Concept of ‘Disruptive Innovation’ is Being Disrupted– Reasons to Believe, Reasons to Doubt: Innovator’s Dilemma…

Disruptive innovation is one of the most important, major business theories of the last two decade…. it’s an inevitability of business… a core concept of innovation that helps create new markets, new value networks, and eventually disrupts existing markets, value networks– it’s a competitive replacement concept…

It’s both a source for driving new innovations, and a challenging risk-factor on how to manage… It’s interpreted as many things; new technologies, creative business models, novel supply chains, evolving modes of media, cross-overs from other industries… and all these innovations have the power to affect or even derail a business…

Disruptions is ubiquitous and can come from just about anywhere, e.g.; known competitors, unknown entities, foreign companies, supply chain players, partnerships of multiple groups… and, all companies are susceptible to disruption– across all industries, at every scale and in both, strong and weak players… Some companies play the role of the disruptor, while others are caught off guard by disruptions in their space…

Disruptions get their power from the element of surprise, unexpected and from breaking industry norms… However, the use of the word ‘disruption’ is an enigma; it’s always had straightforward business definition, but then people began applying it to many different things to which it had absolutely no connection whatsoever…

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According to Matthew Yglesias; the word disruption has become an all-purpose technology industry buzzword; overused, barely understood, drained of meaning… It’s a shame, because while all innovation is great, the idea of disruptive innovation as a distinctive kind of innovation has real value… Everyone wants to be a disruptor, but there’s nothing uniquely virtuous about disrupting, either as a way of changing the world or as a way of getting rich… The moral of the disruption story is really about transformation… but, turning ‘disruption’ into an all-purpose tech buzzword obscures its importance, while simultaneously distracting innovators from real opportunities…

In the article Harvard’s Silly, Dreary Innovation Debate by Robert J. Samuelson writes: By their nature many innovations are disruptive… You might think that this is so obvious that no one could debate it: Wrong… We have two Harvard professors engaged in an intellectual food fight over ‘disruptive innovation’..  On the one side is Harvard Business School professor Clayton Christensen, who coined the term ‘disruptive innovation’ in his 1997 book ‘The Innovator’s Dilemma’… Since then, he has become a popular management guru…

On the other side is historian Jill Lepore who in a 6,000-word article for the New Yorker Magazine denounced Christensen’s theory as overblown and based on weak evidence.  Let’s start by noting that Christensen’s theory is not especially original; it’s mostly an updated Schumpeter. That’s Joseph A. Schumpeter (1883-1950); Austrian-American economist who described ‘creative destruction‘; as the essence of capitalism. Competition under capitalism, he argued, is not fundamentally about the price or quality of similar goods. It concerns the race to discover new technologies and ways of doing business that expand the range of available products, change daily life and destroy existing industries… Old habits and companies fail and fade, and  new ones take their place…

Christensen expanded Schumpeter by classifying innovations as mostly new technologies– as either ‘sustaining’ or ‘disruptive’… Sustaining innovations improve existing products and technologies; whereas, disruptive innovation threaten established companies, products, business models… Christensen’s popularity among many corporate managers, reflect their sense that he understands their plight, where many feel besieged by disruptive innovations…

So what’s Lepore’s gripe? In her article, she disputes Christensen’s theory can predict which innovations are disruptive, and therefore requires management attention. Indeed, she argues; disruptive innovations aren’t always fatal to old-line firms, which ultimately they adapt to the new challenge…

Interestingly, she cites several of Christensen’s case studies in which incumbent companies should have failed by his logic, but didn’t. As a tool for identifying disruptive innovations, his theory is of little practical value, she suggests… This may be true– when a technology or management technique is new it’s almost always hard to visualize the full implications, and even its boosters may not be able to grasp its full potential…

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But apparently, Lepore’s real complaint is that ‘disruption’ is now corporate gospel: Disrupt or be disrupted… Worse, faith in this gospel has spread to arenas whose values and goals are remote from the values and goals of business… These include; public schools, colleges and universities, churches, museums and many hospitals… All these institutions– businesses and non-businesses alike are being subjected to self-induced upheavals justified by Christensen’s shaky theory, she says…

OK; fair enough… then, is it that Lepore dislikes MBA-thinking and its spreading influence… though her evidence of its spread is as flimsy as Christensen’s for his theory… As important, in her effort to discredit Christensen it seem as if she is playing down innovation’s capacity to– destroy and disrupt. Surely, she could not have intended this, and barely mentions Schumpeter… Hence, the ‘Harvard Innovation Debate‘ is a dud: No one wins… Innovation is less controllable than Christensen hopes, and more upsetting than Lepore implies…

