When you think of disruption what comes mind? Most of us would think innovations in technology, crypto currencies like Bitcoin or the latest autonomous driving technologies. We are actively seeing a big disruption of another kind. Many businesses are stripping away the fluff, bells and whistles from their business operations or services and focussing on creating greater value for their consumers. This focus on reducing fixed cost structures is disrupting many traditional business environments. On their own open concept or shared offices and services or charging consumers for only what they use, versus packing an offering that is all-inclusive is not disruptive. When the focus however is changing many elements of how you operate or go to market, then disruption is inevitable.
We have decided to break this conversation into 2 pieces. The first will be to focus on operational changes which tend to be very internal and product or services changes which tend to be external and consumer facing.
There is a growing trend for even the biggest companies to start looking at remote work environments, shared office space or shared services. Companies like No Fixed Address, a Toronto based digital agency, has been making a name for themselves by pushing low cost structures further. They have created a model that sees the lack of fancy fixed or separate offices, instead having an open shared workspace in Toronto’s East Room with enough space for all employees, the lack of a scheduled 9-5 work day, and stripped back processes. At TACK10 we tend to be very similar. We have opted for an open concept office, shared meeting space and are striving to operate in a paperless environment. While this represents cost savings, the focus on what drives value for clients and removing excessive cost or management burdens. Our experience is that as a team we are also much more efficient with our time which leads to being able to invest more time in client’s work.
Product or Service
Taking the idea of cutting out niceties a step further, Ryan Air is a great example of a company who has committed to a lowing cost structure so much so that it has become their value proposition. Not only do they cut out niceties, with things like extra leg room, checked baggage or where you prefer to sit on the plane becoming an up charge, they have also looked at cutting out necessities such as bathrooms out of their flights in the past. The company has determined that by taking out 2 of the 3 bathrooms on their planes they are able to add 6 extra seats, even going as far as to suggest the remaining bathroom could cost flyers one Euro to use should they be on a flight that is one hour or less. Their commitment to cost savings has lead Ryan Air to be top of mind for low cost flights, because they have chosen to do things differently, not better.
The Final Bell
Sometimes necessity is the mother of invention. Some companies opt to be different and in turn disruptive because they cannot afford to compete trying to be “better” and chasing the pack. Other times, experienced leadership opts to invest elsewhere and being different is a conscious decision in order to stand out. As our own James Chalmers loves to say “Being better sees you playing the same game and chasing your competitors. Being different is where you establish your value proposition and long term success.”