In March I enjoyed a webinar given by Clayton Christensen and Max Wessel for the Forum for Growth and Innovation, a Harvard Business School research center initiative. The Forum for Growth and Innovation seeks to develop “breakthrough theories to help businesses become more successful innovators and create new, robust sources of growth”.
The webinar was all around surviving disruption but discussed also “looking beyond the horizons,” which is a specific topic of interest for me. I continue to argue for the three horizon methodology as important to manage much, including disruptive events.
The Theory of Disruptive Innovation
“Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors”.
Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics”.
The webinar raised in my mind many unanswered questions.
Central to the thinking for disruptive innovation is to address the jobs-to-be-done. Another nice piece that describes Clayton Christensen’s work in this area of JTBD is here. This seemingly simple idea has profound implications for re-framing industries. There are some JTBD aspects clearly to this as well. Still that is another story for another day.
The one question I had was this “Why do we have internal difficulties to self-disrupt?”
In most cases organizations are not able to self-disrupt and this is largely covered by this veritable list of constraints.
So I set about thinking what these could be, here is my rather ‘stark’ list, can you think of anymore?
- Organizations often are far too close to existing markets to recognize that they are actually shifting; they ignore or miss the signs in many ways.
- They get so fixed on their own perceptions they don’t see change coming – often until it is too late and have lost that intuitive, entrepreneurial touch within the mix.
- They have invested too much, they hang on, often reducing prices, pushing more volume into the markets, crank out even more “extras” to try and off set change.
- Organizations are full of rigidities, rules, procedures, processes and personalities and often no one is prepared to put their hand up to challenge the present paradigm.
- The reinforcing values are just plain tough to change, you need dynamite to shift these
- The people within organizations love the comfort of the nest they have built around themselves, who wants to bail out and expose themselves?
- The processes become over burdening, hard to change, far too complex to change without significant commitment and top management support
- Cultures are wonderful things but the dark side is they can stifle and constrain far more than promote and let free.
- Leadership is locked into the strategy, tied into compensation on delivery on the existing, not on the preferred, far more radical, risky alternatives
- Organizations, especially large ones are less than nimble, they fail to adapt and respond quickly enough – they prefer to double-down’ with more of the same but faster, leaner and more determined than ever, missing the real dangers occurring under their noses
- Today, we are putting more and more of our organizations into boxes, they are becoming highly structured and specialized to maximise effectiveness and efficiency.
- Markets are more global, faster, fiercer to compete in, often organizations are reluctant to explore and experiment with new business models, or push into the adjacency areas for fear.
- Lastly it does not matter how hard many organizations try, they lack real intelligence in market and customer needs, hence why the jobs-to-be-done is one essential component.
While all these stay in place, or not recognized as inhibitors to your own disruption capabilities, it is not surprising it is in the end those up and coming usurpers, the nimble and unencumbered, that thrive and begin to disrupt. You simply struggle when you leave it to late- your organization needs to resolve many of the above issues before it is ever capable of responding.
Look more in than out – that is where your danger often lies
Sometimes we are spending all those significant efforts scanning the (external) horizon for the next big disruptive ‘thing’ but in the end it is the internal difficulties that ensure it is ignored until it is too little, too late. Work on the many internal warning signs daily, they are around and often in plain sight.
“Perpetuating history”, as Clayton Christensen would certainly say, “simply opens the doors to disruptive innovation”. We need to really recognize ALL the symptoms on why we can’t internally self-disrupt.
Surviving disruption is something we all need to recognize as likely to happen to us a good few times in today’s disruptive world. The best survival course is to recognize the symptoms, so we all can react and deal with its introduction.
Disruptive innovation is a constant threat to total disorder and multiple impact points upon our business. Watch out, disruption is all around us. We must learn the art of reinvention and avoid the traps of not working towards our own self-disruption.
image credits: nickdewit.com; thefgi.net
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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.