In the article Big-Bang Disruption by Larry Downes and Paul F. Nunes write: The strategic model of disruptive innovation we’ve all become comfortable with has a blind spot: It assumes that disrupters start with a lower-priced, inferior alternative that chips away at the least profitable segments, giving an incumbent business time to start a ‘skunk-works’ and develop its own next-generation products… However, we’ve learned that in many cases, disruption can have a different profile– it may not have come from competitors in the same industry or even from companies with a remotely similar business model; nor did the new technology enter at the bottom of a mature market and then follow a carefully planned march through larger customer segments…

But, in fact, its impact can be much– greater, swifter… whereby customers switch in a matter of weeks, and it’s not just the least profitable or ‘under-served’ customers who are lured away…  These innovations change the rules of the game. We’ve seen mature products replaced by new technologies and ever-shorter product life cycles… but not the replacement of entire product lines or whole markets being created or destroyed overnight… We’ve learned that disrupters can come from nowhere and instantly be everywhere. Once launched, these disruption are hard to fight– they are game changers, or ‘big-bang disrupters’… They don’t create dilemmas for innovators; they trigger disasters… In this new era, strategy needs rethinking…

In the article Plan for Disruption, Save Your Business by Scott Raskin writes: We’ve seen disruptive innovations out-maneuver businesses of every type, completely obliterate entire industries and generate exorbitant amounts of revenue at breakneck rates… It’s intimidating fate for many organization but nonetheless reality… The anti-dose is to take action now or someone will do it for you… Every business is familiar with the ‘S-curve cycle’. It essentially assumes that after a start-up phase, a rapid increase in revenue occurs, and is followed by an eventual decline…

In the best-case scenario, successive curves will follow to continue the growth of the business in an upward direction. History tells us that these cycles take a considerable amount of time to complete, but like most other areas of business, today’s fast-paced and collaborative world has altered the norm considerably… In light of companies that are disrupted, or failed at disrupting, or ultimately forgiven for disrupting badly; it makes sense to say the best time to take action is when you’re ahead… A good dose of ‘paranoia’ can go a long way… by keeping alert, thinking differently, always be prepared to pivot when needed with course correction and business agility…

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Disruption in business is common occurrence… According to John Hagel; it’s typically brought about by one or more players adopting a different approach to a market or arena, which represents a significant challenge to the established position of existing participants… Disruptions turn the assets of incumbents into potentially life-threatening liabilities… and the result is that– markets, industries… leaders are being toppled with much greater frequency…

Perhaps some of this may be the result of incompetence, mistakes made by senior management, but to explain away this increasing trend, one would have to believe management is becoming significantly more incompetent over time… and, it’s also clear that some of the toppling is the result of the natural process of market competition… But, as Joseph Schumpeter famously observed, markets are a powerful engine for ‘creative destruction’— they invite competitors with a better idea or a better approach to come in and challenge incumbents; it happens all the time

According to Jeffrey Phillips; disruption has always existed, companies have always needed to prepare for it or get subsumed by it.  The concept of disruptive innovation is not a natural law, it cannot be simplified into equation of known dimensions– it’s more directional, notional, but no less valuable from a strategic perspective… in the innovation space everything is fungible, poorly defined – there are few absolutes.

According to Scott Anthony; the word ‘disruption’ carries a lot of connotational heavy baggage.. So heavy it distracts people. This weight creates an, either/or– you’re; disruptor or disrupted… According to Renee Hopkins; the language of disruption is a language of fear and anxiety. It distracts you from a bigger conversation about innovation, which has become such a big-tent word that it’s almost meaningless… It also distracts from the practical considerations of growth, transformation…

Sadly, focusing on just disrupt-or-be-disrupted can cause you to lose sight of the very thing you ‘should’ be focused on, i.e.; true disruption comes from the business model; how organization– creates, delivers, captures value… The business model is where growth, progress, and transformation starts… focus on creating a solid, workable business model…

According to Irving Wladawsky-Berger; companies must ask tough questions about their– technologies, markets, business models, competitors… shifting customer dynamics… how best to respond to new trends and technologies… The answers to these questions and the ensuing actions you take, can spell the difference between being severely disrupted, or turning disruption from a threat to a competitive advantage…