The Value Of Disruption

While some mergers and acquisitions work better than others, there are many circumstances when an acquisition can accelerate growth and financial success for the acquiring entity, especially in a “disruptive” business model.

For most of us the term “disruptive” has a negative connotation – disrupting the workplace, disrupting a family event or disrupting one’s peace and quiet.  In this context, however, “disruptive” takes on a very positive meaning.  The most reliable sources of unexpected growth in revenues and margins are disruptive production and business models.

What does it mean for a healthcare company?  Very simply, it means that often relatively lean and innovative companies that are acquired can galvanize the acquirer and lead to significant growth.  If the acquirer can view this disruption with positive potential it can lead to:

  • A recalibration of existing management practices for the acquirer.
  • Exploration of new opportunities “up market” for the acquirer.
  • Significant growth in equity for the acquirer.

The opportunity for an individual employee to lead this process is often missed.  Some “disruptive” employees are actually extremely creative and insightful.  The task is to integrate the disruption to improve a company’s future prospects for growth.