For those of us who do not spend our every idle moment glued to LinkedIn or any number of other warehouses of business management trends, the phrase “disruptive innovation” makes about as much sense as particle physics. In fact, the former may be even more inscrutable than the latter.
So, here is a quick and easy definition, courtesy of Clayton Christensen, the Harvard Business School professor who coined the term and wrote a book on the subject back in 1997: “Disruptive innovation takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing competitors.”
The idea is that “as companies tend to innovate faster than their customers’ needs evolve, most organizations eventually end up producing products or services that are actually too sophisticated, too expensive and too complicated for many in their market.”
Traditionally, this niche approach to marketing and technology development secures higher rates of return on investment and better, more sustained profits, because expert consumers will spend money on gear that they think will separate them from the herd. And herein lies the peril.
By focussing on these so-called “sustaining innovations” producers “unwittingly open the door to disruptive innovations at the bottom end of the market.” An innovation that is disruptive essentially upsets the apple cart by allowing “a whole new population of consumers at the bottom of the market access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.”
Call it extinction by inattention. But whatever you call it, examples of disruptive technologies, processes and services are everywhere.
Think about that smart phone in your pocket. Once upon a time, not so very long ago, it was a ludicrously larded device that, conventional wisdom insisted, would be forever relegated to the lifestyles of the rich and powerful. Now, thanks to some cheap and efficient applications in hardware and software, it’s as common and as pricey as a set of all-weather tires on a Nissan Versa.
New “disruptives” available in the near future will likely include: embedded sensors in that smart phone you’re caressing that tell you whether you’ve brushed your teeth properly; wearable technologies that, among things, track your sleep patterns; and, naturally, driverless cars that eliminate the dangers of texting while cruising down the highway.
Not everyone thinks this stuff is all it’s cracked up to be. New Yorker writer and Harvard history professor Jill Lepore, in a brilliantly argued essay this month, suggests that Mr. Christensen essentially kites his data by finding facts that are not in evidence. Some of the biggest “disrupters”, she says, are the very firms the theory predicts will and do fail.
Besides, she suggests, innovation is always inherently upsetting. Companies rise and fall just as easily according to the ephemeral rules of luck and timing. In this case, size and longevity do not necessarily matter.
Frankly, I take comfort in both views, especially as they apply to southeastern New Brunswick and its acknowledged centre of enterprise, Metro Moncton.
Here, of course, disruption has been our cardinal métier since anyone can remember.
Once, we were all about shipping and shipbuilding. Then we weren’t. Once, we were all about wholesaling and retailing. Then we weren’t.
Now, we’re all about IT, multi-modal transportation, health care, and software development.
Each bump along the road to sustained economic progress elevated disrupters and, in the process, changed our local economy mostly for the better.
And not just our economy.
The Petitcodiac River flowed freely for thousands of years before our forebears erected a causeway between Moncton and Riverview in 1968. We disrupted it. Then, a few years ago we disrupted it again by permanently opening the gates. Now, the river attracts surfers from California, desperate to ride the renewed tidal bore for 90 minutes at a go. Disruption? You bet, and thanks be for it.
In the end, we engineer what we need. Disruption? Perchance, thy name is a multi-purpose, downtown events centre.