Disruption is the new normal with market trends. Business owners can spot potential issues through trend data, listening to customers or just pure instinct. But while every industry will face serious change sooner or later, knowing how or when it's going to happen isn't easy. And once it becomes obvious, those that aren't on board are behind the curve.
There's no one barometer for change. So how do analysts develop disruptability indices? By looking for not just one canary flying out of a coal mine, but many. The more signs of weakness they see, the greater chance they see of the sector being disrupted. While your company might be in a strong position, upheaval within your industry can undo your hard work. Here are four ways to see that a big change is on the horizon so you can prepare for it, rather than be knocked off balance:
1. Profits are shrinking.
As a business leader, you're well aware of how your company's financial metrics fluctuate. But profits aren't just a reflection of the health of your company; they also shine a light on the state of your industry.
Looking at trends in your company's profits, you can probably see a bump following industry-wide breakthroughs. But you probably also see a slump beforehand: Disruptive innovators typically strike when the old way of doing things is no longer working.
An unexpected disruption could be devastating to your business—and not catching on to customers' real needs and how they're shifting could short-circuit your business's future.
If your company's profits are slumping, reach out to trusted peers. Are their finances sagging as well? If so, it's not just you: Find new ways to cut costs and engage customers, or a scrappy startup is sure to do so.
2. New technologies are taking hold.
Not every new technology is disruptive. Automatic transmissions might have overtaken their manual counterparts, but they didn't fundamentally change cars. With that said, new technology is often a risk factor. One innovation often opens the door to another, which might not be so benign.
Keep an eye on your competitors: Is that new app they're rolling out actually a version of the old one, or does it have predictive features its predecessor didn't? If they're suddenly talking about new markets or teasing other tools, take that as a red flag.
Just as importantly, keep an eye on your organization's “factory floor." Have your producers discovered a workaround recently? Is some new online service making their lives easier? Don't punish them for not doing things “by the book," thank them for showing you where change is happening.
3. New models of business are emerging.
I have a variety of friends in the agency world, and new models are emerging that veer away from the traditional. A company recently came on my radar as a vendor to approve for marketing. Its site tagline promised to provide outsourced CMO services. When I read that, I thought, "Why in the world would I outsource my CMO?" However, the more I read about its approach, the more I realized it signaled a disruption occurring in the agency world: Customers are looking for specific skills rather than approaching an agency for full-service treatment.
The lesson learned from this: Always be on the lookout for new models. An unexpected disruption could be devastating to your business—and not catching on to customers' real needs and how they're shifting could short-circuit your business's future.
4. Large enterprises want in.
Perhaps the best sign of a shifting industry is shifting players. If corporations suddenly want in to a sector like lawn care, which has been left in most markets to local companies, things are about to fundamentally change.
But given that sprawling companies often prospect outside their own industry, how can you avoid confusing small-scale speculation with imminent takeover? Look at enterprise investments over time. A small-but-steady increase isn't nearly as worrisome as a sharp spike.
Industry-wide change can break businesses as easily as it makes them. The difference between companies that come out on top of change and those that sink with it is preparedness. Look for the signs, and start swimming before find yourself on the bottom of the pool.
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