Disruptive innovation or disruptive change is a business term used to define an innovation that by its existence, creates a new market different from existing markets, which disrupts the existing markets’ value network and lead to the displacement of once leading firms and products. In this article you will learn about industry disruption, disruptive innovation theory and how Sinnaps, the project management software can support the development of disruptive innovation ideas.
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Disruptive Innovation Examples
Disruptive innovations tend to originate in low-end disruption or new-market bases. A disruptive economy is one that sees disruptive innovations take place often, especially with modern-day technological advancements. Disruptive innovation comes from established firms not taking advantage of opportunities and new start-ups taking the lead instead. Uber, Air BnB and Starbucks can all be considered as firms that pursued a disruptive strategy and disruptive innovation.
Business Disruption
The marketplace currently seems to be holding a disruptive innovation festival! The environments were traditional business operated are becoming increasingly diverse and complex. They are also less predictable and more interconnected than ever thanks to technology. Business need to take disruptive innovation into consideration for long term survival.
A lot of traditional and successful businesses like to stick to what works best for them. The reality is that it may be working great for now, but as soon as a disruptive innovation comes around the corner it will be too late. Disruptive innovation will affect the economy, competition, products, technology, delivery methods, employees and other key aspects for businesses. For this reason, disruption management needs to be a strategic capability for businesses.
Disruptive Business Model
Traditional business models are becoming increasingly threatened by an overwhelming emergence of start-ups and new disruptive business models. Companies that experience the most success are the companies that dedicate efforts towards disruption management so that they can avoid being left behind. Disruptive business models are about managing opportunities and creating disruptive products that will meet customer value standards and critical success factors, while traditional business models tend to focus on managing risks and sticking to what is currently working for them.
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Market Disruption
Disruptive innovations and disruptive growth affect markets by offering products or services that are usually:
- Cheaper
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Faster
-
Of a Higher Quality
-
More Efficient
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Last Longer
If a market is disrupted, the leading firms within that market will be greatly affected, especially in terms of profitability. It is only natural for consumers to flock towards something that will generate more value for their money and in that case out dated businesses will be left behind. Disruptive innovation takes market share away from competitors. Sustaining vs disruptive innovation is therefore a question to be considered by all companies.
Sinnaps can support the development of disruptive innovation ideas. Try it now 😉
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Christensen Disruptive Innovation
Clayton M. Christensen is a business consultant and professor that in his disruptive innovation book said that firms were experiencing the “technology mudslide hypothesis” and really questioned how useful is the theory of disruptive innovation.
Firms often seem to find it difficult to keep up with the technological advancements of the world. Often, organisations are competing in an environment described as similar to that of climbing a crumbling wall; if you stay still, you will fall.
Christensen, however said that this was an unrealistic view of what forms actually face and that firms naturally become aware of innovations and opportunities but are often not in a profitable enough position to pursue them. He states that sustaining innovation to compete with current competitors is important, until the firm develops itself enough to take on disruptive innovation and disruptive growth. He defines a disruptive innovation as a product or service designed for a new set of customers.
Change is constant and disruptive innovation is invading the marketplace. As an organisation it is important to work on being proactive rather than reactive so as to ensure the long term well being of the organisation.
One thing is for sure however, any disruptive innovation that you may wish to pursue needs careful planning and effective technology behind it, which is exactly what Sinnaps, the online project planning tool offers. 😊
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