How to compete with a fast-growing disruptor company

In 2000, I launched my first company in Los Angeles, one of the first online research firms in our sector and the only one specifically targeting the entertainment research vertical. We had an uphill battle. Our competition was heavily entrenched in the studio ecosystem and had spent years building normative databases and deep relationships that our prospective clients were reluctant to give up, even when the promise of faster and more reliable/representative data was presented to them. Fast forward three years, and we had not only managed to unseat nearly every traditional entertainment research provider in our path but were the fastest-growing research company in the world. 

How did we do it?

What did we learn about scaling so that, unlike our competitors, we could grow quickly by expanding into other sectors while also remaining flexible and agile enough to respond to the sectors we already served? By the creation of structured empowerment systems. Instead of holding people accountable for following specific processes, we held them accountable for results.

Research has demonstrated that structural forms of empowerment tend to enhance both individual and team resilience, which provides the perfect environment for scale while also driving organizational resilience. A common assumption is that, in challenging times (such as attempting to unseat a competitor or warding off competitive threats), authority needs to be centralized to enhance organizational resilience. I’ve found the inverse to be true; that structural empowerment positively affects both a company’s ability to scale as well as organizational resilience. This effect is contingent upon a climate of psychological safety as well as an executive team’s sustained commitment to structural empowerment. Organizations can effectively enhance their resilience by empowering their members, thus also challenging the common wisdom about centralizing power, particularly in adverse times.

Many assume centralizing authority increases resilience. But what most positively affects scaling and resilience is psychological safety and executive commitment to empowerment.

Interested in learning more about how you can use structured empowerment systems in your own organization to compete with fast-growing disruptors? Check out this podcast from HBR on Strategy: https://hbr.org/podcast/2023/09/how-to-compete-with-a-fast-growing-disruptor