From Apple and Amazon to Netflix and Uber, the business landscape is littered with companies that thrive on being disrupters in their industries, and quite frankly, in most of our lives. The ability to enter a market, or create a new market, through innovation and become an established brand or industry leader is the ultimate prize. Yet, it’s also a moving target as there are always others looking to disrupt what you’ve disrupted.
According to Heather Simmons, author of “Reinventing Dell: The Innovation Imperative,” “Those who disrupt their industries change consumer behavior, alter economics, and transform lives.”
At Any Lab Test Now, we have been the disrupter and the disrupted and have benefitted from experiencing both. Even before Harvard Business professors coined the phrase disruptive innovation in 1997, Dr. David Perlow brought the new concept of direct access lab testing to consumers in the Atlanta area in 1992. The company has established itself as an industry leader. However, there are always new companies and technologies looking to up-end the industry. As leaders, how we deal with disruption is what will differentiate us, propel us, or result in us being left behind.
Our entire business model, right down to our tagline, “Take Control of Your Health,” was an early disrupter in the world of lab testing. Instead of waiting, and hoping, a doctor would order expensive lab tests you needed or wanted, consumers had the ability to be in control and go straight to a lab, walk in, and order everything from a blood draw for a marriage license, to HIV, drug and alcohol testing, or medical panels and screenings for things like cholesterol or diabetes. The consumer demand, from both individuals and employers, was clear and ALTN’s growth trajectory was on course.
The company’s second big disruption was about 10 years later, when Dr. Perlow took the direct lab testing concept into the franchise industry. At that time, franchising was traditionally food service, retail, or other service models. Our unique health care concept was new to the franchising industry, but quickly became the number one brand in the lab testing franchising sector. Our franchisees enjoy being catalysts of change in health care and giving consumers the ability to take control of their health.
Deal with Disruption
Of course, the only constant is change, and we see that in our industry every day. One of the biggest disruptions in recent history came in the form of the media darling known as Theranos, and its now-disgraced founder Elizabeth Holmes. The health technology company, which claimed to be able to run lab tests from a drop of blood at a fraction of the cost of what we could offer, was alarming. The technology was disruptive, and the price point was disruptive. Here’s how we handled it:
- Take threats seriously. Putting your head in the sand helps no one. Stay abreast of what is happening in your industry. We openly discussed the potential disruption at our annual conference.
- Do homework. I visited a pharmacy in Palo Alto, California, to experience the potential disrupter first hand. I wanted to see what the experience was like for the customer, and the pharmacy was their point of contact. It quickly became clear there was little to no customer service. The verdict was still unknown on the technology, once the customer could get service.
- Model out the impact. Look at the potential impact from all angles before determining how you will respond. Work as a team, not alone, to decide if and how your business strategy will change.
- Act on quantitative data — not fear. With the rough numbers I could access, I had a sense things didn’t “add up” and that this disrupter was a PR-engine with little substance, which turned out to be true. But we weren’t going to slash prices, we were prepared to weather the storm.
- Counter with a value proposition. Differentiating ourselves within a disruptive phase was a key part of our response. Messaging is constantly under review to make sure our customers understand what sets us apart.
The expose of Theranos as a fraudulent company disarmed the disruption in one sense but also helped us, as it shone a brighter light on lab testing. We know other disrupters are on the horizon and we think disruption can be a good thing.
Maybe next time, it will be us!