solet
Made With Hipstamatic

Digital’s Dilemma

The reason why Hipstamatic came to mind is the article presented Digital Equipment Corporation’s abrupt fall from grace. Like Hipstamatic, most people have concluded that Digital simply read the market wrong. But, if we look at Digital’s fate through the lens of our framework of Resources, Processes, Values, and Team a different picture emerges.

Digital was a successful maker of minicomputers from the 1960s through the 1980s. When personal computers first appeared in the market around 1980, Digital’s core capability was in building computers. But if that were the case, why did the company stumble?

Clearly, Digital had the resources to succeed in personal computers. Its engineers routinely designed computers that were far more sophisticated than PCs. The company had plenty of cash, a great brand, good technology, and so on. But it did not have the processes to succeed in the personal computer business.

PC makers, by contrast, outsourced most components from the best suppliers around the globe. The computers were manufactured in high-volume assembly lines and sold through retailers to consumers and businesses. None of these processes existed within Digital. In other words, although the people working at the company had the ability to design, build, and sell personal computers profitably, they were working in an organization that was incapable of doing so because its processes had been designed and had evolved to do other tasks well.

Digital could have created a different organization that would have honed the different processes and values required to succeed in PCs. But Digital’s mainstream organization simply was incapable of succeeding at the job.

Hipstamatic Revisited.

Hipstamatic went sideways when leadership steered the company away from creating photo editing applications to chasing social. On one side, founders chased venture capital and rushed through work on a series of half-baked products, while on the other side, newly hired employees struggled to build something they thought would last. The two groups had very disparate visions for Hipstamatic’s future.

Hipstamatic began developing a program called Timeline that would pull a user’s photos from various social networks (like Twitter, Tumblr and Facebook) into a single feed. In an interview with Fast Company, a former engineer recalled the moment after Hipstamatic Timeline was debuted in a companywide demo. “During the meeting everyone was like, ‘You know this is Instagram, right?’ It was voiced several times: ‘This sounds a lot like Instagram.'”

After Facebook bought Instagram, VCs perceived Hipstamatic as an Instagram copycat, and user downloads started to dwindle. In the most regrettable ways, Hipstamatic was, in fact, becoming Kodak. Like the once venerable brand, which failed to keep pace with industry changes during the 1990s, Hipstamatic struggled to adapt to the daily chaos and external pressures of the social app world.

Parting Thought

Meeting the Challenge of Disruptive Change article was originally published in the March-April 2000. Since then, Social Media has brought about disruptive change to so many companies with excellent products. The principle of knowing your company’s capabilities hold true today as much as it did in 2000 and before.

Managers at so many companies look around the room and see a bunch of social media users, assuming this equates to experience in social media. Everyone’s tweeting, posting, tagging, and assigning #hashtags along the way. I can see how this is easy to conclude that all this activity is valuable experience in social media that can be translated into pursuing ambitious and innovative projects. Very rarely do managers see the limits of their organization’s Resources, Processes, and Values as roadblocks to being successful in today’s social world. In Digital’s case, they should’ve honed the different processes and values required to succeed in PCs, while Hipstamatic needed hone the same processes and values to succeed in our new Social world.

Hipstamatic as a product is pretty awesome and I still use it to take my photos to the next level. Conversely, Instagram has a catalog of filters to jazz up your photos, but I never use those. Instagram filters are uninspiring and generic. With Hipstamatic, I manually change lenses, film, and flash to find the right blend to capture the moment. In short, Hipstamatic allows me to become a photographer. Furthermore, New York Times photographer Damon Winter used the application to create an award-winning photo for a cover story about the war in Afghanistan.