BrazilInnovation is the secret to staying ahead of digital disruption
Steve Jobs’ timeless advice to ‘stay hungry, stay foolish’ has been given a consulting twist by the growth hackers at Dutch consultancy RevelX. The firm advises clients to stay on their toes and exploit disruption by embracing innovation and an entrepreneurial mindset.
Disruption is the great unknown driver of the business world and is set to accelerate at an unparalleled pace as technological evolution marches on. For some organisations, disruption in their industry is a catastrophe to be averted, for others it is a golden opportunity to reinvent themselves, develop new capabilities, and get an edge on their competition.
For RevelX Partner Matthijs Rosman, disruption is a practical phenomenon. The ten year veteran of Boer & Croon who joined RevelX in 2015 says that, at its core, disruption is when “new players fundamentally change the rules of the market”.
“Either a whole new market is created, or there is a market in which the more traditional players are suddenly confronted with new players doing things differently. In contrast to common beliefs, these players do not always have to be startups”. Rosman argues that, in order to disrupt an industry to their advantage, a firm doesn’t need to introduce radical new technology. What they need is a radical mindset. As long as you are better at understanding your customer, he says, disruption should come naturally.
He cites the impact of insurance industry disruptor Lemonade which uses digital and AI technology to pay out claims within three minutes. The technology exists. What made Lemonade different was its understanding that insurance customers would prioritise fast payouts, the creation of a new system, and the courage to implement it.
“Many large companies think ‘we have existed for 100 years, so we will stay in business for the next 100 years,’ which ignores the impact of the outside world,” he points out. Another problem is CEOs who know that they need to change things up, but “lack the skills, experience and confidence” to kickstart innovation processes internally.
Strategy for disruption
So how should a CEO who is looking out the window and seeing a tidal wave of disruption coming their way react? Fellow Partner at RevelX, Jeroen van der Vlugt, has a four point strategy for leaders who wish to embrace disruption but don’t know how.
The first port of call is to explore the market. Key questions, says van der Vlugt, are “is there a new player taking all the most profitable action?”, “Is customer behaviour changing?”, and “Are technological or regulatory changes affecting the market and customer behaviour?”
Step two is forming a cross-functional innovation team, which van der Vlugt defines as “a group of people with different functional expertise working toward a common goal.” This will encourage different perspectives, new ideas, and allow for the possibility of innovation across every part of the company.
The third step is to embrace the constant feedback loop, says van der Vlugt. Businesses should leverage data analytics to derive insights from customer behaviour. These might include matching particular demographics to certain products, or finding out what time of day the product is bought most frequently.
The final stage to establishing a firm’s disruptive credentials is building a Minimum Viable Product (MVP). This allows the business to get its product out there in the public eye, sell it, make a name for it, but maintain enough flexibility to make substantial changes based on customer feedback.
“CEOs who want to unleash growth hacking in their own organisations should start with their own mindset. They have to liberate themselves from the corporate straitjacket and get into the entrepreneurial mode.”
Wizard of Oz
MVPs are a big part of the innovation philosophy of another RevelX Partner, Noud van Alem. He believes that an obsession with product development is holding organisations back from developing their innovative potential. An MVP is sufficient, he says, to get the process up and running, rather than being bogged down in expensive details when customer feedback might call for huge changes anyway.
The former Google and Uber managing director is famous in the consulting game for coining the ‘Wizard of Oz method’. This is a metaphor for the MVP, which might appear like a new and amazing product to the outside eye, but behind the scenes there is no huge production facility, or army of assembly robots. Instead the MVP is still largely an idea, being run out of a small and innovative department that is constantly testing new approaches.
Like every Partner in the management consulting firm, van Alem is an advocate of ‘growth hacking’, which he describes as “primarily a mindset”. “It is not thinking in terms of long campaigns or of buying expensive advertisement spaces. It is the desire to constantly improve and discover where the opportunities for growth are. Two key ingredients are entrepreneurial thinking and the studying of data. The antithesis of growth hacking is the attitude, ‘We’re doing fine, so why bother?’”
CEOs who want to unleash growth hacking in their own organisations should start with their own mindset, he argues. “First, they have to get back into the start-up mode. They have to liberate themselves from the corporate straitjacket and get into the entrepreneurial mode.”
“Secondly, they have to be really dedicated to starting growth hacking, meaning, they have to free up people and other resources in their organisation. That is why it is so important that the entire C-level supports the project.”
Growth hacking isn’t just an expression RevelX throw at clients. The consulting firm – founded in 2014 – uses it to further its own quick evolution. It appears to be working. RevelX already has more than 30 satisfied clients who were able to get ahead of disruption by following the firm’s innovation strategies. Success has also been seen at the bottom line, with RevelX clocking year-on-year growth surpassing 25%.
