Signs Your Company Will Suffer Disruption Failure

  1. The money is coming in, and you are able to raise prices whilst winning ever bigger deals. This conceals the fact that at the low end your salespeople are losing deals on price.
  2. Your organisation is the market leader, and everyone believes that in order to keep that position, all that’s necessary is to keep winning new customers at a rate faster than competitors.  The problem is no-one has thought ahead to the time when there are no more new customers left. At least, none that can be won without discounting so badly the whole market is affected.
  3. Competitors have shown up who target related, but economically uninteresting market segments. They’re able to do so because their cost base is neglible compared to yours. You don’t care because their customers aren’t your customers, so it feels safe to ignore them.  The thing is, a lower cost base is the most effective weapon against a larger organisation in a battle on price, which is how these competitors will go after your customers as soon as they expand beyond their niche segment.
  4. Your most important customers start getting most of the resources. This seems like a sensible strategy to drive revenue, but it leaves your flank exposed. Defections are only a matter of time because customers always optimise their value proposition for themselves. The fact this has begun is the first sign your company’s foundations are built on sand.
  5. You strive continuously to add features to your product. You have the best on the market already, but you add more regularly in order to keep ahead of competitors and support higher prices.  The buzz of the new conceals the fact that most customers only use a fraction of what you provide. They are therefore getting really poor value for money, an equation which gets worse over time.

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