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Disruptive ideas – where are they?

By Keith Webb on 03/03/2016 - 0 Comments

Disruptive ideas – where are they?

20 years ago the Theory of Disruptive Innovation hit the world of Business. It`s a misunderstood concept, but the Grocery Industry is one where the phrase `Disruptor Business` is over-used and viewed with either excitement or, from the established players, trepidation.

For multiple reasons there seems to be an air of drift around the Trade at the moment – especially in the Independent Trade. No-one has to look far for ‘bad news’. Within the last few weeks there have been articles covering the potential impact of the ‘National Living Wage’, non-action on Business rates and the potential removal of Sunday opening hours restrictions.

Outside of the political sphere it feels like the historic ‘5 Pillars of Convenience’ are all wobbling. The long term decline in overall alcohol consumption continues to deliver consolidation in the market, whilst opening up opportunities – most noticeably in the niche-premium categories. Jamie Oliver`s intervention on sugar in soft drinks re-visits a concern originally raised many years ago in the book ‘Sweet, White and Deadly’.

This time there may be a more receptive political response as the unaffordability of Health funding becomes an unavoidable issue on the current trajectory. The Snacking categories are a key part of ‘the problem’ for campaigners on the level of salt being consumed, Tobacco-via tax levels, display restriction, packaging restrictions- is overtly on the road to becoming a niche activity whilst My Local`s Mike Greene`s recent commentary on his supply partner`s chilled and fresh offering served to highlight a weakness in many Independent businesses - in a category that, surely, should be a strength.

Before we all get our coats it`s important to note that there is still time. I have, in recent months, seen many business ideas that have been presented as ‘disruptive’. But none of them have been. Within the world of business academia there is even an ongoing debate as to whether the two businesses usually lauded as ‘disruptors’ – Uber and Airbnb - actually are.

All elements of the Trade may well be spending much of their time looking for marginal gains within traditional revenue streams. The travails of Tesco are well documented as the need to supplement retail profit with ‘secondary income’ started delivering that always inevitable hubris.

Perhaps many of the other operators are actually spending most of their time working on how to get more overider and advertising money instead of apportioning an element of resource to discovering the genuine Disruptive idea that will revolutionise their business – moving it on from what is, in reality, a management of decline masked by a blizzard of ‘activity’.

All retail and wholesale businesses will, at the moment, be the grateful beneficiaries of a largely unbudgeted windfall from much lower than expected fuel costs. That buys a little more time for  ‘chin-stroking’ whilst temporarily strengthening the bottom line.

So what are the points that Businesses looking for that ‘disruptive’ eureka moment are advised to be doing? Firstly companies should have a defined group, operating under the protection of the senior leadership, exploring new disruptive models. Secondly, ‘Disruptors’ often build models very different from those of incumbents – a few tweaks around the ‘norm’ will not deliver disruption.

So what happens when, probably, a new entrant, delivers disruption? The model states that ‘Survivors’ do not overreact by dismantling a still-profitable business. They should strengthen relationships with core customers whilst creating a new team focussed on the growth opportunities that arise from the disruption.

The excitement comes from those businesses who see the opportunity and are actively ‘working on it’. Perhaps the game changer will reveal itself in these pages next week? Who knows, but there`s only one thing certain – someone, somewhere will be working towards something that in future years we all look back on and think “Why didn`t we spend the time working on something like that?”

Keith Webb, owner and Director of Aiden Associates and Business Advisor for Icon Business Solutions, Non-Executive Director.

(published in the Grocer, February 2016)

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