Disruption can be found in nearly every industry. Entrepreneurs  achieve disruption by developing start-ups that transform the way business is done. Airbnb has changed the world of travel forever. Today, this company enjoys a value of more than $31 billion. Lyft comes in at a cool $7.5 billion, after turning the taxi service industry on its head. FinTech firms like Stripe have created mobile payment solutions that are used by leading financial services companies like Visa. Even specialised services such as computer security are dominated by disruptors like Synack.

Every established organisation is at risk of losing its competitive edge. If an entrepreneur hasn’t already identified a gap in the marketplace, it is only a matter of time. Successful businesses are not waiting for the next wave of start-ups to disrupt their industry. They are disrupting themselves internally, so they can lead by example, and they are acting to adapt to the Everything as a Service (XaaS) economy.

Proven Methods for Creating Internal Disruption

The primary issue that traditional companies face is an over-reliance on practices that were successful in the past. Instead of embracing changes that come in the form of new digital and cloud technology, improved access to business insights, and adjusted workforce expectations, they continue to depend on a methodology that is now or will soon be obsolete. Internal disruption can alter the current script, creating a business model shift that is able to compete in today’s marketplace.

There are three main principles that drive innovation, whether it occurs inside or outside of the organisation. First, disruptors are those that are willing to step outside of their comfort zone. From inside the company, that means an openness to exploring alternative opportunities and new methods of getting the job done – even if they deviate from the core business operations that have driven strategy since the day the doors opened. This requires leaders who are willing to challenge the organisation to explore innovation, and they must follow through when it comes to funding and championing projects. A culture of internal disruption starts at the top when leadership encourages staff members to take risks.

The second principle flows directly from the first. Employees will only push beyond current practice when they know it is safe to take risks. A large percentage of startups fail in their first year because the initial idea doesn’t quite make the mark. Internal disruptors and innovators face the same risk that their idea, when put into practice, will be unsuccessful. Leaders who can sincerely assure their team that responsible risk will be rewarded – even if it fails – can be confident that internal disruptors will bring their ideas forward.

Finally, the third driving principle for internal disruption is a singular focus on customer needs and expectations. In a world where the Everything as a Service (XaaS) economy has become standard, disruption means identifying and implementing relationship-building business practices, so that customers can rely on having their needs met whether from inside or outside of the organisation.

Areas of Focus for the 21st Century

When disruption comes from outside entrepreneurs, businesses quickly fall victim to obsolescence. An ability to disrupt the industry from within the organisation not only removes the risk of obsolescence – it also puts innovative companies ahead of the competition. These are five critical areas of focus for self-disruptors:

Everything as a Service (XaaS)

Major financial institutions and FinTech startups have created a model for XaaS partnerships. Innovators from outside these organisations have developed a vast array of tools to make it easier for consumers to manage their finances. At first, traditional banks attempted to match the level of service offered by disruptive startups. They created in-house lines of service applications, but they simply couldn’t compete. Now, they have changed their strategy from competition to collaboration, with partnerships that give entrepreneurs access to a large customer base. The financial institutions benefit from keeping their customers happy. Internal disruptors must focus their strategy on improving the customer experience long-term, as successful companies are those who can offer XaaS solutions.

Digital and Cloud Technology

New technology means new opportunities for providing innovative products and services. However, many organisations are unable to pursue self-disruption, because legacy business systems can’t support the changes. As in-house innovators develop disruptive designs, CIOs must consider whether it is time to replace IT infrastructure.

Business Insights

Advanced analytics and the use of big data are not new to the business world. However, advances in technology have dramatically impacted the amount of insight and the level of detail available. Companies with a self-disruptive strategy are drilling down to learn more about customer behaviour, and they are developing the exact solutions needed to fill gaps in their customers’ experiences.

Artificial Intelligence

Until recently, AI made for an entertaining movie plot, but there was little or no realistic application in the workplace. Now, AI offers impressive enhancements to an array of business processes, from managing repetitive tasks to meeting customer service demands. This change is driven by advancements in machine learning, which makes it possible for technology to grow smarter as it is exposed to data. Disruptors are exploring opportunities for leveraging AI to develop improved solutions to business problems.

Workforce Expectations

Millennials are now the largest working generation, and the unemployment rate is shockingly low. The combination of these two factors makes it more important than ever to consider workforce expectations when decisions are made. Millennials are the first generation to grow up with digital technology, and they are comfortable with managing their work and personal lives through mobile devices. Retaining top talent requires management to adapt to employee expectations on when and how work gets done.