In his book “The Innovator’s Dilemma”, published in 1997, Clayton Christensen had coined the term ‘Disruptive Innovation’, where he described it as an innovation that creates a new market by discovering new categories of customers, and displaces an existing market.
Disruptive innovations strategically disrupt the market by displacing an earlier technology through advancing its existing value proposition. And while the theory of disruptive innovations was introduced by Clayton Christensen, and although there has been a stronger buzz on the topic lately, this is by no means a new concept, but rather, it has existed for as long as we humans have, and possibly before that.
For example, have you ever wondered why they stopped making analogue radios? It is because the cooler, portable, and lower battery consumption transistor radio — although lower sound quality — emerged to the scene. But the deterioration of analogue was not immediate, as the sound quality of the transistor radio improved; it slowly took over the market and subsequently overthrew its competitor.
Moreover, did you know that in 1986 calculators contributed to 41 per cent of the world’s general-purpose hardware capacity to compute information? This percentage diminished to less than 0.05 per cent by 2007.
Calculators never became obsolete. Instead, they evolved from Wilhelm Schickard’s mechanical calculator in 1642 to the early 1970s when electronic pocket calculators took over and ended the manufacturing of mechanical calculators. And most recently, the integration of calculators to our smartphones and hand-held devices.
Likewise, how many times have we witnessed strong and dominating companies retracting or collapsing, with the glimpsing dawn of a new technology? A classic example would be the one of a renowned film-based camera manufacturer that was caught napping when the digital photography era began. By the time the company entered the digital camera domain, its market was already seized by digital camera giants likes Canon and Nikon. The irony being this company had invented the core technology used in the digital cameras, yet it failed to capitalise the digital camera market.
With that in mind, it’s important to capture the essence of disruption, it is not a business model that an organisation can adopt or plan; rather, organisations must prepare themselves for mitigating such disruptions. It was not that the camera manufacturer in the example above was not innovative, just that it was slow to adapt the transition to digital photography.
Nowadays, organisations are becoming more aware of this growing trend, and hiring teams of experts to keep up with this rapid worldly advancement of disruptive innovations. The theory of disruptive innovations has summoned the need for a niche skill set that could anticipate and adapt to sudden market changes.
As such, there is now an increasing demand for business designers and innovation strategists, two positions that did not exist just a couple of years ago. One who takes the risk to enhance his/her skills on that technology in early stage can reap benefits to boost the career growth.
Keep in mind that disruptions are never announced, they just happen, and specific innovations would trigger that. And while companies want their CEOs and teams to evaluate the strategic risks of adopting new trends and technologies, the challenge with strategic risks is that often there is no historical information to analyse the business impact of these trends given they are new.
However, if risks were spotted and mitigated early on, this can be the game-changer for the company. But if an organisation overlooks a trend or technology, then there is an increased risk of its competitors moving faster and embracing the trends or technologies in question. And so my advice is this: Done ignore and never fear, just dive in and learn to swim!
The writer is the managing director of Monster.com (India, Middle East, South East Asia and Hong Kong).