“Disruptive innovation” seems to be one of the more popular buzzwords in today’s business lexicon. Many companies pursue it. Few actually achieve it. Most end up settling for incremental innovation.
What’s the difference between the two?
Apple offers a perfect example. When the iPad and iPhone first came out, they revolutionized the mobile tablet and smart phone industries. The technology built into these devices wasn’t all that new, but Apple put them together in a way that allowed people to do things they couldn’t do before.
Fast-forward to today, and several years have passed since Apple has come up with a truly disruptive product. Instead, their innovation now offers small advances or minor improvements such as a larger size iPhone or lighter laptop computers. Apple still makes great products, but they don’t seem to capture our imagination like they once did.
I’m not knocking Apple. It’s hard enough to disrupt an industry once, much less on an ongoing basis. But the company seems to have lost the spark that once had so many people eagerly anticipating their “next big thing.”
By the way, there’s nothing wrong with incremental innovation. It generally costs less than the disruptive kind, and involves far less risk. But it doesn’t provide much of a competitive advantage, and rarely delivers enough value to put you in a position of market leadership.
Rethink Your Innovation Process
Most companies, especially highly successful ones, struggle to disrupt their markets because they’re set up for incremental innovation. They don’t reward risk-taking. They focus more on maintaining the status quo. Instead of seeking customer input or looking for new ideas outside their industry, they use internal ideas to get slightly better versions of existing products to market quickly and cost-effectively.
Nothing wrong with this approach if all you want is incremental gains in revenue and market share. Developing market leadership through disruptive innovation requires a different approach; one that involves looking at the world and your business differently.
As always, start by getting clear on the goal. Do you want to aim for incremental or disruptive innovation? If you choose disruption, gather your team and ask the following questions:
- What processes do we have for understanding our customers’ needs and how they are changing?
- What processes, if any, do we have for gathering data outside traditional industry sources?
- Do we know how to suspend our assumptions and explore new ways of looking at the same things?
- How do we determine the value of new ideas? Is our process effective?
- How do we know if a new product will add value to our customers?
- Have we provided the tools and training for employees to think differently?
- Do we punish or reward risk-taking in our company?
- Do we have systems in place for tracking and evaluating our innovation process?
Talk to Your Customers – A Lot
Disruptive innovation isn’t just about the technology, it’s about solving problems for customers in radically new and different ways. It often solves problems that customers don’t even know they have or can’t clearly articulate. (That’s where Apple excelled for a long time). So ask good questions of your customers and then listen. The more you know about their unsolved problems, the better your chances of coming up with revolutionary solutions, especially in B2B markets.
Also, find ways to make customers part of your new product development process. Not only will they come up with new product ideas that surprise you, the process of engaging them can produce other stronger, more effective working relationships.
Challenge Your Assumptions
Often, the biggest impediment to disruptive innovation consists of what you think you know about your business. The more you’re absolutely, positively sure you know what customers want, the harder it is to come up with new ways of adding value. To clear this hurdle, hold regular “assumption inventories” where you make a list of all your organization’s sacred cows and see whether the data still supports them.
Develop Diverse Data Sources
Equally important, expand your data sources well beyond the boundaries of your organization. Follow demographics and trends that have nothing to do with your business. Track how other industries are getting blown up and discuss how those lessons might apply to yours. Stay alert to new technologies that could remove existing barriers to entry in your industry and who might jump in once the barriers are gone.
Finally, pause from time to time and ask my favorite question: What if? Get away from all distractions and simply let your brain roam free. You’ll be amazed at what it comes up with!
Call to action: Take your top five customers out to lunch (one at a time) and talk about their business, not yours.