4 Steps to Navigating Business Disruption

Navigating Disruption December 22, 2017 By: Jeff Mansfield

To clearly spot disruptive forces, association leaders must learn to identify threats that could put their business model at risk. Here are tactics to help get a clearer view of the unknown future.

Nearly 15 years ago, a small company with a passion for innovation was started with a simple goal: to connect professionals and improve the way people found jobs.

That company was LinkedIn. In 2003, few people realized that this social networking platform would become a threat to professional associations. But it has attracted more than 400 million users and evolved from social networking to business- and employment-oriented networking.

In 2003, the world was just beginning to understand the speed at which technology-driven and internet-driven businesses could grow. Now, it feels as if new threats arrive every week that have the potential to be the next LinkedIn. 

Business-model disruptions affecting associations rarely start on a linear path. This is one factor that makes them so frustrating—they can be hard to see on the horizon, and associations are often caught off-guard as they approach. More important, when a threat is identified, organizations are often slow to address it and are quickly overrun.

To survive, organizations will need to develop a greater capacity to anticipate trends that may put their business model at risk. Here are four steps that associations can take to stay ahead of threats:

1. Talk about disruption year-round. The first and most important change must come from leadership. It is easy to ignore disruption or potential threats by focusing on positive signs, like membership growth. But smart organizations conduct specific meetings to discuss business-model threats, and good leaders maintain ongoing conversations about disruption. These discussions may include:

  • new potential threats: semi-annual discussions of potential threats that often conclude with prioritization
  • threat tracking: quarterly assessments of the success of potential threats affecting the organization’s business model
  • solution tracking: quarterly meetings designed to update leadership on potential solutions.
Smart organizations conduct specific meetings to discuss business-model threats, and good leaders maintain ongoing conversations about disruption.

2. Develop monitoring programs to track disruptions. Not every threat will be a business-ending event. Some threats will die off and others will change. Monitoring them is key to prompting a response when one is needed. Many businesses are developing internal capabilities or leveraging external experts to monitor and track threats, including:

  • changes in capability or technology advancements
  • mergers and acquisitions that can accelerate a threat
  • competitive hiring practices
  • customer growth rates
  • declining membership or customer numbers.

Regular monitoring and reporting on these types of threats will help leaders to prioritize and respond.

3. Practice “war games” to assess major threats. If a major disruptor is on the horizon and dramatic action is needed, organizations can execute a business “war game” scenario assessment to understand how a strategy change could affect the landscape and members or customers. 

War gaming allows participants to better understand a threat and how new or existing value propositions might stand up in the market. These scenario-based exercises can also instigate brainstorming on how to respond or identify other decisions that might be needed to adapt the business model.

4. Develop a strategy that carries risk. This is one of the most difficult steps to take. For associations, examples might include offering membership with no fees, discontinuing national conferences, emphasizing regional events, or developing a certification. Each business model involves risk but, if executed correctly, can deliver huge rewards.

When facing a clear and dramatic threat, doing what you’ve always done simply won’t work. In fact, technology innovation as a disruptive force often affects mature business models the most. Just think of taxis (Uber/Lyft), retailers (Amazon/Alibaba), and hotel operators (Airbnb/HomeAway) today.

To overcome a disruptive threat, risk is inevitable, and embracing risk is often the most challenging decision leaders must make. But with the right insight, data, and strategy in mind, the risk can become the reward—and the disrupted, the disruptor.

Jeff Mansfield

Jeff Mansfield is senior vice president at Proactive Worldwide in Schaumburg, Illinois.