The Challenge:

Here’s a challenge for you:  I want you to stop selling your most successful product.  You’ve read that correctly.  Your most successful product.  Why, as a business coach would I want you to do that?  Anyone who has done an MBA will be aware of the life cycle of a product, shown by the Sigmoid Curve below.  As a product reaches maturity, sales decline.  The trick is to predict when the decline will happen and release a new product to ensure revenue continues.

 

Image result for the sigmoid curve product life cycle

If you are an Apple, or McDonalds or any other  large organisation, you simply take control of the Sigmoid Curve by forcing out new products.  Think about it, customers don’t decide when the new iPhone is out, Apple does.  They don’t wait for customers to get tired of the model, they simply bring one out before that happens!  So, creative destruction, is to destroy perfectly good revenue streams and replace the income with new or reinvented products or services.  Instead of waiting for competition or market forces, this drives innovation from the very top, thus acting as a catalyst for research and experimentation.  This automatically changes the culture and structure of the organisation to continually drive the marketplace, instead of reacting to it.

Benefits

General Electric once set a target that 50% of revenue should come from products that are less than five years old.  This put managers much closer to the marketplace making sure they are coming up with new ideas ahead of their competitors.  The culture of creativity and innovation is completely opposed to other cultures of complacency and the ‘status quo’.

How to use this:

Next time you look at your revenue spreadsheets, identify your star products, and introduce this concept to your team.  Challenge them to kill the product and come up with a new source of revenue.  Not to rain their parade, but to challenge them to keep inventing new ones, even though they clearly don’t have to yet.  Creative destruction is far from the notion of ‘necessity being the mother of all invention’.  Instead, creative destruction is its own form of immaculate conception.

ISN’T THAT INTERESTING?