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Component Manufacturing dverti$er
Adverti$er
Don’t Forget! You Saw it in the
February 2018 #10223 Page #46
Disruptive Innovation with LBM/Component Companies
O
ver the years, our industry has seen a lot of innovation in how we handle materials, how we manufacture, and how we take a house from an idea to a component using the computer. But, over the past few years, we have seen an acceleration in big ideas, disruption, and what we can do using technology developed in ours and other industries. Are you creating your own disruptive innovation in your market?
Ben Hershey, CEO & Coach 4Ward Consulting Group, LLC
Disruptive Innovation You have probably heard the term, “industry disruption”—“a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses.” But, have you given consideration to how you can create your own disruption? For the past 20 years, the theory of disruptive innovation has been enormously influential in business circles, and it has proven to be a powerful tool for predicting which industry entrants will succeed. We have seen it in our industry in several different ways; and this is just a short list: o How we deliver material to a jobsite o How we cut material, both wood and EWP o Whole house testing we conduct at the Structural Building Components Research Institute (SBCRI) o Automated equipment used in our component operations (saws, tables, etc.) o Incredible advances in our software for order processing, layout, and engineering o Robotics use in gantry and framing tables and material handling Some of us, like myself, who have been in this industry for life can look back and see the leaps we have taken and the incremental effect on our businesses. I was one of those who was doing cutting lists for the plant in Junior High using a slide rule or a Smoley’s table. The theory of disruptive innovation has proven to be a powerful way of thinking about innovation-driven growth. Many leaders of small, entrepreneurial companies praise it as their guiding star. Classic disruption entails—a small enterprise targeting overlooked customers with a novel but modest offering and gradually moving upmarket to challenge the industry leaders. Companies like Uber or Amazon are commonly hailed as a disrupter. Some of the traits of disrupters include focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality—frequently at a lower price. Incumbents, chasing higher profitability in more-demanding segments, tend not to respond vigorously. Entrants then move upmarket, delivering the performance that incumbents’ mainstream customers require, while preserving the advantages that drove their early success. When mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred. Continued next page PHONE: 800-289-5627
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