Embrace Creative Destruction

In today's world, it seems like every negative word has a positive adjective to tone down its effect. I like to think that it really means there's a silver lining in every cloud though adding 'Christian' to a word does not make it holy. Anyway today we're talking about creative destruction as a driving force for entrepreneurship.

Just to fulfil all righteousness, entrepreneurship is officially defined as setting up a business or businesses. The definition we usually don't bother to find out about is 'business'. What is a business? It's a person's regular occupation or trade or simply put, a commercial activity. Our last definition for now is creative destruction - that is a little more technical. Creative destruction basically refers to the process through which something new forces whatever existed before it out of the market.

It's simple really -

Take the typewriter and computer for example. The introduction of the computer almost completely eradicated the use of the typewriter because the computer performs the same basic functions and more - raising productivity for many. The organizations investing in the typewriter at this point certainly lost out.

Another example is the Compact Disc innovation (DVDs and VCDs) which resulted in the creative destruction of Video Home Systems (VHS) and those small windable tapes we used to play in radios. I hope you get the concept now.

Creative destruction though does not necessarily have to be something to dread because it cannot be avoided. It is a major driving force for innovation.  The concept of creative destruction  states that innovation causes failure, but that failure, in turn, creates more innovation. For example, as a business owner of XYZ Transport Services, I bring forward the idea of travelling interstate on bicycles and the invention of a car makes the bicycle go out of style - that's a form of creative destruction. However, this forces me to create another innovation - buses that carry more people and  are definitely cheaper in the long run!  This is considered one of the most important concepts in capitalism.

As the world is becoming increasingly global, we cannot afford to sit back and let it take care of us. Every individual should have an entrepreneurial mindset. Entrepreneurship involves creating a different product/service with value devoting the necessary time and effort, assuming financial, social and psychological risks and receiving monetary and personal rewards. Intra brand competition is one way to minimise the effect of creative destruction (we'll discuss intrapreneurship in detail later). Ultimately it boils down to consumer education. Once you have an idea of your target consumers and  the trend among them, you can create a product that will meet their need or a version of your product or service that can satisfy their need yet still drawing them in to participate in the full range of your products.
Take the typewriter and the computer for example - I am the C.E.O. of XYZ typewriters and a new innovation, the computer has come up. Yes, the computer is most likely to overtake the typewriter seeing as its more convenient and efficient. One thing I can come up with is a typing training course which is geared at integrating the computer and typewriter. At this point, the typewriter has not been totally eradicated and starting a course like this can open me to the consumer market - I can find out what they prefer about the computer and what they'd miss about the typewriter and voila! The next creation is born. Work at it and it will work for you. The issue is not eradicating creative destruction because it cannot be totally excluded from the system but how to deal with it minimizing its effects on you as an individual, organisation or state with a focus on innovation, an eagerness to dig deep enough to understand complex issues, with confidence in our dreams and a willingness to take calculated risks.
While change may be very painful, it is the only constant thing in life.  We must all embrace change and learn to create value through innovation - to be entrepreneurs - so that we can move quickly through the pain and more fully participate in the life-changing rewards of the creative destruction process.

At the end of the day though, creative destruction is not necessarily in all spheres of life. There are some essential goods and services that will always be needed. It's a matter of branding and presentation here i.e. the manner or style in which something or someone is introduced especially with an identifying mark or characteristic common to the products of that particular company. Take salt for instance, salt will always be an essential commodity. Mr Tayo sells his salt in small 5g sachets which are sealed and once opened cannot be resealed. Miss Vanessa comes up with 10g sachets which are resealable and not up to double the cost of Mr Tayo's. Mr Tayo then goes back to the drawing board and comes up with plastic containers including covers which can 8g of salt and it is slightly cheaper than Miss Vanessa's. The cycle goes on and on but at the end of the day - creative destruction is only fed by consumer trends.

Creative destruction can cause temporary economic distress. Layoffs of workers with obsolete working skills can be one price of new innovations valued by consumers. Though a continually innovating economy generates new opportunities for workers to participate in more creative and productive enterprises (provided they can acquire the necessary skills), creative destruction can cause severe hardship in the short term, and in the long term for those who cannot acquire the skills and work experience so always strive to get better at whatever you do because no knowledge or skill acquired is a waste.

Okay I'll stop here! I hope we got something in that pool of grammar. Feel free to give your opinions or ask questions in the comments box. Your comment might just help someone!!!

P.S. Sorry there are no pictures today - Next time it's this long, I'll insert some! :D

God's Girl.