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Business Design School 004 — Self-Disruption

Published 7 months ago • 10 min read

Self-Disruption

Design Yourself Out of Business, Before Someone Else Does

Welcome back to Business Design School, a twice-monthly newsletter for the creative-business-curious. I call it a school because we’ll learn to master the art of business design, together.

In this issue: Designing yourself out of business by self-disrupting.

But first: Hi! This is issue four of Business Design School, and I wanted to do a pulse check. I brought this community together from some of the past contacts and connections I’ve made over the years, and some of you have found us through social media and word of mouth as well — I’m so glad you’re here! Now that you’ve had a full look at Business Design School over the last two months, if you’re game to stay and learn together, great; if you’d like to opt-out, that’s all good as well: there’s an unsubscribe link at the bottom of the email. In either case, thank you immensely for allowing me to grace your inbox with these ideas at the intersection of design and business — I appreciate you!


Self-Disruption

Design Yourself Out of Business, Before Someone Else Does

In the mid-00s (20 years ago!) I was part of the design team at Bose, working to launch, practice, and grow a new user research capability within the company. We grounded this new practice in a training program led by Cooper, a leading design and research consultancy that spun out a professional training company. The curriculum was based on the legendary Sue and Alan Cooper’s internal training program and transformed into high-quality professional development. Kim Goodwin and her team came to Bose and taught us the art of behavioral observation, interviewing, synthesis, persona building, and need statements. I loved every minute of it. Fresh out of design school, I was hungry to design things people wanted and that made their lives better. In school, my projects focused on how I, and I alone, thought things could be better. The Cooper approach had us talking to real people — users and future users of our products.

We visited hundreds of people for in-home interviews to better understand how they listen to music. I enjoyed interviewing people, learning about their needs, and observing them interact with their audio products. It supercharged my creativity and gave me more confidence as a designer. I felt less pressure to generate amazing, innovative ideas — I simply had to listen to people and synthesize their needs and ideas into something tangible, functional, and beautiful. I could do this all day.

While interviewing folks in their homes about how they listened to music, my colleagues Cory White, Sean Ryan, and I noticed something completely different. Users were struggling to fit the new Wave radio, Bose’s flagship product, into their lives as a bedside alarm clock — something they easily did with previous generations of the product. What happened?

True to form, Bose engineers made the acoustics of the new Wave radio sound so good — and I mean like home-theater good — that the company decided to launch the product with a new name: the Bose Wave Music System. They also decided to remove all the buttons from the device — it seemed odd at the time, but it fit the narrative. The Wave Music System was so good — room-filling, blow your mind good — that you’d want to position it further away from you (controllable by remote) to take advantage of the beautiful sound. The product launched and was/is a huge success.

We observed in the field that our customers were struggling to fit the product to one of their core needs: a bedside alarm clock. Folks had the larger system taking up their entire nightstand, and because there were no buttons, they’d place a table lamp and a box of tissues on top of the product. Oof. Or they complained that the system was too loud (imagine: it sounded too good!) to have so close to their head, so they placed it across the bedroom. But then they couldn’t see the time display and even worse when the alarm went off, they couldn’t find the remote to turn it off. In other cases, we found folks had two products in their bedroom: a Wave Music System on their dresser and a small alarm clock, like a Tivoli, next to their bed.

These interviews and observations gave us an idea. A small Bose alarm clock to better fit the need/use case and address part of the market that was struggling. Slam dunk, right? I thought we’d sell millions of them. One big problem: our little alarm clock idea, if launched, could risk cannibalizing Wave Music System sales. It was an early lesson for me that I’ve carried forward. Companies usually aren’t incentivized to kill their darlings.

The Business Lifecycle

Time has a way of eroding even the most successful, stable organizations. If you had told me when I was a kid in the 80s that Kodak would no longer be the leading company in cameras and photos and would be out of business, I wouldn’t have believed you. Even if you had told me that when I was a design intern at Kodak in 2002, I still wouldn’t have believed you.

Every business goes through some form of the business lifecycle. The Startup Stage begins with developing a business idea, such as creating a new product or service. This period is extremely challenging, with the pressure to figure out funding, sell, build a customer base, and establish a brand. You’ve heard the numbers: 9 out of 10 startups fail in the first few years. If you can make it to the Growth Stage, you’re cooking — the product(s) or service(s) are in the market and experiencing rapid expansion. Now, the focus is scaling operations, maintaining quality, and owning the market. In Maturity, the business has earned a well-established market presence — but long-term success is never guaranteed. Things can go sideways into Decline, and often do if you’re not proactive.

