Disruptive innovation, says Technology Review, is making the complicated simple, making the expensive affordable, driving growth by transforming what exists, and creating what doesn't.
Think about the delivery of ebooks on a Kindle Fire for example. A brand new service, a brand new product, a lower price, and a simple user experience (easy to purchase, download, and "consume").
Typically, says this report, disruptive technologies are born from startups. A full 85 percent arise from these engines of innovation that open whole new markets compared with established enterprise organizations. That’s changing, and it had to. Despite the many big name companies that have disappeared over time, many are forging ahead. Xerox is one such success.
Xerox transformed its business model. First to change was the company-wide mindset. When employees were initially asked what Xerox did, the answer was: we're a copier company, a printer company, a document company. "No, that's not what we do," countered the CEO. "We help companies transform very complex and burdensome business processes." Xerox began offering new services (managing non-Xerox equipment) and developed new web-based tools for vertical industries. Soon, service business revenue will far exceed that of its traditional business.
Three traits seem to be common among all business innovators both big and small: the creation of a brand-new service and/or a brand-new product, and an obsession with the customer in terms of understanding exactly what they need and how to deliver an excellent customer experience.
But you’ve got to be first or do it best. Here are some questions for executive leadership:
- Beyond the products or services at which our company already excels, what exactly do our customers need and want?
- What am I doing every day, to understand my customers, technology, and the market better than anyone else?
- How many projects are we working on that have the power to create new markets or disrupt/reframe existing ones?
Says Technology Review, if you don’t disrupt others, you can be sure that either new or old competitors will destroy you.
Companies have to remain focused and vigilant. Recent IPOs of Groupon, LinkedIn, Zynga, and soon-to-be Facebook highlight the disruptive innovations of startups-gone-global, in the blink of an eye. Says NetworkWorld, “the only source of competitive advantage is the one that can survive technology-fueled disruption — an obsession with understanding, delighting, connecting with, and serving customers.”
To become customer-obsessed, Forrester advocates investing in the following areas: 1) real-time customer intelligence; 2) customer experience and customer service; 3) sales channels that deliver customer intelligence; and 4) useful content and interactive marketing.
Disruptive innovators will come in all sizes, and the disruption is not just about technology. Think customer service, online implementation and delivery, pricing strategies, self-service options, and the customer experience. The bygone era of Blockbuster compared to the eruption of Netflix and Redbox comes to mind – both completely transformational in so many ways.