Disruptive innovation: what challenges for the company?
What is disruptive innovation?
Breakthrough innovation is a major innovation that profoundly changes a product or service, transforming an existing market by creating new value. Disruptive innovation is the development of a product or service likely to create a new market and generate new demand. Disruptive innovation is the development of a product or service likely to create a new market and generate new demand.
When do we start talking about disruptive innovation?
An idea is disruptive when it can be said to be one that nobody expected that nobody saw coming, and which has the potential to change the game and open up new territories.
An innovation that, if implemented, disrupts the functioning of an entire business sector and the practices associated with it, must be considered a disruptive innovation.
In other words, if it enables existing customers to access a product or service offering not previously offered by the company, then its disruptive nature is clearly established.
Disruptive innovation means creating new categories of products or services that didn’t exist before, but also creating new value for the company and its customers.
This opening up to new and extended markets is often coupled with a challenge to the established business model, which can even lead to its destruction.
Disruptive innovation: driving creative destruction internally
Disruptive innovation creates new growth opportunities for companies. Indeed, adopting them often means defining a new organization and new operating modes. The technologies and know-how required naturally lead to the integration of new professions within the organization. Sometimes the company’s business model is redefined by the adoption of disruptive innovation.
This new implementation inevitably contributes to the disappearance of the market as it existed until then. This constitutes a form of destruction of the pre-existing model in favor of a new one, offering the company greater potential and better adaptation to change.
Disruptive innovation thus leads the company to repeatedly question the relevance of its business model. The combination of the destructive and creative effects of disruptive innovation highlights the power of the dynamics of change that have become necessary in companies.
By destabilizing acquired equilibria in order to generate advantageous mutations in the company’s competitive system, disruptive innovation actively participates in the Darwinian selection process that operates at all levels of the organization.
Should we fear disruptive innovation?
The question is not so much whether we should be afraid of disruptive innovation, but rather of the possible consequences for the company if it refuses to consider it.
Naturally, a company implements a set of devices and resources to provide it with the greatest possible stability to address its market while maximizing its performance. In this way, the status-quo is the norm as long as growth is good and there are no dangerous players on the market.
So, when all goes well, there’s no need to worry about disruptive innovations, since they could jeopardize this solid stability.
However, it is precisely at this moment that disruptive innovation should be studied, not to disrupt the organization, but to anticipate the moment when it will be necessary to do so.
In fact, this is the main reason why companies set up intrapreneurship programs or open innovation with their ecosystems, not to develop disruptive concepts today, but to equip themselves with the capacity to do so when necessary, just as an athlete prepares for an upcoming event.
In a complicated situation, or when new competitors are cutting you to the quick, disruptive innovation can enable you to “pull through” and get back on the path to long-term growth. But it’s important to have practiced when things were going well, so as to anticipate the various possible futures.
The mistake not to be repeated: the story of BlackBerry and Nokia
A pioneer of mobile phones, BlackBerry reigned supreme in the telecommunications market for many years. The parallel with Kodak is quite obvious: refusing to see the potential of touch screens, and with a solid base of professional users, the Canadian company was stubborn.
It was finally in 2016 that it announced it would stop producing physical terminals to focus on software development and cybersecurity. It’s a story not unlike that of another former glory, Nokia. Here too, the Finn crushed everything in its path before being brutally overtaken by Apple as early as 2007.
In 2013, the former world leader sold its telephony business to Microsoft, which disposed of it in May 2016. Since then, Nokia has refocused on network equipment and healthcare solutions. While BlackBerry and Nokia are still on the move, in a few years’ time they have gone from absolute dominators in the technology food chain to mere prey viewed with a touch of disdain and nostalgia.