The Value of an Online MBA in Disruptive Business Models

Albert Einstein is often credited with defining insanity as "doing the same thing over and over again and expecting different results."¹ In business, the repetition of old and ineffective methods can prove costly. As Chad Wachter recently wrote for Forbes online, “If you want to stay competitive and relevant, you need to be willing to adapt and evolve as well. This means being open to new ideas, taking calculated risks and experimenting with different approaches.”² To achieve new outcomes, pursue them in new ways.

This upending of familiar, standard operating procedures can be deeply uncomfortable, risky, and rife with uncertainty–so the business world needs skilled, seasoned experts, educated in leadership through disruption, at the forefront of progress.

The strategic management proficiency you’ll gain in an online MBA program is not only valuable but essential in a world that includes disruption of existing business models. Read on to find out why.

To discuss disruptive business models, we start with the term disruptive innovation, which was popularized by Harvard business professors Clayton Christensen (1952-2020) and Joseph L. Bower (1938-), starting with their 1995 article, “Disruptive Technologies: Catching the Wave.”

In business theory, disruptive innovation:

• Creates a new market and value network

— or —

• Enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances³

A disruptive business model is a type of disruptive innovation: one that “presents a new concept to an already crowded marketplace, earning the attention and respect of consumers. Rather than finding its place amongst competitors, a disruptive company creates a new market and challenges other, often more established companies to follow suit or chance getting left behind.”⁴

Disruptive business models create high-stakes situations. New companies looking to drive innovation face nothing less important than success or failure, and established firms must be flexible enough to adapt quickly if they want to stay competitive. In both cases, strategic management plays a critical role.

Writing for the management consulting firm Oliver Wyman, innovator and industry veteran Rick Chavez took this view of strategic management in a disruptive world: “We need a new discipline that embraces change as a fundamental feature, not a flaw … The CEO and other significant leaders need to see themselves as stewards of an ongoing conversation, and not the guardians of a process that enshrines the past in next year’s budget.”⁵

He noted that success today doesn’t come from making, “a single bet on what the future will look like.” Instead, he exhorted business leaders to, “Think a lot less about your existing products, and a lot more about your customers and the problems they need to solve. And put yourself in service of active solutions–ones that wrap around the customer and evolve as their needs evolve.” Acknowledging how difficult that approach can be, he urged leaders to adopt an ongoing process of, “test and revise, test and revise.”⁵

By its nature, disruption is problematic. Technological innovations such as artificial intelligence (AI) and machine learning, for example, seem to advance at exponential speed.

Savvy leaders with an entrepreneurial mindset approach problem-solving by testing possible solutions early, often, and inexpensively. Entrepreneurial thinkers (whether they’re entrepreneurs or not) who follow Chavez’s customer-centric, test-and-revise recommendations can derive significant competitive advantage because they:

• Test ideas and assumptions
• Develop creative ideas
• Are innovative in their leadership and problem-solving
• Rapidly and effectively adapt to new challenges
• Take responsibility for the quality and success of their work

Whether you’re launching a new business model or making an existing business more agile and adaptive, change won’t be easy. With some key tactics in place, however, you can be ready for a smooth, productive process:

1. Take things a step at a time. There’s no need to overhaul an entire established business all at once. Start with small changes and advance to larger ones in the long term.
2. Stay open-minded and willing to listen to new ideas, even–perhaps especially–ones that challenge your beliefs or past successful choices.
3. Balance your openness to new ideas with strategic decisions. It’s important to take well-informed, thoroughly considered, calculated risks.
4. Make flexibility one of your strengths. Recognize that change is unavoidable and stay ready to adapt as new developments arise.

Fortunately, you don’t have to forge ahead in the business world on your own. A strong online MBA program from a respected business school will prepare you for leadership through uncertain, disrupted times. To be a true Master of Business Administration (MBA), you need fluency not only in the nuts and bolts of business–finance, marketing, data analytics, and so on–but in far more than that: You have to be able to read disruptions accurately and respond to them productively, through strategic choices.

As you consider which online MBA program will best position you to succeed as a business leader, insist on a management education that includes, for example, courses in these areas:

• Leading People and Organizations
• Strategy
• Challenges in Leading and Managing Strategic Change
• Strategic Talent Management
• Change Management: The Practice of Leadership
• Entrepreneurship
• New Product Innovation

What does the successful embrace of change look like? Consider these examples, in which emerging technologies necessitated business model innovation:

Launched in 1997 as, primarily, a DVD rental service, Netflix soon faced a new reality of the digital age: the growing strength and popularity of streaming technology. The company adapted, shifting its business focus to online streaming. It now has more than 200 million subscribers globally⁶ and, in 2023, it announced the sunset of its DVD rental option.⁷

It may be hard to imagine now, but when Jeff Bezos founded Amazon in 1995, it was an online bookstore.⁸ With growing clarity about the potential of e-commerce to meet customer needs, however, he worked to expand the company into its near-ubiquity today, as it provides a vast array of products and services. One of the world’s largest retailers, Amazon boasts a market capitalization of $1.456 trillion as of September 2023.⁹

Centered in the heart of Silicon Valley, Santa Clara University’s acclaimed Online MBA program features a robust curriculum designed to instill thorough, insightful business expertise. Led by an expert faculty of seasoned industry veterans, it provides the flexibility of online learning: You can study from anywhere, on your schedule, without interrupting your professional or personal commitments.

To find out more about how the Online MBA program from the Leavey School of Business can expand your network and enrich your career, make an appointment to talk with an admissions outreach advisor today.