Growth through acquisition will always underestimate the need for innovation, and participants will determine that growth by acquiring more of the past is time based, and never leads to the future.
Over the last decade, most that pay attention to disruptions and the fallouts they cause will recognize a commonality. That commonality is: organizations of dying industries or deliverables believe acquisitions, over innovation, will save them. The fact is, acquisitions made during a market shift are merely a false sense of growth, what I call delusional growth. When organizations spend money on the past without a clear directive of bringing the future to it, they pay a heavy tax for being stubborn and misunderstanding the relevance.
Disruption starts when users of current technologies can visualize future technologies. This happens when what currently exists around the means of delivery begins to change. Think of Blockbuster; they were the biggest video rental store in the world. They wiped out the status quo competition through acquisitions.
Where they failed was not innovating. They kept bringing the past to the future, instead of bringing the future to the present. They suffered from “Delusional Growth; buying your competitors during market shifts, believing this increase in market share is sustainable without innovation.”
Most of us would relish in the opportunity to go back in time and sit in the boardroom of Blockbuster and fight for their future, when they decided that acquisitions were the way to growth rather than innovation. We’d explain to them the word ‘digital’ is not heretical. We’d explain to the tired status quo leaders, who thought their market share size made them indestructible, exactly how foolish that thinking is; we’d tell them that those innovators’ imaginations should not be underestimated, simply because those tired leaders lack in their own imagination.
We’d explain to these past leaders how their vast brick and mortar footprint would soon become useless in delivering what their customers wanted. We’d tell them competition in the future will come from places only those with imagination will truly comprehend.
However, the best meeting to attend with Blockbuster would be the one where Netflix was first mentioned. I can very clearly imagine the dismissive tone of the stubborn leaders whose lack of imagination fuels their arrogance to status quo.
Organizations of disrupted industries rarely say, ‘I wish I saw that coming’; sadly, they end up saying, ‘why did we ignore the signs of innovations all around us, and why did we believe our customers cared more about us then what they wanted?’ Those who fight this never win. Customers want a result - the means in getting that result will always change and has always changed.
No one has a crystal ball – however, everyone has the ability to think of a better way. Those who cannot think past what they do today will never have the capacity to think why it should be better and how to make it better tomorrow. Organizations who become too stubborn will find themselves trapped behind the door to the future.
The question to ask yourself is this: will, one day, someone wonder why or how your stubbornness affected you or your organization? Will the ghost wandering the empty space of a successful past business be saying, why did we ignore the signs?
So, welcome the challenges of innovation and do not fear the direction innovation may take you. Today, leaders must not only welcome challenges to their thinking, they must seek it out.