APPENDIX
DISRUPTION ASSESSMENT
ANSWERING THE QUESTIONS IN this assessment will help you to evaluate a company’s potential for disruption and the opportunities in its industry, and then to identify how the company could become more customer focused.
The assessment can be used for several different purposes. If you’re a start-up hoping to disrupt a market, it will reveal opportunities. If you’re a leader at an established company, it will help you to identify new, more effective strategies. If you’re looking for a job, it will help you to evaluate employers for their growth potential. Finally, if you’re an investor, it will help you to identify companies that could become market leaders.
Whatever your purpose in taking the assessment, the more sources you use to come up with and validate your answers, the more accurate your perspective on the company (here, called AnyCo) will be.
POTENTIAL FOR DISRUPTION
The best way to identify the potential for disruption is to evaluate how customer focused a company is.
1. What customer needs is AnyCo addressing? Not addressing?
2. How well do AnyCo’s products or services address customer needs?
What other ways could AnyCo meet customer needs?
How unique to each segment and market are AnyCo’s offerings?
What are customers complaining about?
How is AnyCo’s leadership addressing those complaints?
3. How effective is AnyCo in selling to both baby boomers and millennials?
How different are the needs of millennials from those of baby boomers, with regard to AnyCo’s products and services?
How successful is AnyCo in selling to millennials?
4. Were AnyCo’s innovations and technologies developed to meet specific customer needs or were they developed for technology’s sake?
How well do AnyCo’s innovation and technology strategies address customer needs?
What needs are not being addressed?
How could AnyCo meet these needs, with or without technology?
CURRENT BUSINESS STRATEGY EFFECTIVENESS
Once a company understands customer needs, it must deliver on them. Long-term business success depends on using the right strategies.
1. What are AnyCo’s current strategies? How customer focused are these strategies?
2. How are customers reacting to the strategies?
3. What does customer feedback/reaction reveal about long-term risks?
4. What benefits would more customer-focused strategies bring to AnyCo?
GROWTH FROM CURRENT CUSTOMERS
Getting existing customers to spend more and do it profitably is the holy grail of business. Any company that is good at this will be a winner.
1. How much more or less are AnyCo’s existing customers (or customer segments) spending now than they did a year ago? Two years ago?
If they are not spending more, why?
2. What programs is AnyCo using to get customers to spend more?
How effective are these programs in generating additional revenue?
3. What was the impact on margins for each of those programs?
What has been the trend in profitability?
What led to an increase or decrease in AnyCo’s profitability?
4. How quickly are competitors catching up with AnyCo’s strategies? What variations are they using to grow revenue from their existing customers?
AFFORDABLE PERSONALIZATION
As millennials become the dominant buying group from 2020 to 2025, demand for personalized products and services will increase. Companies that make personalization affordable will be the most successful, and the stickier those services are, the more successful they will be.
1. How adept is AnyCo at addressing customer needs rather than merely selling products or services?
2. How personalized are AnyCo’s products or services?
How well does AnyCo tailor its products or services to each customer?
How are the customers responding to AnyCo’s personalized services?
3. How affordable are AnyCo’s personalized offerings?
How well are AnyCo’s operations set up to deliver personalized offerings (tailored for each individual) rather than merely producing standard products or services?
What challenges does AnyCo face in changing its operations to make personalization affordable?
RESPONDING QUICKLY TO CUSTOMER NEEDS
We live in an era of instant gratification. Whether they’re buying a car or a custom-made suit, customers want it their way, now. And if you can’t deliver it fast enough, they’ll buy it from someone who can.
1. How quickly does AnyCo notice and respond to changing customer needs?
How effective is AnyCo in noticing a change in customer needs?
How long does AnyCo make customers wait before responding to changing needs? Why does it take so long?
What has been AnyCo customers’ reaction to the wait?
2. How long does AnyCo take to develop new products or services, bring them to market, and create effective service models?
How quickly can AnyCo develop new products or services and bring them to market?
How are customers reacting?
How well does AnyCo change the service model to respond to changing customer needs?
3. How quickly are other companies in AnyCo’s industry doing these things?
Are there other companies that are responding faster?
How are they able to respond to customer needs quickly?
What has been the reaction from customers?
BREAKTHROUGH QUALITY
More and more customers are reading peer reviews on Amazon and other sites before buying products or services. They’re looking at product performance, service, and quality issues, and they believe what their peers tell them, not companies’ claims or advertising. In this environment, all products and services are judged on their merit, according to how well they work for customers. Improving quality is a sure way of getting repeat business and attracting new customers with favorable reviews.
1. How do customers view the quality of AnyCo’s products and services?
How do customers review AnyCo’s products and services? How do these reviews compare with reviews of competitors’ products or services?
What aspects of AnyCo do customers rave or complain about on social media? How has AnyCo responded to this feedback?
2. How much importance does AnyCo’s leadership attach to quality?
Does AnyCo leadership view quality as a game changer or more of a placeholder?
How frequently does AnyCo leadership speak to customers and review customer quality feedback?
What strategies is AnyCo developing to achieve quality leadership with customers?
3. How hard do AnyCo’s internal organizations try to improve quality and delight customers?
Where does quality rank among strategies used by AnyCo?
What type of resources are devoted to a breakthrough in quality?
How involved in quality improvement programs are AnyCo’s customers and suppliers?
How does AnyCo incentivize its operations team? Do these incentives support quality improvements?
REINVENTION
You may be very successful today, but if you fail to reinvent yourself as customer needs change, you will fail. It’s hard to predict the future in anything, especially when it comes to customers who keep changing what they want. The only way to do it is to become skilled at creating strategies that support your customers’ needs—and then to keep updating those strategies. You can only do that if your whole organization is set up to identify and respond to customers’ needs as, and even before, they arise.
1. How does AnyCo plan to delight future customers?
How does AnyCo identify future customer needs? What roles do customers, suppliers, and outside stakeholders play in the process?
What strategies will help AnyCo meet future customer needs?
2. What organizational capability does AnyCo have to identify and respond to future needs?
How does AnyCo leadership empower its team? What has been the team’s feedback on empowerment? What are AnyCo’s plans for increasing empowerment?
How does AnyCo instill attention to detail throughout its organization? How do leadership and managers champion attention to detail and train staff?
IMPLEMENTING CUSTOMER-FOCUSED STRATEGIES
Not all strategies are appropriate for every company. Leaders have to select the one that best addresses their customers’ needs, then figure out how to get their organization to support and implement it.
1. What customer-focused strategies would be appropriate for AnyCo?
What are the customer needs from the industry? What needs should AnyCo focus on addressing? Why?
What customer strategies could help AnyCo address customer needs better? Why?
2. How will AnyCo implement these strategies?
How capable and willing are leaders when it comes to implementing new strategies? What incentives are required to align leadership with the new strategies?
How should the organization be structured and what type of culture is needed for the future? What employee development programs required reorienting the organization?