I recently picked up The Innovator’s Dilemma by Clayton M. Christensen for a re-read. And I was struck by three things.
Christensen has a very tight definition of disruption. It happens when a market becomes dependent on high margin, high feature, high touch products/services and there’s an opening for a low margin, low touch, low feature product which satisfies a significant % of customers. A truly disruptive market situation is both dangerous and an opportunity – companies need be aware of them.
But his clear definition is rarely used – today it usually seems to mean “any time a business is threatened by change”. The term “disruption” has even become a threat – “We’re going to disrupt your market!!!!!”. Even more often it is used to hype startups in order to get VC funding. (As in “we’re going to disrupt the Kleenex business so give us $100M Series B funding”.)
We need return to Christensen’s narrow definition.
Christensen brilliantly identifies challenges facing all major innovation in corporations. His five Principles are superb and they explain challenges for all types of innovative products (especially as summarized in the new introduction he wrote for later editions). It was tremendous fun to re-read these Principles and ponder the many many innovation situations I’ve been part of in the past 35 years in their light.
That said, Christensen mistakenly calls them his “Principles of Disruptive Innovation”. These principles apply to all major innovations – disruptive or not.
“Disruption” is emphasized at the expense of other major innovations. The Innovator’s Dilemma made disruption into a shiny new term – particularly building excitement for those who want to destroy the old order. So the idea leapt out of the book. That has been great for consulting businesses given that disruption is based on fuzzy fear – has a salesman’s “FUD factor” built in (“Fear, Uncertainty, Doubt”).
But the world isn’t so simple as “incremental innovation” vs “disruptive innovation”. So the idea of “disruption” hasn’t been as great for business as it has led to obsession. And Christensen’s case studies seem to imply “it will happen to everyone…soon”.
Change is constant. Innovation is constant. But when I scan the annals of innovation, disruption is NOT the primary theme. Many challenging, difficult, and very important innovations have nothing to do with disruption. And while chasing disruption, companies often fail to make major innovations succeed.
Truth is, in most situations disruption is NOT the most critical risk. Unfortunately, Innovator’s Dilemma implies that it is. But disruptive risks aren’t present in most markets and catastrophic failure isn’t the outcome we should fear most for our innovation work. The biggest risk with innovation work is mediocrity.
For an example of this mediocrity look at the introduction of Lithium-Ion battery technology in power tools. This extraordinary technology never came with a risk of it’s being “disruptive”. I suppose one of the pontificating innovation consultants would say that means it could be nothing other than merely “incremental”. They’re wrong.
The value Lithium Ion batteries added to power tools was huge.
- It should have led to a major investment on the part of pro’s and consumers replacing older tools with these far better performing ones.
- It should have led to increased margins across the board as manufacturers introduced LI on their tool lines.
- It should have led to an expansion of the tools people carried – as it enabled new entire lines of sufficiently powered, low weight tools. (In the tool market, these wouldn’t replace the higher power tools – they complement them.)
And yet, manufacturers missed their opportunity – starting with Milwaukee. They had to tell consumers what this exciting new innovation offered and they didn’t. Why? Investing in advertising would have meant (see Christensen’s Principles) that the innovation would deliver lower margin for the initial years while advertising built demand. Consumers had no innate sense of why they should care about LI technology. And, it turned out, none of the market players could overcome their internal structures to do that advertising. (You can read more of my analysis of the mediocrity of the returns here.)
I recommend adding five corollaries to Christensen’s Principles:
The Garnett Corollaries:
- While disruptive innovation can be devastating, many or most markets grow and change in long periods where there is no threat from disruptive innovation.
- Focusing on disruption when it’s not a threat takes resources and focus away from the more important dramatic innovations.
- For many companies and most of the time, dramatic innovations which are not disruptive are the key to long term success.
- Christensen’s Five Principles still explain many of the challenges which limit return on innovation whether the market is under a disruptive threat or not.
- Companies need to limit the tendency to create high cost, high margin, high touch innovations which are too far ahead of their market. Usually the best innovations are far simpler.
Match your innovation to your market situation – not to arbitrary application of “disruptive” theories.
As I wrote recently, Innovation Is Not a Tame Practice. So take a hard look. How will innovation deliver the most power to your organization and company future?
Then, paying attention to the Principles and my corollaries, focus on what matters: Taking the risks needed to develop exciting new product innovations.
Copyright 2018 – Doug Garnett – All Rights Reserved