An engineer at Kodak named Steve Sasson invented the digital camera in 1975. However, the almost 100-year-old company filed for bankruptcy in 2012, citing the rise of digital cameras and cell phones. What happened? As Bill Lloyd, Kodak’s Chief Technology Officer, said in an interview with the New York Times, “It seems Kodak had developed antibodies against anything that might compete with film.”

Kodak had a brilliant razor-and-blades business model, selling us cameras for reasonably low prices, but then we needed to keep buying the consumable film. Kodak was not willing to sacrifice its sales of film cameras and film to make a real bet on digital cameras. They weren’t willing to eat their own lunch. Unwilling to self-disrupt, they entered the Decline Stage. They had every opportunity and every advantage, but they struggled to adapt to a technological disruption (that they invented), and the changing market conditions consumed them.

If you don’t eat your own lunch, someone else will.

Self-Disruption

Businesses can short-circuit the business lifecycle by self-disrupting. Self-disruption is the deliberate process by which an organization proactively reinvents itself — even when it’s at the peak of its success — to remain relevant and competitive in a rapidly changing environment. This strategic shift is not driven by external threats but by a profound understanding that complacency and resistance to change are more significant risks than the challenges posed by the status quo.

The benefits of self-disruption are multifaceted and profound. It allows companies to stay ahead of the curve, anticipating and responding to changing market dynamics rather than reacting defensively. Self-disruption fosters a culture of innovation, encouraging employees to think creatively and take calculated risks. It can even open new revenue streams and markets, ensuring long-term sustainability. Ultimately, self-disruption enhances a company’s ability to adapt and thrive in turbulent times.

When I was the Executive Director of Design Museum Boston, I liked to run a workshop with my team at each annual offsite, starting with a question: “How would we put ourselves out of business in 5-10 years?” At the 2018 offsite, I outlined the things that could happen that would likely impact our business: new competitors, new technology, terrorist attacks, a global pandemic (!), and more. Figuring out how we put ourselves out of business would do the opposite of what Bill Lloyd said about Kodak; we would build antibodies against complacency.

That 2018 workshop kicked off a rousing brainstorm. At the time, the museum relied on in-person exhibitions and events, and we were very focused on our two geographic locations, Boston and Portland, OR. Our dialogue generated a narrative about a business that was the Disney of design content with streaming video series about design, podcasts, news, articles, and more. In that scenario, we broke free of the physical/geographic bounds and created a design media company.

We generated a handful of self-disrupting ideas and even put a few of them in our long-term strategic plan — we’d get to them someday. Someday came sooner than we thought when the COVID-19 pandemic impacted every element of our lives and businesses. When COVID-19 hit — and all in-person gatherings came to a crashing halt — we pivoted quickly to a content-based business model with a podcast, virtual conferences, a print/digital magazine, and more. We could adapt very quickly because we had so many ideas to pull from and because we built a culture capable of self-disruption.

Embracing self-disruption is not a decision made lightly. It requires a deep understanding of the strategic aspects involved. At its core, self-disruption demands a willingness to challenge one’s own success, which can be challenging at an emotional level. Key factors include:

Risk Tolerance: Leaders must be willing to take calculated risks, acknowledging that not all disruptive initiatives will yield immediate returns.

Resilience: The ability to navigate uncertainty and setbacks is crucial. Self-disruption often entails failures and setbacks before achieving success.

Leadership Vision: Leaders play a pivotal role in fostering a culture that values change and innovation. They must articulate a compelling vision for the organization’s future.

Adaptability: Employees must be open to change and possess the skills to adapt to new roles and processes.

How to Self-Disrupt?

