First they ignore you, then laugh at you, then they fight you, then you win.Mahatma Mohandas Gandhi
Every strategist I have talked to recently is talking about disruption. “We need to disrupt the industry, our innovation program needs to identify disruptive products”, and so on. So what does that really mean?
Every product and engineering team seems to think it is innovating to achieve systematic “faster, better, more cost effective” improvements in products and services. But is it?
Clayton Christensen, a leading thinker on innovation, describes two kinds of disruptions in his Innovator’s quandary. The first is a low-end disruption which comes from the introduction of a more practical, less expensive or more convenient alternative to a current product or service. The second is a new-market disruption, which comes from the introduction of a product or service to address a market that could not be served previously.
What’s common about both of these types of disruption? Typically, the people who are already in the market, the incumbents, have business systems, structure, product and service models that make these markets unprofitable to serve. They just can’t seem to build the product or service that this market needs and still make money. Moreover, the incumbents accept that this is the state of the market, they have done the proper market segmentation, and they are happy to lose that segment of customers, products and services to the disruptor.
Having reflected on this for some time, I finally figured out that merely having a better product or service was not necessarily disruptive, if it could be easily matched by an incumbent. The key to disruption is that the incumbents either ignore the customer base, until it’s too late, and the disruptor has moved in and is serving them well, or the incumbent has found it so unprofitable to serve the market and cannot change their business model to match the disruptor.
If you want to disrupt, don’t just focus on making your product or service “faster, better, more cost effective”, make it easy to ignore and hard to match!
What do you think?