Business is getting disruptive. The more disruptive your business, the more investors are likely to bet on you. What’s it about disruption that is getting so much mind and money behind it?
Innovator’s DilemmaWhy are huge companies falling like a pack of cards as new start-ups that do not have even a quarter of the financial strength spring up out of nowhere? Is it because they lack innovation?
One of the best works on the subject is The Innovator’s Dilemma by Harvard Business School professor Clayton Christensen. In his book he talks about how some of the best companies do “everything right” including innovating, yet they lose market leadership to the newer ones. Disruption, as opposed to incremental/supplementary innovation offers radical benefits. Interestingly, Christensen is seen as an authority on disruptive innovation. Forbes writes about him: “Everyday business leaders call him or make the pilgrimage to his office in Boston, to get advice or thank him for his ideas”.
Beyond Market ResearchDid Edison disrupt the candle and lantern industry or did he innovate something that has benefited billions across generations? Did the market research suggest something to him which then led to the light bulb? Probably not. As Christensen says, “No one can tell from market research what the early markets will be”. Neither customers nor consultants can really know if the new idea will do well. For instance, how can the customers tell if they would use a driverless class in India when they haven’t seen or used one?
Level of Disruptive InnovationNo problem can be solved from the same level of consciousness that created it. This oft repeated quote by Einstein fits in well when it comes to the level of innovation. What is the level of innovation? Is the level of innovation happening at a new consciousness or is it the existing level of how things are and basing the future on that.
Levels of Innovation Christensen talks about three types of innovation:
Market creating innovations — These are innovations which are disruptive in nature. For example, iPhone, iTunes, digital cameras.
Sustaining innovations — These are innovations that make existing products better. Interestingly, Christensen doesn’t consider Uber as disruptive but as a sustaining innovation.
Efficiency innovation — Maybe something like Big Bazaar, in which you are doing more with less.
Caution with Disruptive InnovationAccording to HBR, “The theory of disruptive innovation has proved to be a powerful way of thinking about innovation-driven growth.” For those ready to jump to any and every innovation as “disruptive” please hold your horses and read what HBR goes on to say: “Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. They use ‘disruptive innovation’ to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage.”
Unfortunately, “disruptive innovation” is no ISO standard that guarantees success. Interestingly, Edison had no theory to back him, yet his invention simply disrupted the industry.
Mehrotra is an author and columnist. He can be contacted at puneet90@gmail.com
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Puneet Mehrotra is an author and columnist who loves inspiring people and writes on business and technolog
