Creative destruction is reshaping businesses large and small. In some cases, the phenomenon is shaking up entire industries.
Media, for instance, is undergoing seismic sea changes that haven’t subsided yet, and we’ve all lived through the significant impact on the marine sector caused by severe economic contraction.
Down the road, however, the potential effect of major demographic shifts on our industry could be even greater, especially if we just sit still and continue with a business-as-usual strategy. Hunkering down is not an antidote to creative destruction, which like a 100-year flood or major hurricane can breach even the sturdiest of ramparts. If we needed a wake-up call, the recent Growth Summit in Chicago sounded a clarion call.
The weekend edition of The Wall Street Journal (Jan. 7-8) had a story describing how only a tiny fraction of American corporations “live” as long as a typical American. Most large U.S. corporations don’t reach the age of 40, according to a research paper the newspaper cited.
The author poses the question: How can companies innovate fast enough to survive in this age of “rapid disruption?”
How do you sidestep the so-called “terrible toll” wrought by innovation? In part, those who have done well are typically “ruthless about change,” according to the story.
In an opinion piece on lessons from the Great Recession, Correct Craft CEO Bill Yeargin reminds us of the importance of new ways of thinking. “Survival requires transformational change, which requires paradigm shifts,” Yeargin writes in the upcoming issue of Soundings Trade Only. “Paradigm shifts are not new ways of doing things; they represent new ways of thinking. Transformational thinking requires a willingness to kill the sacred cows. … Transformational thinking requires thinking big — really big.”
Easier to talk about, certainly, than to put into practice. Just what does transformational thinking look like?
I recently watched a short video about a new process of testing hull models that the M Ship Co. developed. It struck me as just the sort of “new thinking” that Yeargin and The Wall Street Journal story addressed.
The Rapid Empirical Innovation process takes testing “out of the box of traditional tow tanks to quickly and accurately evaluate valuable design concepts that otherwise would lie dormant and unexplored,” according to M Ship’s website. This process is faster and more cost-effective than traditional tank testing, says the company, which has offices in San Diego and Newport, R.I.
I first became aware of M Ship and its unique hull designs several years ago when we published a feature story on the company in Soundings, the consumer boating magazine. M Ship designs innovative vessels for the commercial, military and recreational markets.
Click play below see the company’s dramatic M80 Stiletto, which at 80 feet is the largest carbon fiber vessel in the U.S. Navy. The big sophisticated monohull (with a central displacement hull flanked by planing tunnels and “rigid skirts”) has a beam of 40 feet, draws a scant 3 feet and is capable of speeds of 50 knots or more.
The company says an entrepreneurial spirit and the willingness to take risks drive innovation at M Ship.
“Innovation is the keystone of our business,” M Ship CEO and co-founder Bill Burns told me. “It permeates all aspects of our operation. It’s the advantage that allows us to compete with the big players in the defense industry. … When I walk through some steel shipyards today, I feel like I’m walking back in time to visit a living and breathing dinosaur of the industrial age.”
The Wall Street Journal article said companies that fall victim to creative destruction “tend to be bureaucratic, play too much defense and try to catch up too late by lurching into huge acquisitions.” The story concludes with a reminder of the significant but often overlooked role that plain old luck plays in corporate success.
The colorful New York Yankees pitcher Lefty Gomez used to say, “I’d rather be lucky than good.” These days, companies have to be both.