Most of the companies that have disrupted an industry did not set out to replace it. They took one part of what customers had always done, separated it from the rest, and did that one part far better. That separation is called decoupling, and it explains more about modern disruption than any single technology.
The customer value chain
The customer value chain is every step a business takes to create value and deliver it to a customer: developing the product, marketing it, selling it, delivering it and looking after the customer afterwards. For a long time one company owned most of those steps, and customers had to take the whole chain or none of it.
Decoupling breaks that chain. A newcomer picks one link where customers are frustrated, takes it over, and leaves the rest to the incumbents. Technology made this possible by making it cheap to reach customers directly, at the exact point where they want something.
Where it has happened
| Industry | What was decoupled |
|---|---|
| Retail | Choice and delivery, separated from the physical shop |
| Television | Watching, separated from the broadcast schedule and the cable subscription |
| Banking | Payments, separated from the bank account and the branch |
| Hospitality | A place to stay, separated from the hotel |
| Transport | A ride, separated from the taxi company |
| Music | Listening, separated from owning the recording |
In each case customers did not abandon the old industry overnight. They simply stopped paying it for the one link the newcomer did better, and that was enough to change the economics of the whole chain.
Finding the link in your own business
Start with the frustration. Surveys, conversations and your own records will show where customers wait, pay for things they do not want, or go elsewhere for one part of the job. Those are the weak links, and they are exactly where a competitor will attack.
Consider new models. A subscription turns a single purchase into a lasting relationship and steady revenue. An on demand service delivers exactly when and where the customer needs it. Both are ways of owning one link better than anyone else.
Let technology carry the weight. Good data shows you which links customers value. Automation removes the routine work, so that your people can spend their time where the customer notices it.
The risks
Decoupling is not free. A business that separates its links must still make them work together, so that delivery, stock and customer service do not fall apart in the gaps. And once one link has been decoupled, others will follow, so competition intensifies. The answer is not to copy whoever disrupted you. It is to keep finding where you add value that nobody else does.
The question for every business
Look at your own chain from the customer's side and ask which link a newcomer would take from you first. Then decide whether to make that link so good that it cannot be taken, or to decouple it yourself before someone else does.
Seeing your business from the customer's side, link by link, is where strategy starts. It is the conversation the group has with every client before any of the companies begins work.