Creative destruction. It’s a term that’s as full of fear for big companies as it is full of promise for smaller ones. It raises all kinds of existential worries for incumbents, and it’s the reason that many innovators go into business in the first place – to shake things up. It also begs a further question. Do industries being disrupted or destroyed by new innovators participate in their own destruction? Could they avoid the ‘inevitable eclipse’ of their business models if they were a bit smarter about how they worked with the upstart start-ups who could one day take their crown?
Being on the right side of creative destruction
These were some of the questions that were tackled at a recent conference called “Accelerating British Innovation Through Cross-Industry Collaboration”, staged by Williams Advanced Engineering (the smart guys that grew out of Williams F1 technology), and Innovate UK, the government’s innovation agency. Formula One is the most fiercely contested technological arms race in modern sport, and Williams has kept competitive on the F1 grid for over 40 years, so they know a few things about being on the right side of creative destruction.
Constantly accepting new challenges
So what’s their secret? They succeed because they constantly innovate, they collaborate as much as they can and they both take risks and help partners de-risk those risks, according to MD Craig Wilson. Williams is not big, but it has been around as a team for a long time. It might be tempting to rest on their laurels, but they don’t. They don’t just collaborate as much as they can but as widely as they can, in sectors from defence to mobility, on projects from energy efficiency to personal health, from requests to work out time to market to proof of concept. And they work with private companies and public bodies, just as they did with Innovate UK on ground-breaking flywheel technology.
Realising there’s always something new to learn
The best companies realise that without constant innovation, their futures are at risk. So rather than fear change, or ignore it, they embrace it. “Companies that are disrupting allow us to innovate in a broader space so we welcome it,” said Helen Finch, Research and Technology, Head of External Technical Affairs at Jaguar Land Rover. JLR could worry about challenges in mobility, but it’s seizing the chance to collaborate more and more with the supply chain, SMEs and academia. It’s bringing those with new ideas who could challenge closer so that it can learn from them and get stronger together.
Trends and revolutions
JLR has also realised there are no longer single industries, but that automotive is at the centre of so many different revolutions that to think only of automotive is limiting. Julie Alexander, Director of Urban Development at Siemens, said Siemens protected its business model by watching the trends. It didn’t just react, it studied and paid attention, well aware that they would be disrupted one day if not right now. They are prepared to flex as needed, never feeling they are so innovative they will never be troubled by disruptors.
And the little guys?
So if the secret for the big guys is work with as many partners as possible as widely as possible to soak up new ideas, and to be open to change or still hungry for it, what should smaller companies do? Protect your IP and try and deal with the right people inside the bigger organisation, said Richard Tuley, Lead Research Scientist at European Thermodynamics. What was clear is that smaller companies often need bigger companies to help them prove concepts and get the level of funding required to do what they really want to do, and they need to prove their value to bigger firms.
So is creative destruction so frightening?
So while creative destruction can sound frightening, it can actually be healthy for everyone. While some big companies and even industries may simply be rendered obsolete by new technologies, the truth is most companies can adapt if they want to and should always be open to smart ideas that can improve the customer experience and save them money. David and Goliath don’t have to always play rough.
Neil Johnston, Head of Emerging Technologies and Industries, Innovate UK,