--THIS MONTH'S TOPIC: CREATIVE DESTRUCTION--
IN THIS ISSUE:
- New concepts you can immediately apply
to your business
Read on and decide if this sample newsletter
and free training gift provide value. If so, then let me know
if you’d like to join our mailing list on an ongoing basis.
Some of you may be feeling some negative thoughts around this
term. Believe me-I certainly did when I first heard it! Before
you write this off as some newfangled management prose, let
me share the history of creative destruction, and how it helped
me personally.Over 70 years ago, the "perennial gale of
creative destruction" was a phrase coined by economist
Joseph Schumpeter. Creative destruction is intended to deliberately
destroy and replace perfectly good revenue streams with income
from new or newly reinvented products and services within today's
less hierarchical information economy.
Instead of just waiting for competition, an edict from the Board,
price erosion, or other market pressures, creative destruction
forces innovation from the very top, thus acting as a catalyst
for research and experimentation. This automatically challenges
a leadership team to continually drive the marketplace,
instead of reacting to it. Authors Foster and Kaplan
propose that corporations can outperform capital markets and
maintain their leadership positions only if they creatively
and continuously reconstruct themselves-and have studied over
1,000 corporations to support their argument.
Why should I care about “creative destruction”?
In my experience, I found that the principles work. When I launched
my coaching practice 4 months ago, I expected my 19 years of
business experience, planning, and my "graduate degree"
in sales methodologies to make me successful. What actually
happened was that they worked against me. These were
historically my aces in the hole, my rock solid selling methods...what
went wrong?
Thanks to the support of my coach, Greg Clowminzer, I discovered
the reasons why my old communications and selling tools no longer
served me. I finally decided to temporarily put my old selling
approaches on the shelf, and to make room for a whole new way
of attracting clients. That process was called the Enrollment
Process. What started as an experiment soon allowed me to rapidly
expand my coaching practice and attract many great clients in
a short period of time!
I used the enrollment process a few more times and, within months,
I had "destroyed" some of my old models for influencing
and supporting others.
What are the benefits in larger companies?
General Electric sets an internal target of 50% of revenue from
products and services which are less than 5 years old. This
puts managers in much closer touch with current customers and
the marketplace in order to come up with new ideas ahead of
their competitors. This results in a driven culture of creativity
and innovation instead of a culture that is complacent with
the cash cows and the status quo.
According to authors Richard Nolan and David Croson, other large
companies such as ADP, AT&T, FedEx, GE, General Mills, Intel,
Microsoft, Motorola, Morgan Stanley, and PepsiCo have successfully
completed "The Six Stages of Creative Destruction",
transforming themselves to become viable information economy
competitors.
Entrepreneurs (and you know who you are!) constantly
engage in a process of creative destruction. They challenge
and dismantle the old order of economic activity (technological,
cultural, organizational, and managerial) and simultaneously
invent and build a new one. One of my entrepreneurial clients
has completely turned the perception of financial services professionals
upside down-and succeeded.
How can I use Creative Destruction in my business?
The next time you hear your teams talking about how well their
current revenue streams/products are selling, or how "this
new tool will never work," introduce the concept of creative
destruction to them. Challenge them to keep inventing new
business partnerships, products and services, even though
they clearly don't have to. Some key questions to explore
are:
-
As a leader, what percentage
of my time am I personally taking risks and experimenting
with new models? If it is less than 10-20%, why? How
will I give others the confidence to apply “creative
destruction” without modeling it myself?
-
To what degree have we
started to feel like we’ve gotten too comfortable
with our current product mix and business models?
-
How many of our clients
want more from us-but have to go elsewhere to get it?
-
How many of our competitors
are using the exact same approaches, tools, and models
as we are? How long can we sustain our “edge?”
-
What can we do as a
leadership team to create and reward networks of independent
thinkers held together by the need to innovate?
Resources I've listed below are great
guidebooks to help you formally implement creative destruction
principles in your company.
How do I learn more about Creative Destruction?
Here are some resources for you (with special thanks to Thomas
Leonard, President of CoachVille for his efforts):
- Creative Destruction: Why Companies That
Are Built to Last Underperform the Market--And How to Successfully
Transform Them -- by Richard Foster, Sarah Kaplan; Hardcover
- Creative Destruction : Business Survival
Strategies in the Global Internet Economy -- by Lee W. McKnight
- Creative Destruction: A Six-Stage Process
for Transforming the Organization -- Richard L. Nolan, David
C. Croson (Contributor to this article)
- The Innovator's Dilemma: The Revolutionary
National Bestseller That Changed The Way We Do Business--
by Clayton M. Christensen
--Lisa Nirell
http://www.energizegrowth.com/ |
