First Mover vs. Disruptor How Would You Change HR if You Could Start From Scratch

How does the conventional wisdom go? First-mover advantage in business is key, right? Be the first to market and build a solution or product that’s good enough, and to the victor go the spoils. Combine first-mover advantage with some barriers to entry for potential competitors, and you’ve got a market position that has cash cow written all over it.

Without question, first-mover advantage is great to have. However, I’d offer this alternative view: The first-mover advantage can and will diminish over time, especially as that nimble approach/solution you started with grows into a legacy battleship that’s hard to move and vulnerable to the disruptor.

More on the HR connection in a moment; first, what does a “disruptor” look like?

Case in point: Microsoft Money vs. Mint.

I’ve been a Microsoft Money user for at least five years, using Money to track my finances and do budgeting for our household. Unfortunately, 2009 was so busy I didn’t use the product at all.

One of my resolutions for 2010 was to get back on the budgeting front and understand where our money was going and to save more. So I fired up my copy of Money on a home laptop and proceeded to attempt to load up the first three months of transactions for our household in 2010.

What I found out shocked me. Microsoft Money has been discontinued. No more downloads; too much competition.

Too many competitors like Mint.com who changed the game.

While Microsoft had a nice run at the money management segment, their advantage (No. 2 market position after Quicken, but tons of market power in the personal finance segment) faded over time.

Their solution was based on the local license model, whereby you had to install the software on your PC. As the complexity of their solution grew, it became hard for the end user to maximize. Usability was also an issue given the fact that you couldn’t grab your account from any computer like Gmail and other on-demand services.

Enter Mint.com. Mint is a Web-based personal finance solution. There’s nothing to install, with your account being on-demand from any computer you need it to be. That’s two things Money was not: free and simple.

After Money shut down, I remembered the glowing reviews I had seen of Mint and opened an account. What I found was an interface that was simple to use, and while Mint had only 50 percent of the features of Money, it easily had 90 percent of the functionality I needed, including an iPhone app.

Mint’s a great example of a disruptor that was able to overcome the dominant market advantage of a giant like Microsoft. Change the game dramatically enough with your solution and make it simple yet functional and you’ve got a shot to unseat the first-mover who’s printing cash and unable to turn the battleship as quickly as you.

And that serves as a nice transition to the HR focus of this column: If you were going to disrupt the first-mover advantage of the traditional HR practice, what features would your new solution (we’ll call it HR Disruption) have?

If I were building it, HR Disruption would include the following features:

• I’d make sure every HR manager and up (director, vice president) had recruiting in their active skill set. The best way to get the respect of the line manager is to find the talent they don’t have the time or the will to identify and secure on their own. HR Disruption would have a lot of features to enable higher-quality results when it comes to talent acquisition.

• I’d design HR Disruption so it was non-negotiable that a substantial investment was made in managerial skills over the first two years of a new manager’s career. I don’t mean a couple of classes at Dale Carnegie. I mean a $30,000 to $40,000 investment in the new manager’s ability to communicate, motivate and draw higher performance from his/her team. Without question, some folks would use HR Disruption for a few years and then leave, but trust me, once word got out that HR Disruption had this training feature set, my turnover over time would go way down.

• I’d design HR Disruption so it was non-negotiable that a substantial investment was made in career planning for team members, regardless of whether it resulted in that career path taking them away from my company—same product strategy as the managerial skill training outlined above. We hire new team members at a brisk pace, put them through some onboarding and then expect them to figure out what they want out of the next five years of their career. No wonder people leave us at times for inferior products/companies. They’re just flailing about, trying to find the right fit. A robust career planning model would fix that pain point.

• I’d design selection practices so that the capacity to coach (or capacity to learn how to coach) was the first priority when promoting an individual contributor to a manager role, not subject-matter expertise. What’s the most important role of the manager of people in your organization? Coaching for performance, of course. I’d design HR Disruption to include screening tools to tell me which managerial newbies had the capacity to coach with the right training and tools, then I’d hire those people even if there were candidates with stronger technical skills available in the same selection pool.

That’s my list of how I would disrupt the HR battleship, if I was designing a new HR product offering/service model. What would you do if you wanted to be the Mint.com of HR?

There’s good news, should you decide to pursue the role of the disruptor, when it comes to the traditional HR practice. Established products (in this case, traditional HR) will laugh at you initially, then they’ll start to become reactive once they see your solution gaining traction.

That means you might not get a chance to change the world, but you might get acquired. Mint.com got acquired in 2009 by Intuit (makers of the No. 1 personal finance software, Quicken) for $170 million just two years into operation.

You might not make $170 million, but disrupt the HR game in a meaningful and visible way and you can bet there’s someone out there willing to snap you up for a fresh look at the HR game.

What are you waiting for? Disrupt!

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