Last month, we talked about how creativity and innovation go hand in hand. A key component of all innovative businesses is that they shake things up and produce a competitive edge over your competition. You know, disrupt the status quo.
Disruptive innovation is a term coined by Harvard Business School Professor Clayton Christensen.
Disruptive innovation is the process by which a smaller company—usually with fewer resources—moves upmarket and challenges larger, established businesses. Like iOS did with Microsoft and Apple with IBM.
The process begins with a small company entering the low end of a market, or creating a new market segment, claiming the least profitable portion of the market as its own. Because the established, incumbent companies own the most profitable market segments, they most likely won’t fight the entrant for that market share.
The entrant then improves its offerings and moves upmarket with increasing profitability. Once the incumbents’ customers have widely adopted the entrant’s offerings in the mainstream market, disruption has occurred.
Thinking Like an Innovator
Whether you’re an aspiring entrepreneur or a seasoned business professional, you should understand both low-end and new-market disruption.
Using Christensen’s theory of disruptive innovation, you can break into new or existing markets and craft business strategies with disruption opportunities in mind.
We’ve all heard of the classics Disruption examples;
- Netflix disrupted Blockbuster with online video streaming
- Uber disrupted Taxis without owning Cabs
- AirBNB disrupted Hotels without owning Hotels
However I want to dig deeper and go back further, disruption as a business model started well before this.
There are 2 main types of Disruptive Innovation
Low-End Disruption, using a low cost business model to enter the bottom of a market;
- Medical Clinics disrupted Doctor’s offices and Emergency rooms at Hospitals
New Market Disruption, when a business creates a new low cost version of a product or service in an existing market;
- Portable transistor radio disrupted the large home radio console
- The Sony Walkman disrupted the transistor radio
- The MP3 player and iPod disrupted the Sony Walkman
- The Smartphone disrupted the iPod
- The Digital Radio disrupted the bedside alarm clock
Other examples of Disruptive Innovation;
- Push button phones disrupted the rotary dial phone
- Digital Watches disrupted regular watches
- Macintosh operating system disrupted Microsoft
- Open source programming like Apps disrupted closed source programming
- Apple Macintosh Computers disrupted the IBM computer by being able to put a computer in every home
- Digital Cameras disrupted Kodachrome film
- Smartphones disrupted Digital Cameras
- Laptops disrupted Desktop Computers
- Smart Phones disrupted the Laptop Computers
- The Internet disrupted how we access information
- Wikipedia disrupted Encyclopedias
- Amazon online with drop shipping disrupted Sears online catalogues
Currently and into the future;
- Bitcoin is disrupting Banking
- Blockchain is disrupting access to secure data
- AI is disrupting the way we think
- Big Data is disrupting decision making and ease of access to data
- 3D printing disrupting manufacturing
- BIM is disrupting architecture and the way we design
- Virtual & Augmented Reality (VR/AR) is disrupting the video gaming industry
- Internet of Things (IoT) is disrupting the way we live
- Machine Learning (ML) is disrupting the way we learn
- Autonomous Driverless vehicles are disrupting the way we travel
- Non Fungible Tokens (NFT’s) are disrupting the ownership of physical things
What Is Business Disruption And What Does It Do?
Disruption gives rise to extensive shifts in industries. This is simply through the ability to offer distinctive niche-oriented, inexpensive, or untapped solutions to old or even new business problems. In some given circumstances, this phenomenon has been able to upend existing markets and created entirely new ones.
Disruptive innovation has the ability to successfully challenge industry giants with a fresher perspective on old problems. They usually concentrate on providing efficient solutions that address their target market’s unmet or overlooked needs.
The Key Characteristics of Disruptive Businesses
Granted, virtually all companies can develop and successfully market a product or service. However, disruptive business models are known to completely revolutionize their industries by offering innovative products or services that customers wish for and that address their needs that weren’t met before at competitive price tags. So what’s the recipe for successful business disruption?
- Be intentionally innovative.
- Have a keen desire to revolutionize the industry.
- Be more focused on the end consumer.
- Make positive impact goals.
- Possess an anti-status quo creative mentality.
- Agile adaptability and be able to initiate changes.
- Be willing to implement technologies that could transform your processes.
The Power of Disruptive Businesses
To begin with, innovation spurs more innovation. As an acclaimed US physicist aptly put it: without change, there can’t be innovation, creativity, or incentives for improvement. When you initiate change, you’ll open up better opportunities to effectively navigate the change which is inevitable. Disruption spawns competition that rejuvenates markets.
Out-of-the-box thinking gives rise to competitive innovation, which in turn, offers the consumer more value and choices. Disruptive innovation pays well, just look at the financial timelines of world-renowned brands like Apple, Facebook and Amazon.
Leveraging Technology for Business Growth
Today’s business world, characterized by rapid digital transformation and emerging technology, has given rise to newer and increased opportunities. The scope, complexity, and scale of technology has evolved exponentially.
Best of all, this ongoing trend has made cutting-edge technology widely accessible to businesses of all sizes. This has fashioned a thriving digital culture that delivers a horde of competitive advantages in a variety of business functions and operations. This includes marketing, sales, manufacturing, sourcing, logistics, recruiting, training to mention but a few.
Access to robust technology is no longer just serving big established enterprises. Every industry and every business is being impacted, and the most successful, are the ones who have taken the technological reins and run with it.
How does Technology Contribute To Business Growth
Technology fast-tracks day-to-day operations, streamlines efficiency, and over time, drives growth.
- Improved customer engagement and interactions: Adopt a more customer-orientated business model to win more customers and retain loyalty.
- Make more informed business decisions: Access to the latest data analytics can help you stay one step ahead of competition and drive growth.
- Drive more profitability and business agility: Being in a position where you remain agile and well-versed with current trends, will enable your company to retain a competitive advantage.
- Improved Human Resources Management: Human resources teams are tasked not only with recruiting top talent, but tracking their performance, keeping them inspired and engaged.
- Facilitate remote work: One of the emerging boons of leveraging technology is without doubt remote working capabilities. These sorts of innovations enable your team, however far-flung it might be, to work in tandem regardless of where they may be located globally.
Leveraging Disruptive Innovation Today
No matter what part of business you’re involved in, to stay relevant, competitive and survive in a long-term market, you need to embrace disruptive innovation to keep growing exponentially.
I’ve project managed some of the largest infrastructure projects on both sides of the Pacific pond, without the ingenuity, innovation and disruption to the status quo we wouldn’t be living in the cities that we live in today. I now serve some of the most talented Business Owners, Entrepreneurs and C-Suite Executives who are challenged everyday by our fast-paced society, where we work through successful strategies via 1:1 coaching or peer groups to reach high-yield growth together.
Connect with me to see how we can open your mind to attain exponential growth via disruptive innovation.
Meet Chris Hardwick
Executive Business Coach
For over 20 years I've been helping entrepreneurs and business leaders to realize their dreams and achieve success.
As an entrepreneur, world traveler, adventurer, and motivator, I lead by example. My goal is to inspire you with my passion for life, success and happiness.
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