You can’t help but watch in amazement at the hyper growth of many recent consumer internet companies. And now, just as quickly, the speed at which some are plateauing, or even declining, is just as striking.
The theory folks are kicking around in tech circles is these companies are reaching market saturation faster than ever due to viral channels (read: facebook). Their growth then slows (or even reverses). Net: they’re moving through the typical lifecycle of a business at an accelerated rate
(Thanks to http://joshbersin.com/2008/07/31/make-learning-part-of-your-business-strategy/ for the graphic!)
The x-axis is now super compressed. Time is flying by. These folks end up in the decline and the subsequent fork in the road – rebirth or death – extraordinarily fast.
This poses an interesting new challenge: navigating the Innovator’s Dilemma at an accelerated rate.
For a company to achieve rebirth, it often has to invent a new line of business. This process is hard – the definitive book on the topic is Clayton Christensen’s Innovator’s Dilemma.
For the company to achieve rebirth, it often has to wrap its collective noggin around a new, small team, breaking the established rules, that may be doing things that cannibalize the existing business. An internal startup. This is so difficult to accept that the company often has to come near death to get sufficient internal support to really make a run at the new new thing. See Apple, IBM, etc.
So now back to our new world of accelerated timelines. Imagine running a business that goes from nothing to billions in a few short years. Your (still messy) systems are built around hyper growth – your culture, staffing, data dashboards you look at daily. Your employees’ expectations. And then, suddenly, you’re plateauing. You’re likely to not recognize it until a couple of months after it takes hold. And before you know it, you’re potentially in decline. It all happened so fast that your company is still tooled for hyper growth. Rebirth v death depends on how well you navigate the Innovator’s Dilemma.
We’re all watching this show in real time. It’s possible that these companies have an advantage in navigating the Innovator’s Dilemma – they’re already tooled for growth! On the other hand, their growth resources are fixated on a business that has saturated its market and now likely needs to be managed in a different way. How well these companies capture the energy around their now mature business into new forms of innovation – and how flexible the people, from senior leadership to individual contributors, are able to be, will likely determine the outcome.