Listen to the podcast (approximately 4 minutes). 24 Jan 2013 – disruptive innovation
In our society today, the word innovation is often over-used. There is a hair salon down the street from my office that claims “innovative hair design,” but their equipment and supplies are essentially the same as every other hair salon in my neighborhood. Their clientele sport hair styles that are….run-of-the mill. Unfortunately, the price structure might be the only difference between the “innovative” hair salon and others – they charge more than their nearby competitors!
Innovations are normally considered to bring a new product or technology to the marketplace. Perhaps an innovation allows a manufacturer to sell the product at a lower price due to a competitive advantage that makes the manufacturing process more efficient. An innovation may allow a consumer to interact with the product or service in a different way.
Disruptive innovations are yet another categorization of innovations. Over the next few weeks at the Idea Incubator, we will focus on the definitions and responses to disruptive innovation. You can learn more about disruptive innovation in an exclusive Global NP Solutions thought leadership paper, “How to Disrupt Innovatively.”
What is Disruptive Innovation?
Clayton Christensen’s seminal work, “The Innovator’s Dilemma(1)” in the mid-1990s introduced the term disruptive innovation. He offers a case-based definition that a disruptive technology yields a simpler, easier-to-use, more convenient product that may initially underperform on a typical customer attribute yet takes a foothold in the marketplace with a certain fringe or niche market segment. Over time, the disruptive technology improves its quality and performance on standard customer metrics, and sales of the disruptive product outpace those of the existing products.
In contrast to the disruptive product, Christensen identified sustaining technologies as those that continually improve the existing products by increasing performance on the product attribute most accepted by and valued by lead and mainstream customers. Sometimes these are called incremental improvements.
In his groundbreaking work on disruptive innovation, Christensen asserts that the only way to compete against a disruptive technology is for large firms to form a spin-off venture that is small enough to address the fringe market. Many other researchers have soundly criticized Christensen’s work based on this particular assumption. We will investigate this criticism and examine further in-depth the definition of disruptive technology, sustaining technology, and innovations over the next few weeks.
In the meantime, if you have a question or comment regarding disruptive innovation, innovation strategy, or new product development (NPD), please feel free to contact me at firstname.lastname@example.org or at 281-280-8717.
(1) Christensen, Clayton M. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press, 1997.
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