If a disruption is a change to the norm, then Value-Disruption is  a change to the norm that creates value.

I’d like to start a dialogue about this topic.

I’ve been writing recently about value-disruption based on work by Clayton Christensen and Alex Manu.  The key ingredient seems to be: a new resource and associated interfaces (a value-disruptor) allow a new behavior to emerge in a target group that satisfies a human motivation.  This new behavior disrupts relationships (in a positive way) and so creates new value.

Value-Disruption Elements

LinkedIn Question

After having written a number of posts on this topic (here, here, here, and here)  I wanted to see what others thought so I asked professionals in LinkedIn this following question.  “What examples can you give me of companies that are value-disrupting their industry?“

I received some interesting answers back.  (And I’m going to ask you to submit your thoughts at the end, with a twist.)

Well Known Examples

First, well know examples were submitted.

• Circe de Soleil
• Apple with iTunes
• Nintendo Wii
• Google with many of its applications: Search, Google Maps, email,…
• Many social media sites like Facebook, LinkedIn, Twitter

Then a couple of airlines.

• Virgin Air
• Porter Air

While the airline examples offer a better service than others and have carved out a niche, I can’t see how they have a disruptor in play that allows a new behavior to emerge. (ennova)

Tor Grønsund suggested

Swiffer (P&G) disrupts the vacuum cleaner.

Connecting a power-driven machine doesn’t work for small jobs.  So instead you use a swiffer which has reasonable “pick-up” capabilities.  A small but reasonable level of new behavior (ennova)

Asif Khan suggested

Vex Canada

They are building a national WIFI network that’s free.  They will offer free WIFI in restaurants, coffee shops, airports etc.  by having suppliers to these locations pay for installation and running costs in  return for advertising for people using the wifi.

They should certainly disrupt the industry of paid WIFI in Canada and allow 1000′s of people to connect to the web in 1000′s of new hotspots around the country.  Significant new behavior can now emerge. (ennova)

George Hazapis suggested

The publishing industry is undergoing a transformation, re-engineering its value chain.

Vizu

One example would be Vizu, a company behind Ad Catylyst, a digital ad effectiveness measurement system. The company measures how online ads impact viewer perceptions of key brand attributes.

Zeta

Another company is Zeta which provides complete digital solutions to enable publishers to market through email and other digital channels to drive traffic and improve engagement. Companies are transforming the industry by taking costs out of the business, increasing the engagement factor for print, adding value to content, improving web-based CPMs, assisting publishers in increasing the value of content within their eco-systems through the use of short codes, and tagging. There is a burgeoning mobile market and publishing is going online & mobile.

Boy, you can just imagine all the new behaviors will emerge from brand managers now that they have tools that gives them real data.  (ennova)

The hospital business model is undergoing disruptive innovation as the hospitals need to keep everything & everyone well at low cost.  Hospitals should cede market share to disruptive business models, patient by patient, disease by disease starting at the simplest end of the spectrum of disorders that they now serve.  Hospitals need to deconstruct their activities operationally into two different business models: solution shops and value-adding process activities.

Aravind Hospitals

in India which do eye surgery, and

Coxa Hospital

in Finland which focuses on hip and knee replacement surgery.

People travel out of country to get top notch medical care at lower rates and faster than they can in their country. Significant behavior change. (Ennova)

Thanks George for these four strong examples.

First, thanks to all the LinkedIn contributors for your descriptions of value-disruptions.

So, what examples would you provide?  Most importantly what do you believe is the relationship between the degree of behavior change and their business success?

Lastly,  thank-you for visiting http://ennova.ca

It’s been reported multiple times (here, here and here) that Pepsi will not be advertising in this year’s NFL Superbowl.

Pepsi had been a major advertiser during the Super Bowl. According to TNS, the company spent $142.8 million on the 10 Super Bowl ads from 1999 to 2008, second only to Anheuser-Busch, which spent $216 million.

The nation’s second-biggest soft drink maker is plowing marketing dollars into its “Pepsi Refresh Project” starting next month as its main vehicle for Pepsi. The project will pay at least $20 million for projects people create to “refresh” communities.  A Web site will go live Jan. 13 where people can list their projects, which could range from helping to feed people to teaching children to read. People can vote starting Feb. 1 to determine which projects receive money. (sports.espn.go.com)

Still, CBS said in November that it had sold about 90% of its advertising spots during the game. (CNNMoney.com)

There is more going on than the savings.   When you unpack this story you reveal a truth about differentiation and the power of value-disruption.

First, unpack advertising at the Superbowl.  It’s a premier event watched by millions world wide.  Your brand picks up prestige: success, top of the game, toughness, etc.  However, it remains a passive medium.  The consumer/viewer watches and may or may not assimilate the message.  Which is why so much is spent on execution.  You need to capture viewer’s attention.  But behaviorally, there really isn’t anything that different compared to other adverting, other than scale, scope and prestige.  They are all passive.  The viewer behaves the same way whether they see your message at the Superbowl, or on the latest show of Desperate Housewives.

