DISRUPTION: BEYOND THE MYTH
Javier García Iza
CEO
IOS OFFICES
In the fast-paced world of business, the word “disruption” has become a mantra, persistently chosen to describe constitutional shifts that redefine entire industries.
The theory of disruption states that disruptive innovations are those that create a new market or network value, and eventually displace established solutions or dominant technologies in that market. These disruptive innovations are often more accessible, convenient, or economical to a market of consumers who were not previously served by existing products or services. But truly, how many companies have succumbed to the force of this supposed disruption?
If we go back in time, we can find emblematic examples of disruption that have left an indelible mark in economic history. One that comes to mind is the rise of the automobile industry that in just five years, replaced transportation modes used for thousands of years, such as carriages, wagons, and horses, on the streets of New York with automobiles. This radical change in urban mobility is a classic example of disruption, where a new and superior technology completely eliminated the previous one.
Another precedent often cited as a paradigmatic case of disruption is the fall of Blockbuster and the rise of Netflix. Blockbuster's inability to adapt to changing market demands resulted in its bankruptcy, whereas Netflix's adept adaptation strategies transformed the company into a new, disruptive streaming technology that revolutionized the entire entertainment industry. In its early stages, Netflix's focus and competitive advantage was centered on providing a more convenient and flexible service, eliminating the inconveniences associated with DVD rentals and late return penalties, highlighting the significance of innovation and customer service.
On the other hand, the story of Kodak and its revolutionary invention of the digital camera is a key reminder of how past success does not guarantee future survival. Even though Kodak was at the forefront of digital technology, its dependence on the photographic film business ultimately anticipated its downfall. This is another example of how so-called disruption was not the defining factor in the decline of the company, but rather, critical decisions that led to the inability to adapt to an evolving market.
The main focus here is to recognize that disruption isn’t always the sole reason for the replacement or disappearance of an industry or company, keeping in mind that not all innovations are or should be disruptive. Disruption involves a significant change in the market and the way customer needs are met. However, in a business environment driven by technology, it can be difficult to distinguish between incremental changes and true social and economic innovations. Amazon, despite its powerful presence in e-commerce, has not eradicated traditional shopping centers. Likewise, Airbnb hasn't wiped out the hotel industry. These cases demonstrate that coexistence between old and new is possible, as long as companies are willing to adapt and evolve.
Regarding these examples, we could consider that disruption is not an inevitable evolutionary destiny, but a consequence of strategic business actions and decisions. Companies that want to avoid being victims of disruption, can focus on offering excellent service, constantly innovating and remaining agile and responsive to market changes, centered on a path of continuous improvement, incremental changes and creative ways to satisfy your market. Ultimately, the true key to business survival lies in the ability to adapt and the willingness to embrace change as an opportunity for growth and prosperity.
In this regard, I keep in mind examples of companies that were successful in adapting to changing and challenging times. One of them is Studebaker, which was a very successful wagon-making company founded in 1852 that took a turn and changed its production to motorized cars to stay afloat while the automobile industry was on the rise. In a similar way, Hermès, one of the oldest and most popular brands, had a market that focused on horses and wagons, and when motorized cars were invented, it had to pivot and adapt to a new market. Because of those efforts, today, more than 100 years later, it remains a very powerful brand.
At IOS OFFICES, we sought to evolve and change the connotation of the word “work.” Historically, work has been described as something done out of necessity, without desire and “by force.” We believe that it can be a recreational activity that should be done with pleasure and passion. As a company, we have reinvented ourselves many times, evolving into a better version of ourselves. We provide spaces with innovative interior design and integrated amenities; we have improved the service concept and customer service. We are focused on reinventing the workspace, always adapting our business model to the client’s needs, while being keenly aware of the market changes that affect us.
During the pandemic, we were put to the test, and our ability to innovate and adapt was what significantly mitigated the negative impact of the restriction of going to the workplace. With courage, proactivity and the priority of making sound strategic decisions, we avoided falling into difficult situations, such as those experienced by Blockbuster or Kodak.
For us at IOS OFFICES, disruption is not something to fear, but rather an opportunity to innovate and adapt to change.
Mexico Business News offers access to the most relevant information about different industries, including articles of important business leaders, amongst them, our CEO Javier García Iza, who shares his latest publication about disruption and how it changes markets.