December 12, 2016

Disruption Is Not A Strategy, It's An Outcome

It’s hard to imagine an industry more in need of disruption than the fossil fuel industry.

There is no question that the burning of fossil fuels creates toxic byproducts that cause serious illnesses and death.

There is compelling evidence that the burning of fossil fuels is contributing to what might turn out to be irreversible damage to the environmental stability of our planet.

Geopolitically, the economics of attaining fossil fuels has caused hundreds of billions of dollars to be transferred from Western countries to places bent on our destruction.

And individually, purchasing fossil fuels for automobiles is a major financial burden on many low income consumers.

It’s hard to draw up a more compelling case for the need for disruption.

Strangely, there is a very obvious technological solution to a substantial aspect of the problem — battery powered vehicles, or as we call them, electric cars.

And yet, electric cars have not been anything near a disruptive technology.

In 2008 we had 12 car models in the US that were battery powered. Today we have 55. But they are languishing. Between 2008 and today the electric car's share of the automotive market has crawled from 2.3% to 2.8%. If it wasn't for production driven by government mandated emissions standards, I doubt the share would have grown at all.

So what's gone wrong?

As we’ve said so many times here, marketers always overestimate the appeal of new things and underestimate the power of traditional consumer behavior.

So far, battery powered cars are very unappealing to consumers. They’re too expensive, they have limited range, and except for a few, they look like crap.

Despite the incessant marketing horseshit about consumers' passion for products that “do good” and products that "align with their values,” most consumer behavior still operates on a very simple principle -- what’s in it for me?

If you think your new technology is going to be disruptive you better first be sure it has consumer appeal.

Amazon, Uber, and Airbnb aren’t popular with consumers for technological reasons. They are disruptive because they are 1)cheaper and 2)produce a better user experience.

In other words, they are an improvement.

Disruption is not a strategy. Improvement is a strategy.

When improvement is compelling enough, disruption is the outcome.

Quote Of The Week...
...And speaking of things that are not a strategy, here's a great quote from Coke global CMO Marcos de Quinto, "Social media is the strategy for those who don't have a true digital strategy." Or as I am fond of saying, "Social media isn't a strategy, it's absence of a strategy."

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