Can You Get Ahead Of Disruptive Innovation?

8970947 - illuminated light bulb in a row of dim ones concept for creativity, innovation and solutionby Justin Grensing, Esq., MBA

Disruptive innovation refers to new advances within an industry that fundamentally reshape or even completely replace an industry. Consider, for example, the impact of the personal computer on the typewriter industry, or the impact of the automobile on the horse-drawn carriage industry. Disruptive innovation is a boon to consumers and society in general, because new products, new services and new ways of serving customers add value to individuals and the economy as a whole. At the same time, disruptive innovation can be devastating to companies that are too slow to recognize the impending impact of disruptive innovation or too slow to react once they have recognized that potential impact.

In a post for Vertafore, Ben Deda, VP of Marketing, lists several examples of companies that failed to adapt to disruptive innovation. You’ve likely heard of them:

  • Blockbuster: failing to respond to video-on-demand services like Netflix and Amazon Prime
  • Kodak: failing to respond to the emergence of digital photo technology
  • Myspace: emerged as the first mover for social media, but couldn’t adapt quickly enough when Facebook began allowing users to connect on multiple levels
  • Xerox: widely known for its namesake photocopying machines, but Deda writes, “If you’re Googling the latest in insurance technology, you can thank Xerox. The company invented Ethernet, the computer mouse, and the desktop computing that made everything easily searchable through folders.” Unfortunately, it wasn’t able to capitalize on its own disruptive innovations, which were capitalized upon by other companies, such as Apple.

Other companies, however, have proven to be extremely adept and agile at updating their products, services and business models to adapt to, and even thrive despite the advent of, disruptive technologies. For example, in an article for DisruptionHub, CEO Rob Prevett writes, “A major shift in business thinking has placed Artificial Intelligence at the very heart of business strategy. 2017 saw tech giants including Google and Microsoft focus on an “AI first” strategy, leading the way for other major corporates to follow suit.”

Similarly, Prevett notes that companies are increasingly moving towards an XaaS (anything-as-a-service) model, where, rather than purchasing a product, customers subscribe to some limited form of use for those products. Think of Car2Go instead of owning a car and cloud storage instead of personal hard drive space. Microsoft is a great example of a company that quickly moved to a software-as-a-service “SaaS” model, departing from the traditional model of customer buying a CD and uploading MS programs onto their PC.

So what makes some companies better than others at identifying and adapting to disruptive innovation? Part of the recipe is simply being willing to consider that what has always been successful may not – indeed likely will not – be successful in the future. Once that perspective is in place, it’s a matter of keeping one’s ear to the ground and having the flexibility to adapt as conditions change.

How are you staying alert to impending disruptive innovations that may threaten your company? Conversely, how might you leverage disruptive innovation to be a first mover in an entirely new space?

 

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