DISRUPT OR BE DISRUPTED

PART 2: Survival Strategies for New School Industry Investors

By Jaime Alfredo Cabrera, Albukhary International University, 2014

Image courtesy of egyptmanchester.wordpress.com

Disruptive Strategies Big-bang Academic Disruptions Constant Big-bang Disruption Failure Finance Funding

Disruption Survival Strategies

Use Truthtellers Ride the Rapids Use Perfect Data Ditch Conven tions Collar Your Risks Recycle Restart Relaunch

Use an Integrated Multi-business Model

Big Academic Disruption Strategy

Successful Big Academic Disruptors can leave the market as rapidly as they enter it. Instead of a gradual decline as markets mature, the crash can come quickly. Clients will have become accustomed to astonishing products and are always ready for the next better-on-all-dimensions innovation. As industries fade, a lone survivor serving a market for nostalgic customers may yet find a profitable niche. However, that market may be no more than a shadow of the original.
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Constant Big Disruption Strategy

Constant Big-bang Disruptors know that pursuing all three strategic disciplines at once (the lowest-cost producer, the innovation leader, the most customer-intimate), and all the time, is the way to survive. They must nurture and support thoroughly undisciplined in-house creative thinkers to come up with new disruptors, as well as thoroughly disciplined staff to sustain established innovations and continuously nurture their existing markets. Both groups should enjoy rewards directly tied to successful job performance.
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Failure Finance Funding Strategy

Innovation pioneers look for lower-quality substitutes that enter mainstream markets first by picking off a companys worst customers and then by moving up to become competitive. An in-house skunk-works for projects that can succeed or fail should receive steady funding to continue the CBD rhythm and ensure the organizations survival by staying on their toes and by being sensitive to signs and portents for the next big-bang disruptor. Intimate consumer consultants can be best friends and insurance.
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Disruption Survival Strategy

To survive big-bang disruptors, the company must learn the new rules of strategy and competition. The key is to understand the four-part lifecycle of innovation:
1. The Singularity - the slow drawing together of matter and energy 2. The Big Bang - the explosion and expansion 3. The Big Crunch - the collapse of whats known 4. Entropy - calm before the next storm

Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Find & nurture truth-tellers

To combat the failure of traditional competitive intelligence, senior executives must find their truth tellers. Truth tellers spend their careers working in the industry and share a unique passion for its mission, its products and its customers. They are your industry experts. They have insights into new technologies and customer behaviors, who can predict earlier than anyone else when small tremors signal imminent earthquakes. Truth tellers are often eccentric and difficult to manage. They speak a language that isnt focused on incremental change and the next quarters results. They may be found inside or outside your organisation they may even be customers. They may be hard to find in-house if theyve learned to blend in for survival. Learning to find them is hard. Learning to listen to them is even harder.
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Big-bang disrupters enter the market in only two stages: to trial users (often de facto co-developers and co-funders) then to everyone else.

Use near-perfect market data

Big-bang disruption enters the market at ultra-high speed. There are two types of users: trial users and everyone else. The goal: sell to everyone else and fast. The success of big-bang disrupters is due to easy access to market opinion. Consumers to communicate with one another to determine their shared judgment. Instead of schools advertising and recruiting, clients share opinions on price, quality and customer service, whenever and wherever they are. Information is customized, timely, and from trusted referrals. When the right combination comes together, everyone knows about it instantly. Takeoff is immediate and vertical (see chart).
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Use near-perfect market data

For example, you create a smartphone degree. Known as Smarter, the smartphone and tablet application is designed to enable users to study, practice, take tests, pay bills, check grades, and email instructors and staff using their phones. Your new academic service model creates in your early users a vested interest in your products, builds intense loyalty to the concept, and to its particular implementation. Maintaining an intimate connection to trial users your in-house students, teachers, and staff is critical. All Smarter users can create commands: wake-up alarms, on-screen reminders, to-do lists. Teachers, students, and staff can suggest improvements on tests, lessons, quizzes, assessment rubrics, and related or peripheral services. Your academic service company solicits and publishes user ideas for commands on your website. You integrate the most popular apps into the default list of commands on all Smarter phones.
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

The end of conventional wisdom

The availability of near-perfect market information also means consumers make fewer mistakes. They wait until the right version emerges: laptops, 3D screens, smartphones, electric cars, solar power, certified courses. Almost-there versions dont sell poorly they dont sell at all.
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Collar your risk

