Are disruption and innovation
different?
In business today, both words have been hyped to the point of becoming generic qualifiers
or buzzwords. Checking the dictionary does not help; the meanings do not provide
a context in which a person or company can promote their idea or product.
In March 2017, I had the opportunity to chair a conference where many
of the panelists touted the ability of their institutions to disrupt and
innovate. We had a panel on "Lessons from Disruptive Industries" but
no one could define disruption and what made it unique from the innovation and evolution
seen in every industry. How can we share a lesson when we are not agreed on its
message and application?
I proposed a working definition for disruption
as:
A smaller group with
fewer resources - and a radically different business model /unconstrained by
current business model - challenges the incumbent(s) for business/customers.
When a non-participant, community or customer adopts the new entrant,
disruption occurs.
This presents basic assumptions which further draw a line between the
two concepts:
· Disruptors begin with few or no customers/consumers
· Disruption takes the community beyond an individual product offering to include the process and all surrounding infrastructure, from technology to governance and related industry(s)
· Disruptors experiment, introducing uncertainty or chaos to related industries and may birth new ones
· Disruptors may fail completely, including the fragile new infrastructure being built
· Disruption brings new habits and behaviours for all participants - disruptors and their consumers
Therefore innovation implies product/process introduction or iteration and
has a precedent in an established business model and resourcing.
Why does this matter?
Like their hard-working cousins "transformation" and "change," the concept of disruption and innovation only has tangible meaning when we can articulate their scale and context - which then allows us to understand successful application.
1.
Language sets expectations.
·
We can use the words we want as long as we check
that we have assigned the same meaning and implications. We may both say
"red" but that does not mean we are envisioning the same colour
2.
Exploration of an idea must include a discussion
of assumptions.
·
We can't share a goal if we don't agree to its
terms
3.
Most importantly - by its very nature, the risk
profile of disruption is different from innovation (large or small).
·
How can we plan and navigate a process if we
cannot understand the inherent risk and benefit structure?
What could this definition look
like in real life?
Music: People have been
listening to music for centuries. Music has advanced and expanded - from its
styles to its instruments, evolving over millennia.
In the late 1970s, the
Sony Walkman made music portable. I remember my dad being one of the first
adopters and his painstaking hours spent moving his reel-to-reel collection to
cassettes. While my son would view anything less than wireless streaming as
hopelessly outdated, he will never know the joy of being literally unplugged
from a stereo system.
There are some who would claim that this began a rejigging of the
entire industry – a disruption. However, it was (and streaming remains) an
innovation. The business model was established – manufacturing, branding,
licensing, etc. models were in place. While the business model has continued to
evolve in response to consumer demands and habits, it is still an innovation.
Walkmans (and streaming) don't require new audiences or conversions of
non-music lovers. The distribution of the money may be in flux but that is
business-as-usual.
If the Walkman had failed, the music business would have kept chugging
along. The risk was measurable and absorbable in the bigger scheme of the industry.
Light bulbs: We have been
using light for as long as we've been listening to music. Personally, I bet
music has been around longer. The gentlemen who perfected the lightbulb (approx.
1878) created disruption.
While electricity existed, there was no electricity
grid or electric transformers in place; that would come over the next 50+
years, from installing NYC streetlamps late 1882 to the passing of a Federal
Power Act and The Public Utility Holding Co Act in 1935. That year, a baseball game
was played under electric lights for the first time.
With no were no lamps waiting with empty sockets, no government or
safety standards for use or manufacturing (AC or DC?), new industries and
infrastructures were created. Housing,
city and factory design was rethought. Consumers emerged from all communities.
If the lightbulb had failed, imagine our world today. We might still
have computers and light (and music) but with the introduction of the lightbulb,
electric development pace increased, new business models emerged and the gas
light industry is dead.
Put your idea to the test
Disruption and innovation are both necessary. Help supporters
understand what you are doing and the risks involved.
|
Disruption
aims to…
|
Innovation
aims to…
|
|
Interrupt
|
Interrupt
|
|
Transform (full fairy-godmother-to-the-ball-effort)
|
Change (something different on a large or small scale)
|
|
Introduce element of chaos
|
Introduce element of uncertainty
|
|
Begin with few or no customers/consumers
|
Begin in established industry
|
|
Turn non-participants into participants
|
Deepen relationship with existing community and invite new
participants
|
|
Envision a
new business model
|
Operate
within an existing business model
|
|
Experiment
& accept failure
|
Improve & accept measured risk profile
|
|
Introduce new
behaviours, policies, thinking, etc. to multiple and potentially unrelated
communities and industries
|
Influence, change
or replace habits and policies in limited, related communities, industries
|
|
Is often a catalyst for innovation in other areas
|
Reflects evolution and can spur change in related areas
|
So what's next?
At the conference, it became obvious that those of us being disruptive
and/or trying to push an innovation agenda can work together. The workforce is
changing, along with technology and global politics to the point where status
quo means sliding backward. To embrace and embed the fraternal twins,
Disruption & Innovation, we need to understand their different natures and
measurements and then apply our ideas as hard as our risk tolerance allows!