Compare that to the new connection they are going to make.  Viewers are transformed into users.  They interact with the site.  They put in ideas. They make comments.  They vote on other’s ideas.  They are part of a system that helps others.  They engage.

In this case the consumer’s behavioral construct is deep, multifaceted, and more emotionally relevant.  Their relationship with Pepsi has changed from passive to active.

The result?  The second largest advertiser of the Superbowl has left the Superbowl.

Going Nowhere

Opps….. Superbowl advertising just became a commodity.  Not because someone came up with a bigger and better event.  No, because they were value-disrupted by a technology (web 2.0) and an associated interface (voting system)  that enabled a new behavior to emerge.

And that, my friends, is the key to how you differentiate.

You can learn more about value-disruption in earlier posts here and here.

Thank-you for visiting www.ennova.ca

Unpacking stories to find the truth that lies underneath is always fun.  Here’s a story about a janitorial firm in Cincinnati Ohio that is both inspiring and, reveals how to escape commoditization by differentiating.

First the story.  The basic facts are these.

• They are a janitorial firm (since 1972) that service office buildings over 100,000 sq. ft.
• Like companies in the industry, their employees were largely immigrants looking for a first job that could lead them somewhere else.  After all, who wakes up thinking of cleaning toilets as a career?
• They like everyone else suffered from massive turnover – 400% a year (Yes, that’s 100% every 90 days.)
• You can imagine the turmoil and the low, low margins this level of turnover would create.
• So they implemented a bold idea.  They provided a Dream manager for their employees (all of them).   The dream manager met monthly with the employees and helped them articulate their dreams, plan for it, and because a financial component was usually involved, helped them save for it.

Think about the boldness of this idea for just a moment.  How crazy is that?  A dream manager?  Who has ever heard of such a thing.  A company that spends money helping you achieve your dreams?

Back to the story.

• The Dream Manager Program worked. It slowly gained momentum as employees started achieving their dreams.
• It really took off when Rita bought a house.  Then everyone saw that they too, could realize their dreams. (A car, a good education for their kids, a proper Christmas, a vacation back home, simple things many of us take for granted.)
• The results were (are) incredible.  In five years, 2,785 significant dreams were realized, turnover fell to 4%, gross revenue tripled, profits rose every quarter.
• Their costs are lower. Their client satisfaction tops everyone else (As you can imagine, their employees are very loyal and willingly work very, very hard). No competitor can match them.  They are differentiated.
• BTW, there are now 11 full time dream managers on staff.

What does this all mean?  Should we all hire dream managers as part of our business model?

No, not necessarily, but it does teach us an valuable lesson about how to differentiate.  It starts with a new phrase - value-disrupt.

A rose disrupts the moment. To differentiate, disrupt behaviour

Greatness has always disrupted the norm.  From fire to electricity; from writing to the iPod; different objects, different models, different ideas all inspire latent behaviours to willingly emerge that create new value.  (That’s they key!!)

Let’s unpack the story and discover the formula for differentiation.  As we go through the story we underline the elements.

1. Jancoa recognized a human motivation that existed in their target group.  In their case – the motivation of their employees to dream, to hope for a better future.  (While this motivation is universal for most of these immigrant employees they had long since stopped dreaming.  After all, life taught them they would never reach their dreams.)
2. To enable that motivation to express itself they created a disruptor – (The combination of a resource and associated interface)  = the dream manager with the monthly meetings.
3. The value-disruptor provoked a latent behaviour to willingly emerge.  Employees articulated their dream, planned for them and with the help of the dream manager, monitored progress a monthly basis until the dream was realized.  They did so without being coerced.  They wanted to do this.  A latent behaviour willingly emerging is the KEY.  It’s a new behaviour that a target group willingly adopts that causes a disruption to occur.
4. It disrupted the relationship between the employees and the company.  Duh Yeah!  I don’t just clean toilets here.  I make my dreams come alive.
5. That value-disrupted their markets.

So there you have it, the formula for differentiation.  I’ll return to this value-disruption concept in future posts.

Tips on disrupting

1. Focus on the new behaviour you wish to emerge.  As a result of changing your offer will they do different than they did before?
2. Test it for willingness.  Why will the target do it willingly?  To answer this question think about how easy it will be and how strong the motivation is.
3. Finally, remember that technology by itself is useless.  What is the work process that surrounds it that makes it useful?  Fire by itself just burns.  When you have a work process to control fire you have something useful that will value-disrupt.

Many thanks to Alex Manu who introduced me to this concept.

Thank-you for visiting www.ennova.ca.

You can buy their book about their experience here.  It’s a great holiday gift.