Disruption and pivoting business models

Disruption and pivoting business models

Disruption is everywhere. If you don’t believe me, just asked your closest consultant. Companies face daily changing audience attention spans, technology demands, integration requests and more and more innovative experiences.

The general understanding of disruption is that it is being driven by digital. The transformation of a business to operating in a digitalized way. (There is a difference between digitalisation and digitization, but that is another blog post.)

The logistics industry, and in specific the house moving sector of the industry is one which is primed for disruption. It’s business model has not really evolved over the years and it is still operated very manually. After all there is not too much call for terribly sophisticated ERP systems and other technology integration.

But does that mean that your business model should not pivot?

Well, quite the contrary, the moving business model is perfectly positioned to pivot and one that caught my eye the other day was what Stuttaford Van Lines have done.

drop and go business model disruption

Disruption – forward integration

Stutts (as they apparently call themselves) have been brilliant in pivoting their business model. They have in essence forward integrated up the value chain.

Through their Drop n Go product offering they are utilising the extra space in their underutilized trailers. They are taking typically dead space and making it revenue generating! It is brilliant.

The infrastructure costs in setting up this new disruptive product is almost zero. They have merely optimised space and utilisation. Yes they needed a section to their website and some staff and processes to run it, but that’s it.

The entire product requires you to do the work.

  1. First you book your package in online.
  2. Then you drop it at a distribution centre closest to you.
  3. You wait for the notification that your package has arrived.
  4. Finally, you pick it up at the distribution centre in the city you had it delivered to.

Disruption Optimisation

This is what disruption is really all about. It is not about diving head first into a technology solution that potentially changes everything about your business. Disruption is about finding new ways of doing things that help you make your business objectives.

In fact, disruption is just a buzzword that should really about strategy optimisation. Your business sits on a value chain. When thinking about growth (read disruption) you have to think about who is before and after you in that value chain. Strategy means one of two things for your value chain neighbours:

  1. Find a way to combine your offerings so that you are adding more value together.
  2. Make their products irrelevant to your common target markets because they get better service from you.

Guiding Principle

With disruption being the buzzword of the month, your business needs to remember one incredibly important guiding principle:

[Tweet “Disruption for the sake of #disruption will close your company! #business #transformation”]

Keep you purpose top of mind. If your reasons are not to add value to your clients, customers or suppliers then you are missing the point of disruption.

Remember that your brand was not built out of the “business of tomorrow” business model. It was built on the business model of today. With that in mind, no matter how you pivot, it is critically important that the move compliments your brand or you will end up alienating the audience you need to drive your new business forward.

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