This process starts with building those antibodies (and culture) against complacency through challenging conversations about the future. I recommend collaboratively generating a Self-Disruption Strategy — starting with a collection of narratives describing the businesses you would design to knock your current business out. Bring your team together and start collectively responding to prompts such as these:

  • Imagine a scenario where your biggest asset becomes your biggest liability. What competitor business would you design to take advantage of this and win? A good (or bad) example is Blockbuster — at its peak in 2004, it had over 9,000 stores — a considerable asset when renting movies required borrowing a physical object. But when it didn’t… those stores became a major liability. Blockbuster had the chance to disrupt itself by buying Netflix in 2000 for a mere $50 million. Blockbuster declined. Now Netflix has a market capitalization of $176 billion, and Blockbuster is gone (except for a final location in Bend, Oregon, which is basically a museum to a bygone era).
  • Imagine the big one hits — what author Nassim Nicholas Taleb calls black swan events: unexpected events of large magnitude and consequence. Pick your black swan event: pandemic, natural disaster, economic collapse, and design a business that can withstand or push past it.
  • Pick a disruptive technology and apply it to your business model, market conditions, or customer expectations. What business would you design using this technology that would put your current company out of business? Think of artificial intelligence, blockchain, two-sided markets, augmented reality, etc.
  • Imagine the market gets flooded with copycats and other substitutes, and you rapidly lose market share. What business do you design using your current assets and know-how to bounce back and leapfrog the market? Cooper Professional Education, the company that came to Bose to teach us about user research, closed up shop in 2020. They were one of the first organizations to offer design professional education. They felt the impact of the pandemic and suffered market share loss from the flood of accessible design education across various channels and platforms.
  • What if your flagship product or service offering became irrelevant practically overnight? What business would you design that would meet different, emergent market needs? Remember Nokia?

These prompts can seem dire — the idea is to generate responses and ideas now before these things happen. These ideas become your self-disruption strategy. I recommend bringing humor and creativity to the exercise as much as possible. With this bank of ideas, you’ll be ready to pivot quickly — or — you could self-disrupt by launching some of your ideas using a fair share draw approach.

Fair share draw refers to allocating resources and investments within a company’s self-disruption strategy. It involves distributing financial and human resources to ensure each area of the organization receives an equitable portion of the resources needed for maintaining sales, innovation, and transformation. This approach ensures that no single department or project gets neglected, allowing the organization to maintain a balanced and comprehensive focus on self-disruption initiatives.

By allocating resources fairly, companies can maximize their chances of success in self-disruption while avoiding potential imbalances that could hinder the overall transformation process. Fair market share ensures your cash cow product or service is protected, while new self-disrupting ideas get some resources to test their appeal. Over time, perhaps old and new offerings even out. Or maybe that self-disrupting idea slowly but surely cannibalizes your original offering. Great! At least you ate your own lunch and will be around for your next meal.

I’d love to hear from you: does this resonate? What business would you design to put your current company out of business? You can simply reply to this email.

If you enjoyed this issue of Business Design School, please share the love on LinkedIn or forward this email to folks you think might enjoy it as well.

Have a great week! Talk soon!

— Sam

PS: The Kickstarter campaign to fund the launch of my new book, Adventures in Disruption, kicks off next week — stay tuned for a big announcement and a video! I’d greatly appreciate your support. Leading up to next week, you can support now by pre-pledging here to support the campaign and get your copy. Thank you!

Sam Aquillano is a business designer and writer. In 2009 he founded Design Museum Everywhere, an online, nomadic museum with the mission to bring the transformative power of design everywhere. His upcoming book, Adventures in Disruption: How to Start, Survive, and Succeed as a Creative Entrepreneur, chronicles his team’s startup journey and is available for pre-order, launching in October 2023. He's now a Design Director leading business design at Edward Jones. Sam has earned numerous awards for his work, including the Red Dot Design Award, Graphic Design USA’s Responsible Designers to Watch, and Fatherly named him one of the Coolest Dads in America.

samaquillano.com

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Business Design School

Sam Aquillano

A twice-monthly newsletter for the creative-business-curious. I call it a school because we’ll learn to master the art of business design together. We’ll explore creative entrepreneurship and leadership, how to design things like culture and operations, and consider ways to accelerate business success and impact by design.Sam Aquillano is a business designer and writer. In 2009 he founded Design Museum Everywhere, an online, nomadic museum with the mission to bring the transformative power of design everywhere. His new book, Adventures in Disruption: How to Start, Survive, and Succeed as a Creative Entrepreneur, chronicles his team’s startup journey and is available on Amazon, Bookshop, Barnes & Noble, Apple Books and more. samaquillano.com

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