Heres how a company can survive a big-bang disruption and emerge in a position of greater leverage and profitability. Move fast: A tough management, knowing big-bang strategy, can take decisive action: shed assets, retire products, close down business models, and then unlock core, often intangible, assets. Run with the intangibles: Dont be trapped by the value of hard assets. In a big-bang war, intangibles (expertise, brands, patents, human resources) are often the most valuable assets, perhaps the only ones that dont quickly become liabilities. Shed physical assets. Be ready to immediately evacuate current markets and to liquidate once-strategic assets. Shed mature technologies that will rapidly become obsolete before they become worthless. Diversify: As industry change becomes less cyclical and more volatile, a diverse set of businesses is vital. Fully commit to transformation. Let perennial second-bananas shed assets first, and take their expertise, brand, and intellectual property to where change is happening at a slower pace.1
1When

the film-based photo industry collapsed, it was Kodak, not Fujifilm Corp., that went bankrupt.

Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Use an Integrated Business Model

Deploy company strengths as independent, connectible business models; see which one sticks. TTI Teacher Training Institute
1. Offer 6-month scholarships to teachers with excellent English from around the world, experts on specific subjects. 2. Train and require each teacher to produce at least 1 set of easy, multimedia lessons, tests, and assessment tools from elementary to graduate levels. 3. Test these materials in-class, refine, translate into many languages, then post online for free worldwide access.

International Academic Services IAS

1. Use common office programs to create a suite of easy training lessons, quizzes, tests, and assessments that progress from preschool to PhD levels. 2. Test these materials in-class, refine, then post online for access via Smartest/FLCs. 3. Open all-year eenrolment. Charge only for in-class instruction, major testing, and formal accreditation. Hire 2TIs as online advisers

LCM Learning Center Management

1. Offer three-month LCM training to internet-cafe owners (or planning to open one) with perfect English from areas with underserved students. 2. Offer free airfares, oncampus training, food, rooms, and certification. 3. Requisites: perfect spoken and written English, own or operate an Internet Cafe, and must commit to at least two years of operating an FLC in a target area.

Franchised Learning Centers FLC

1. Partner with internet cafe owners in underserved areas around the world. Ecafe owners can be LCM-trained to manage FLCs (or not trained at all). 2. Pay the internet charges when enrolled students use (set hrs /day) to complete foundation or precollege studies, or the first half of a college degree. 3. Best students can apply to complete degrees on-campus, or online, as scholars.

Smartest Study via Phones or Tablets

1. Give students Smartest, a smartphone or tablet (or a webpage password) to study, collaborate, research, take tests, record and post videos, homework or projects, create online portfolios, compute grades, or connect with instructors. 2. Solicit and post translations of learning materials. 3. Open all-year eenrolment; charge only for in-class teaching time, major tests, and formal accreditation.

Recycle, Restart
The old industry is dead, a new one rises. Some incumbents are gone, new ones are created, and supply chains become ecosystems. The new industry waits for pressure to build, and for technology to go through another round of failed market experiments to start the next bang. Companies must focus on liquidating assets, recycling or retiring technologies and manufacturing-distribution facilities, and on financial tools to smooth the transition.
Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Restart, Relaunch
In sunset, distributors, agents, retailers, financiers and producers of obsolete products feel first and most acutely the full impact of big-bang disruption.1 Serial big-bang disrupters first go out of business and emerge as new enterprises with same name but often little else. Successful brand associations and truth-teller networks are their most valuable assets. To launch more disruptions, leverage disruptive technology and save the business model, the marketing, human resources, and the IT systems, so that the business can restart other businesses.2
1Smartphone

makers now sell billions of products, but more do sell peripheral products (cases, headphones, chargers) and service contracts, network connections and apps, and component parts. They must consider potential disrupters and the need to balance the past with the possible futures. 2 which companies such as Amazon have done successfully.

Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

Big-bang Disruption
Only a few details of strategy and risk management in each of the four phases are discussed here. Companies must know disrupter movements in their own industries and start preparing the capabilities needed for success in a world where the old business rules dont play. Embracing the rules of a big-bang strategy is not for the faint of heart; it takes commitment, vision and a strong constitution. Big-bang disruption can be quick, though they are at times predictable, their effects at times can be felt early. Organizations should heed the warning1 about the ways businesses fail: "Two ways. Gradually and then suddenly."
1Given

by a character in Ernest Hemingways novel, The Sun Also Rises

Nunes, F., and Downes, L. (2013). Big bang disruption, the innovators disaster. Business Day Live.

DISRUPT OR BE DISRUPTED

PART 2: Survival Strategies for New School Industry Investors

End of Presentation

mr.jaime.aiu@gmail.com