Creative destruction has the innate ability to impact the future of your business.
Of the many things that can bring about the end of a business, few can be more lethal than stagnation — not changing or improving.
As General Electric’s former CEO and management guru Jack Welch explained, this lack of inertia or momentum was one of the most dangerous things that could happen to a business: “When I try to summarize what I’ve learned since 1981, one of the big lessons is that change has no constituency. People like the status quo. They like the way it was. When you start changing things, the good old days look better and better. You’ve got to be prepared for massive resistance.”
So how do you keep your own business from falling into stagnation? The solution very likely lies in the concept of creative destruction. With proper implementation, creative destruction can prove to be the missing piece your business needs to stand out from its competition in a meaningful way.
Understanding Creative Destruction
The term creative destruction comes from economist and political scientist Joseph Schumpeter’s classic work “Capitalism, Socialism and Democracy,” in which he argued that capitalism itself “is by nature a form or method of economic change and not only never is but never can be stationary.” This occurs due to the essential drive of entrepreneurs to innovate in various ways, resulting in a system that doesn’t just “administer existing structures,” but also “creates and destroys them.”
In other words, by living in a capitalistic society, entrepreneurs are continually driven to find new ways to innovate so they can make progress toward their own goals. As they rethink the old ways of doing things, they seek to replace ideas or practices that are less efficient.
The end result is that eventually, this ongoing cycle of innovation causes certain ideas, skills, technology and products to become obsolete — replaced with something newer and better.
Creative Destruction Comes In Many Forms
In most discussions of creative destruction, the focus tends to be on technology — probably because this is where creative destruction is most easily recognized, and its results are most apparent.
After all, we don’t really see people driving around in a horse and buggy anymore. As a mode of transportation, the car was a massive example of creative destruction that completely transformed the world. And while cars themselves aren’t being replaced, we are seeing many forms of creative destruction seeking to change the automotive industry today, from the growth of the electric vehicles market to ongoing developments with self-driving cars.
However, it is also important to note that creative destruction can also encompass processes and practices — the way you do business, be it how you serve your customers, build your team or work with outside partners.
I recently spoke with author Robert LaMar, whose own background provides an example of the principle of creative destruction in following an educational path — or the “process” most people feel is needed for achieving a successful career — outside the established norms.
“While in high school, I became involved with vocational training where I learned to survey engineering works, create building designs with detailed layouts and so on — all while working full time. By the time I graduated, I could go into a rewarding career without any debt. Vocational training is often undervalued today, but it can be a life-changing experience for youth who would otherwise go into massive debt for a college education. They can find a rewarding career path and financial freedom by going against the grain.”
Embracing Creative Destruction
So, how does your business go about embracing creative destruction and using it as the missing piece that will lead to greater success?
First, recognize the fact that there is no one-size-fits-all approach to creative destruction. As noted earlier, it could come from introducing a new technology, deciding to run your business differently than others in your niche or taking a different approach to reaching goals in your personal life.
But to truly embrace creative destruction, you must start by looking at the norms in your industry that could stand to be uprooted. One of the most common issues I’ve seen in my own experience is that many businesses have adversarial relationships with their partners. Each partner enters with a “me first” attitude that ultimately undercuts the potential effectiveness of their work. Instead, collaborative efforts driven by shared goals and values that strive to create win-wins can deliver far more effective outcomes.
Of course, identifying potential issues that you could address is one thing. But having the right mindset is key to effective creative destruction. Even if you don’t consider yourself an “innovator,” you can still make creative destruction a core part of what you do by embracing the goal of continuous improvement. As you strive to continually reassess what you do and how you do it, you can find new opportunities for sharing and growing your value.
When this mindset starts at the top of your organization, it will trickle down and strengthen the entire culture of your business. This can help creative destruction become a natural part of your everyday operations — even if you don’t call it that.
Destroying to Build a Better Future
The term creative destruction may sound like an oxymoron — but sometimes to create something innovative and impactful, you must effectively “destroy” the old ways of doing things. No matter how you choose to embrace the power of creative destruction, there is no denying that it has the potential to radically transform how you run your business so you can unleash your full potential.
Whether through innovative partnerships, a new product or service or reworking your business model, finding new ways to do things will help your business stand out like never before.
