When Is Disruption Disruptive?
In layman's terms I think of disruptive innovation as something that challenges the status quo and disrupts the market. It requires traditional market leaders to go on the defensive. However, I know the "legal" Christensen definition is different than that. This article argues the distinction is important.
My opinion is that it is an academic arugument. From within large corporations, the talk of disruption serves to inspire and motivate innovation no matter what the definition is!
Yes, 'disruption' and 'disruptive innovation' are both WAY overused. My simple working definiton is that in order for something to be truly disruptive it must meet two criteria: (1) it must alter/change marketshare in a meaningful way, and (2) that market share gain must be sustainable over time, that it must not simple erode away after competitors have seen it and then try to copy/emulate it.
Using the definition above, Uber looks disruptive. They often can garner up to 50% market share within 12-24 months after launching into a new city. Also, it appears there are no vaible competitive threats to their current position (notwithstanding regualatory issus, self-infliected management fiasco's and the trend towards autonomous vehicles). Contrast this to Tesla, the first ondition above has been met, in that they have meterially shifted market share in the geographnies they enter in the higher end price segments. However, as they come down the cost curve and make ever more affordable cars, it's unclear whether their will be able to survive once Toyota, Volkswagen, Honda, Hyundai and others build EV's at scale in in the USD $25,000 to $40,000 mass market.
If we were looking at the KANO model,
-disruption would be achieved only with revolutionary innovations. With revolutionary innovations, such as smart phones, there two sides to the coin in the terms of benefits - Pros and cons. For this example of smart phones -
Quick access to lots of information
Quick access to people as the phone is with them almost constantly
Minimum of three communication methods available, phone, text and email
Big data has access to collecting your personal trends
The product sex appeal is tremendous - "I just got to have one!!"
Doesn't matter how many are already built, the next upgrade is still desireable
The list goes on....
Much of the information available is misinformation or wrong information
Quick and easy access means there is an expectation that everyone is accessable all the time
The chosen method of communication can lead to miscommunication
Big data can feed you a tighter and tighter focus of information based upon your personal trends
The stigma of not having the latest one can provide markers and division of class
Doesn't matter if the one you still have works just fine, throw this on the land fill, I need the next generation
This list goes on...
So the question was when does this become disruptive, and to what extent is it meaningful.
Sticking with the smart phone example only -
Our lives have changed significantly with the advent of these devices. Our leisure and intimate time is constantly disrupted by these devices. This includes family time, recreation time, dating, etc. Take a look around any restaurant and you will see somebody looking at their phone instead of engaging with the people they are dining with.
Etiquette has changed as well. When having a conversation, it was rude to allow someone else interrupt that conversation. Now, it is the expectation that if the phone rings, dings or pings, the incoming communication takes precedence over the conversation.
Clearly, the business benefits of smart phones are numerous, and the "I just got to have one" factor is high enough to acheive disruptive status. However, there is a cost to our humanity. Like other disruptive innovations of prior generations, new rules and norms will evolve that will help us gain back some of the humanity that is lost.
This is also a product where the end of life question was never properly thought through. There are batteries, and electronic components that are built with toxic materials that need to be properly disposed of. However, there are not sufficient processes in place for the proper disposal so the environmental impact will potentially be largely harmful.
So disruptive? Yes; with pros and cons. Meaningful? Yes; with benefits as well as hazards. The distinction of using the term in appropriately? Im not sure I understand why it matters. Disruptive innovations have been happening since man created the wheel. With new technologies, comes new skills necessary to create, operate, maintain, and dispose of the new product. Training these skills, world wide in our global economy, will probably be the most disruptive part of disruptive innovations.
I will use examples instead of citing literature, as sometimes is easier to visualise...
In FMCG at least, with the term "disruptive" we dont only mean 'impactful', but able to step change consumer habits.
- instant noodles, instant coffee... the whole convenience cupboard
- hair straightners, dry shampoo
- chips tube canisters
and yes, I agree with the comment that they need to be sustainable, which means .... after a "life cycle" (1-2 years?), someone else will figure out how to follow and they'll become a commodity.
I agree with other posts: this is a purely academic argument about the term that has been overused and abused.
There are inventions of products and processes that changed the world as we knew it throughout human history. This is what disruptive innovation means to me.
Invention of wheel, steam engine, assembly line, alternate current, the Internet, electric cars and tecnologies enabling gig economy or online shopping forever changed the way we live. Oreos, not so much (as delicious as they are).
I like to use the distinction that invention creates disruption.
Innovation simply improves an existing system, that is rarely disruptive.
Russ Ackoff described the difference between innovation and disruption as continuous improvement vs discontinuous improvement.
Innovation is the continuous improvement of a system by developing better components.
Whereas invention is about designing a better system.
Companies innovate and fail to disrupt.
They should be inventing and reinventing if they wish to disrupt their industry or the market in general.
Disruption does not mean that automatically a change (for example an innovation) hast to be implemented. Disruption means that an individual or a group take a time-off to avoid a tunnel-vision and analyze the status-quo. A new decision making process starts. The result can be the implementation of a change or also the confirmation that the actual actions are adequate.
Disruptors are innovators but not all the innovators are disruptors. Disruption is destructive but will end with the creation of something completely different as compared with the previous models. Innovation is create value from ideas but it could even just boost the previous ones.