19 Mar DISRUPTIVE INNOVATION KEYNOTE SPEAKER: CHANGE MANAGEMENT AND BUSINESS STRATEGY
Disruptive innovation is a concept that refers to the introduction of new products, services, or processes that fundamentally change the way things are done in a particular industry or market. This kind of innovation often comes from outside the established players in the market and can initially seem inferior or irrelevant to those players. However, over time, disruptive innovations can take over the market and transform the industry.
The first key to understanding disruptive innovation is to recognize that it often starts in a niche market or a market that is not being served by the dominant players. For example, when the first personal computers were introduced in the 1970s, they were not seen as a threat by the established mainframe computer companies. This is because personal computers were initially only used by hobbyists and individuals, rather than large corporations or government agencies that were the main customers for mainframe computers.
However, personal computers gradually improved in quality and functionality, and as the technology improved, they became more attractive to mainstream customers. At the same time, the price of personal computers was falling, making them more accessible to a wider range of consumers. Eventually, personal computers became powerful enough to compete with mainframe computers, and many of the established mainframe companies went out of business.
Also salient to disruptive innovation is that it often involves a new business model or a new way of delivering value to customers. For example, when Amazon was first founded in 1994, it was seen as just an online bookseller. However, Amazon quickly expanded its product offerings and developed a new business model based on offering lower prices and greater convenience than traditional brick-and-mortar retailers. This business model was disruptive to the traditional retail industry and has led to the decline of many traditional retailers.
Also inherent to disruptive innovation is that it often involves a different set of skills and capabilities than the established players in the market. For example, when Uber was first introduced, it was not a taxi company, but a technology platform that connected riders with drivers. This required a different set of skills and capabilities than traditional taxi companies, which had focused on owning and operating a fleet of vehicles.
Another part of disruptive innovation is that it often involves taking risks and embracing uncertainty. Disruptive innovations often require significant investment, and the outcomes are uncertain. For example, when Tesla was founded in 2003, it was seen as a risky bet. Electric cars were not yet mainstream, and the established players in the automotive industry were not investing heavily in the technology. Nonetheless, Tesla bet that electric cars would become more popular in the future and invested heavily in developing its technology and manufacturing capabilities. Today, Tesla is one of the most valuable car companies in the world.
In the end, disruptive innovation is a powerful force that can transform industries and create new opportunities. It often starts in a niche market or a market that is not being served by the dominant players and involves a new business model, a different set of skills and capabilities, and taking risks and embracing uncertainty. To stay ahead of the curve, companies must be willing to innovate and adapt to new technologies and business models, even if they seem irrelevant or inferior at first. By doing so, they can position themselves to be the disruptors rather than the disrupted.