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Discussion Point: What's the Deal with Disruptive Innovation?

Thumbnail image for discussion-pointHow often do you hear someone call something disruptive, innovative or transformational? Probably more often than you'd like.

Disruption has been one of the most pervasive buzzwords of the past few years. And now it's become even more ubiquitous, thanks to debate between Harvard historian Jill Lepore and Clayton Christensen — the Harvard Business School professor who coined the term "disruptive innovation" more than a decade ago.

In a controversial article published by The New Yorker, Lepore made an unprecedented accusation against the quality of Christensen's research. Lepore accused Christensen of cherry-picking industries to force data to fit into his theoretical model.

The theory maintains that established companies are vulnerable to upstarts who find ways to do things cheaper, often with a new technology. In Christensen's words, "As companies tend to innovate faster than their customers’ needs evolve, most organizations eventually end up producing products or services that are actually too sophisticated, too expensive, and too complicated for many customers in their market."

At that point, an aggressive start-up with a cheaper, simpler product can topple an industry leader. You can get a more complete explanation here — and see how rapidly the phrase disruptive innovation has saturated business conversations by looking at the chart below. In the past three years alone, there has been a flurry of books, reports, speeches, conferences … all centered around the idea of technological disruption.

Just this week, the CTO Forum, an organization for senior technology executives and business leaders, released a complimentary e-book titled "Rethink Disruption." Focused on emerging technologies that are "truly transforming business and society," you can download it here.

The e-book notes: "Disruptive technologies cut both ways. They propel their creators to the forefront of their markets and can quickly topple incumbents that didn't see them coming." Don't try to tell that to Lepore.

So back to the debate. Christensen claimed Lepore had quoted "evidence" out of context, without taking into account all the other research that had been carried out since publication of his1997 book, "The Innovator’s Dilemma."

We decided to add a little more fuel to the already blazing fire over disruptive innovation by getting input from four industry thought leaders.

The Question

Is disruptive innovation a passing fad or a useful concept to guide managerial decisions? Or, as one of our respondents so elegantly asked, "Is disruptive innovation crossing the chasm or jumping the shark?"

The Answers

Jeff Dachis, Chief Evangelist, Sprinklr

2014-30-June-Jeff-Dachis.jpg

Considered one of the pioneers in the development of the World Wide Web, Dachis has been involved in the creation of the first banner ad, the creation of the first web animation and has digital work exhibited as part of the San Francisco Museum of Modern Art's permanent collection. He is currently serving as an advisor and Chief Evangelist at Sprinklr, a social experience management platform that recently purchased Dachis Group. As the founder, CEO and Chairman of Dachis Group, he helped coin the term "Social Business" and led the company’s growth to more than 240 people with $40 million in revenue. He is also the co-founder, former CEO and chairman of Razorfish, the world's largest digital marketing solutions firm. Tweet to Jeff Dachis.

Whether or not you use Christensen's definition as a guide or as gospel, with all popular clichés aside, a company's longevity and success in the marketplace depends on it.

Some portion of a modern company manager's time has to be devoted to thinking about and understanding not only where things are at, but also where they are going. Too many companies do too little of this and suffer the consequences. The average life expectancy of an S&P 500 company is under 20 years. The challenges in not questioning the status quo and not structuring management planning efforts to address the disrupted future are large. However, reimagining the business landscape and successfully navigating transitions mean to the victor go the spoils.

It seems like Lepore's criticism has more to do with negative feelings about the meme, trend or fad that disruptive innovation may have become and more pointedly the specific case studies Christensen used, than with the idea that disruptive innovation is occurring and that companies face unprecedented challenges from asymmetric warfare from unexpected challengers as industries re-define themselves in new contexts. She rightfully points out that the rearview mirror is an accurate predictor of success or failure in deciding the winners or losers of which innovations disrupt. However that does not mean that a company's managers should have their heads in the sand, live quarter by quarter and fail to address the future as an opportunity to lead.

Brian Solis, Principal Analyst, Altimeter Group

2014-30-June-Brian-Solis.jpgFor the past three years, Solis has worked at Altimeter Group, a research firm focused on disruptive technology. A digital analyst, anthropologist and futurist, he has studied and influenced the effects of emerging technology on business, marketing, and society and is globally recognized as a prominent thought leader, speaker and author on new technology and digital anthropology. His latest book, What's the Future of Business (WTF), explores connected consumerism and how business and customer relationships unfold and flourish in four distinct moments of truth. His previous book, The End of Business as Usual, explores the emergence of Generation-C, a new generation of customers and employees and how businesses must adapt to reach them. Tweet to Brian Solis.

Living in Silicon Valley, the word disruption is heard as often as “please” and “thank you.” I’m exaggerating of course, but in all seriousness, there’s an unsaid belief in the technology businesses that all innovation is potentially disruptive. At the same time, almost every tech entrepreneur, investor or executive that I’ve worked with has quoted Clay Christensen’s model of “Disruptive Innovation” as much as Geoffrey Moore’s “Crossing the Chasm.”

I’m not sure of Jill Lepore’s motivation to revisit Christensen’s 1997 work. Perhaps like many, she’s tired of people using or misusing the word disruption. Maybe, she’s simply causing a stir to draw attention to herself. Either way, many people in Silicon Valley, I guess everywhere, generalize Christensen’s model and confuse the differences between creativity, innovation and disruption. Certainly, I’ve noticed the interchangeable use of those these words ad nauseam.

What’s the difference?

Creativity is the use of the imagination or original ideas in the production of an artistic work or work where creativity is usually not part of the equation.

Innovation is something original and new that "breaks into" a market or society.

Disruption … disrupts markets and introduces new direction and changes behavior. In this sense disruption is an effect.

I work with a commercial b2b and b2c insurance provider that is taking an innovative approach to disruption … word choice intended. It believes that to disrupt markets it must start by disrupting its own business. It is setting out to do what the New York Times apparently is not doing, and that is investing in technology and the companies that are setting out to defeat it. Doing so is counter intuitive for some but also one way to ensure long-term relevance.

Christensen’s work, for better or for worse, is beyond reproach at this point. Most who cite his work can’t even define it accurately. But it is in the spirit of progress to innovate, disrupt and even cause disruptive innovation that fuels ideas not only in Silicon Valley but also around the world.

Howard Yu, Professor, IMD 

2014-30-June-Howard-Yu.jpgYu is a professor of Strategic Management and Innovation at the International Institute for Management Development in Lausanne, Switzerland. He received his doctoral degree in management at Harvard Business School. His research interests include technological innovation, strategic transformation, and change management. His teaching and research activities focus on why and how some firms can sustain new growth while others cannot. Email Howard Yu at howard.yu@imd.org.

 

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