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Disrupt or Die: Only the Innovative Will Survive


May 17, 2016 - 1 Comment

Andy Grove, the late co-founder of Intel who pioneered the semiconductor industry, often said, “Only the paranoid will survive.”

Looking over your shoulder and worrying about oncoming competitors will always be a healthy practice to stay relevant and ahead of the pack. To remain an industry leader in today’s digital era, however, I would add, “Only the innovative will survive.”Chaos is the New Normal

Digital disruption of business and society

Today’s digital revolution is disrupting business and society everywhere, accelerating the pace of change at warp speed. It’s predicted that more than 40 percent of today’s major corporations won’t exist in 25 years (source: Babson Olin School of Business).  And according to Richard Foster at Yale University, the average lifespan of a company listed in the S&P 500 has decreased from 67 years in the 1920s to 15 years today.

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“Business leaders believe two out of five of the top-ranked companies in their industries won’t exist in the next five years, making innovation a matter of survival.” –Klecha & Co.

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As a result, organizations of all sizes and ages must learn to disrupt and reinvent themselves – strategically and culturally – before they are disrupted to the point of extinction. Remember the likes of Kodak, Blackberry, Blockbuster, Borders, Nokia and Circuit City, which either resisted fast innovation or couldn’t fully embrace it?

Now, it’s disrupt or die. No enterprise in any industry is too established to avoid potential failure when anyone, anywhere with a great idea and a smart phone can introduce disruptive products, markets and business models. Just look at “established” industries disrupted by the likes of Uber, Airbnb, Pandora, Netflix or Alibaba, who themselves are already seeing competitive pressures from the likes of Lyft, VRBO, Spotify, and Amazon.  Chaos is the new normal.

The good news from Gartner is that by 2020, 75 percent of businesses will be digital businesses or will prepare to become digital businesses.  However, on the down side, Gartner predicts that while many digital transformations are under way, only 30 percent of these efforts will be successful.

Focus on innovators – not innovations

The focus should not be so much on innovations as innovators – on mentors rather than managers. It’s an old cliché, but it still rings true even in today’s highly digitized world:  People are a company’s most valuable asset.

A culture of innovation happens when employees feel empowered to think and act like entrepreneurs in a startup. Rewards, recognition and incentives must be put into place, including time off and venture funding.  Coaches who help guide ideas to fruition must play a bigger role than managers who are focused more on a daily checklist of goals.  Technology tools, lab settings, training and other resources must be readily available.

And C-level leaders must champion innovation, reinforce cultural transformation and encourage formation of cross-functional teams where every idea counts. When these cultural changes happen, employees will be inspired to take more risks, tap into their passions, form teams and spearhead innovation just like in a startup.

Innovating with Post Its

The Innovate Everywhere Challenge held workshops to teach Cisco entrepreneurs about lean startup methodologies

Clearly, it’s disrupt or die. Focusing on abrupt cultural transformation is now more critical than focusing on a company’s portfolio, whether it’s in the automobiles, financial services, apparel or technology sectors.  I believe many companies will perish because they won’t focus on the right priority – their people.  Instead, they will apply traditional approaches and processes to innovate new solutions.  Slow, incremental progress no longer keeps pace.

Such transformation is no easy task, especially in bigger and established companies where processes have proven so successful in the past. However, we’re disrupting Cisco’s culture now, returning more to our startup roots 31 years ago.

In the past six months, our Corporate Strategy and Innovation Group ignited a grassroots disruption across the entire company. With support from the C-suite, and allies in other organizations, our Innovate Everywhere Challenge across the enterprise – all functions and geographies – is instilling a companywide startup mentality.

We’re amazed at the results of this disruption. Teams of in house entrepreneurs are discovering each other, forming teams around their passionate ideas and incubating solutions for the betterment of customers, partners and employees.  This journey toward startup innovation has just begun, but the path ahead looks full of promise and opportunity.

In upcoming blogs, I will share much more about the Innovate Everywhere Challenge, explaining why and how we at Cisco – from the CEO to interns – are rolling up our sleeves to disrupt the culture. I will share strategies, lessons learned and next steps on our drive to transform into startup culture of innovation in the swiftly moving digital era.  Stay tuned for more on this exciting journey.



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1 Comments

  1. Correct Alex! However, the environment and opportunity are not the same around the world. You may find an excellent environment but without innovators participation and also, find Excellent innovators with no chance to participate due to environment. I think the leader should always prepare the environment for production and motivate the employee for innovation.