Disruptive Innovation may be Dangerous
Disruptive innovation is any which sets out to change the goal posts for an established operation. Focussing on disruptive innovation has the potential for a small organisation to make strong headway even against a strong, large incumbent. The mechanisms by which this occurs are usually twofold:
Firstly, a product or service is disruptive if it serves a segment that incumbents don’t want. Generally, this is for a financial buy drugs without prescription reason: maybe margins are too thin to make the customer a decent proposition, or else the functionality the supplier is selling is more than the customer can afford. In this scenario, a disruptor with a small cost base is in the position to enter the market with something that’s excellent for the low end market, and use this as a beach-head for expansion upward. Practically speaking, an incumbent supplier is pretty much unable to respond because their cost bases are optimised to serve high end customers. This form of disruption is the model that was pioneered by South West Airlines and Ryan Air.
Secondly, disruptive innovation occurs if the incumbent provides a product or service which is much more capable than the customer needs. In this scenario, customers are paying a premium, but not getting any value, so a disruptor is able to offer a product that does less whilst undercutting the price of the incumbent. In this instance, the incumbent is also unable to respond, because they have to continue to provide all their features to the high end or lose their best customers altogether. This is the scenario that Microsoft has found itself in, now that most of its customers use 20% of the available functionality of its Office product.
Naturally, it is good to do some disruptive projects if you are running an innovation programme and the opportunity to do so is available. However, there are two things that its essential to watch out for. The first is the amount of time disruption takes: market wide changes do not happen overnight. The processes involved in upturning an established competitor can take several years. Therefore, if an innovation team wants to do disruptive things, it must first ensure it has enough successes under its belt to keep on going until its projects begin to pay off. As a general rule, most innovation teams are fired after 18 months because they don’t deliver quickly enough, but the fact of the matter is that disruptions often take much longer than that.
The second reason it can be unwise to focus on disruptive innovati generic drugs online pharmacy on at the start is the temptation to disrupt current, internal business. Now, its inevitable that innovators will spot opportunities they wish to pursue in their organisations. The problem, however, is that those responsible for those businesses will fight tooth and nail to prevent any innovation on their turf succeeding, because they know that doing anything else will have them out of business themselves.
This is rational behaviour. Most line-of-business managers spend their time working out how to prevent anyone affecting their businesses. The most sensible behaviour for a manager in this position is to make sure what worked in the past continues to do so.
Innovators, though, spend their time designing new futures for their organisations. This will come to disruptive innovation at some point.
The key to success, of course, is an innovation team is mature and with a long history of success behind it before it starts doing disruptive things. It needs to have this track history because it must prove that what it is doing is actually a positive outcome for the organisation. Otherwise, powerful stakeholders will have few choices but to do everything they can to “take out” the “cowboys
Could disruptive innovation be a tool for your organsiation? If so, review James A Gardner’s free online innovation book that has further advice you may find useful.