Disruptive business models can present a daunting challenge to franchise owners, but companies that have survived disruption generally have common traits that sharpen focus while encouraging flexibility.

 

WHAT IS BUSINESS DISRUPTION?

Examples of disruption in business include the impact Uber® and Lyft® had on the virtual monopoly once enjoyed by taxi companies, how Amazon® and its home-delivery service transformed retail, and how disruptive startups like Airbnb® threatened the turf of traditional hotel owners. Disruptive innovation models are usually the result of gradual process changes to existing business delivery models that become practical once coupled with new technologies.

 

BUSINESS MODEL DISRUPTION EXAMPLES

Disruptive models in the franchise industry include the explosive growth of delivery services fueled by startups like DoorDash®, the order kiosks popping up in McDonald’s® and Panera® locations, and online order portals. Whether these disruptive models are driven by a desire for increased revenue, reducing costs such as staffing, or the simple reality that customers want more ways to do business, they create a competitive challenge for franchise businesses that have lagged behind.

 

  1. DISRUPTIVE BUSINESS IDEAS ARE GOOD

The knee-jerk reaction to industry disruption is that it’s a dangerous, concept killer. Actually, disruption innovation models are usually good things for companies that are willing to change with them. They typically create efficiencies and more profitable business models.

 

  1. COMPANIES THAT SURVIVED DISRUPTION

Businesses that have defined and are aligned with their purposes are better able to make decisions when faced with challenges. Remaining true to that central purpose keeps them from becoming distracted or chasing trends spurred by disruptive business models. Even more important than a clear purpose is a leadership team with the courage and skills to guide the business through the challenges of business disruption. Franchise owners and leaders must be willing to think about and plan for ideas and behaviors that are nontraditional and new to the business context. They must possess both self-awareness and the willingness to grow.

 

  1. ACCOMMODATING DISRUPTIVE BUSINESS IDEAS

Companies that are always rethinking how they do things and accommodating opportunities for innovation are better able to stay focused. Leaders who encourage creative thinking and weave that attitude throughout the business will create a workforce that is better able to accommodate disruptive business ideas. Leaders must be willing to ask and answer the kind of questions that make people uncomfortable. A franchise business that remains focused on the factors that have driven past successes will be more vulnerable to disruptive business ideas than one where assumptions and preconceptions are constantly questioned.

 

  1. DISRUPTIVE COMPANIES FOCUS ON CONSUMERS

As consumers, we’ve come to expect convenience, highly personalized service, and a sense that companies have values that are aligned with ours. If another company does a better job of fulfilling those needs, we’ll switch in a heartbeat. So it’s important to ask customers about their needs and expectations, because how they envision you largely determines your success.

 

  1. PLANNING FOR DISRUPTIVE BUSINESS IDEAS

While nobody can accurately predict business disruption examples, franchise owners can plan for them at a general level. Pay attention to what’s happening in other industries and consider how similar changes could affect your business. Engaging in regular scenario planning and asking what-if questions can put you in the right mindset. A strategy of piloting new ideas and a willingness to fail quickly and learn from thought failures sends a message to team members that innovation will be supported and rewarded.

 

  1. HAVE A STRATEGY FOR BUSINESS DISRUPTION

Work to develop strategies to identify potential disruptive business ideas within your industry. Pay close attention but be careful not to let your own biases mislead you. Focus as much as possible on facts, data, and objective measures. If you see a competitor make a sudden shift in the way they do business, pay attention, because it may mean they’ve spotted something you haven’t noticed yet. However, don’t automatically assume they’re correct and follow suit. Examine their reasoning as it applies to your own purpose and the needs of your customers. Having a clear understanding of your purpose will help you move forward with confidence, no matter what the future brings.

 

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