How to Disrupt Your Industry with Business Innovation!
Business Insight issue 7 discussed the reasons why entrepreneurs exist even in an era where innovation and disruption have brought about seismic shifts in the way the business world operates. No doubt you will have seen and read many articles about unforeseen and sometimes rapid shifts in economic dominance, some of which may either have triggered your entrepreneurial spark or may have left you quaking in your boots!
This Business Insight article (issue 8) explores the age of disruption where you may have noticed you are living through (at least) 3, yes 3, industrial revolutions all at the same time! Revolutions that are transforming the way we live and in some cases the very foundations of society at a rapidly accelerating rate!
It’s little wonder then that you may be feeling somewhat overwhelmed and perhaps a little disoriented!!! You may even be feeling extremely overwhelmed trying to spin so many plates all at once you feel like you’re losing control!!!
Whilst we still find ourselves in the midst of the 4th and 5th Industrial Revolutions where (in the 4th e-revolution) electronic applications are becoming ever more prevalent and (in the 5th AI revolution) artificial intelligence and machine learning blur the lines between what humans and machines can do, we find ourselves entering another new phase, arguably even a new world order!
So what is the suggested 6th industrial revolution and how might it be impacting you and your business?
Depending on your sources of information, research suggests that a new order is unfolding in the business world. One where conscious capitalism* and sustainable business practices** are becoming more mainstream prioritising stakeholder wellbeing over maximising shareholder value. When this is done well, an equitable balance is found between the demands of all stakeholders including shareholders.
If (like the Humankind Entrepreneurs Club) you subscribe to the view that business can and should be ethical, socially responsible, and more sustainable, then it’s highly likely that you will embed stakeholder-focused strategies and practices into everything your business does. And for many industries, the way you are choosing to conduct business will be both innovative and disruptive.
Just one of many examples of this is the movement within the fashion industry toward slow fashion where the focus is on sustainable clothing production that prioritises fair trade practices. An approach that is in stark contrast to fast fashion production practices according to several undercover reports including Channel 4 Dispatches: Fashion’s Dirty Secret!
So what makes slow fashion innovative and disruptive?
One of the arguments for fast fashion is the demand for low-priced high fashion clothing that responds rapidly to new trends, often mimicking designer brands, making them easily accessible to consumers. Arguably, this suggests that there is only one way to access high fashion quickly and affordably.
However, there is an emerging class of slow fashion designers who are using innovative practices and the circular economy*** to supply fashion-conscious consumers with products that are still relatively affordable without resorting to harmful production processes. As sustainability moves up the consumers agenda, slow fashion begins to disrupt the industry by reducing the desirability for fast fashion thereby making this business model a less attractive and potentially obsolete proposition.
As this example (and many other disruptors that precede it) suggests, industry disruption tends to be more successful when a push from the supplier side coincides with a pull from the consumer side. This is reflected repeatedly in our own primary research, observations, and practical experiences of innovation and disruption across many other industries as well.
So how might this apply to you?
Just like you as you build your business, a growing number of entrepreneurs, founders, and business leaders are actively leading the way in the 6th Industrial Revolution by purposefully adopting practices and business models that are ethical, socially responsible, and more sustainable. It is your progressive approach that’s pushing products and services into your respective marketplace increasing the options for consumers who live by the same values as you.
Irrespective of legal structure, you are voluntarily choosing to conduct your business affairs in a way that embraces exemplary practices based on ethical, socially responsible, and sustainable values. Because you believe in honesty, fairness, transparency, and moderation, you are prepared to take the necessary steps to achieve specific sustainability goals and other initiatives where they are relevant and best suited to your business. Furthermore, because of your active encouragement, everyone in your organisation feels confident and comfortable living by these values. In this scenario, stakeholders including shareholders are exercising their freedom of choice and are choosing to allocate financial (and other) resources towards activities that serve the greater good.
Consequently, companies who genuinely adopt an ethical, socially responsible, and more sustainable approach have no need for greenwashing, exploitation, or rapaciousness. Unproductive, unhelpful biases and prejudices are actively discouraged and appropriately addressed, rather than being swept under the carpet!
Whilst it’s hard to deny that we are deep in the midst of at least 2 Ages of Disruption that are driving extensive innovation, you may subscribe to the viewpoint that there is an urgent need to change the way business operates in order to protect and sustain our precious planetary resources. After all, without these, business and humanity would struggle to survive! You may even believe that the very survival of humanity itself (and everything we rely on to exist) depends on it! And that’s okay.
Conversely, you may still subscribe to the same viewpoint as The Friedman Doctrine**** where Friedman argues that the only responsibility of business is to maximise profits and shareholder value within the confines of public expectation. Whilst he does not advocate unlawful or unethical behaviour, his doctrine suggests he firmly believes that social responsibility and the greater good are best served by the not-for-profit sector alone. He goes on to argue against allocating expenditure that reduces profits for the purposes of environmental sustainability, pollution reduction, social mobility, and poverty alleviation suggesting these social aspirations are an improper use of shareholder funds.
Whichever viewpoint you subscribe to (be it for, against, or somewhere in the middle) recent events may have brought the need for extensive innovation within your business into sharp focus, as it has for many entrepreneurs, founders, and business owners. In times of crisis, increased instability, and economic uncertainty, the phrase "necessity is the mother of invention" comes to mind. If you are experiencing this yourself, you're not alone. In our humble opinion, by choosing to respond with an innovative and potentially disruptive approach, you may well be disrupting your industry with business innovation whether you intended to or not!
* Conscious Capitalism: Liberating the Heroic Spirit of Business by John Mackey and Raj Sisodia
** UN SDG (sustainability development goals)
*** https://wrap.org.uk/about-us/our-vision/wrap-and-circular-economy
**** Friedman Doctrine by Milton Friedman (New York Times 13 Sep 1970)