Doug Garnett wrote a blog post titled Disruption Fear Distracts from Innovation. The Innovator’s Dilemma Re-visited.
« I recently picked up The Innovator’s Dilemma by Clayton M. Christensen for a re-read. »
« Christensen has a very tight definition of disruption. It happens when a market becomes dependent on high margin, high feature, high touch products/services and there’s an opening for a low margin, low touch, low feature product which satisfies a significant % of customers. A truly disruptive market situation is both dangerous and an opportunity – companies need be aware of them. »
« But the world isn’t so simple as “incremental innovation” vs “disruptive innovation”. So the idea of “disruption” hasn’t been as great for business as it has led to obsession. And Christensen’s case studies seem to imply “it will happen to everyone…soon”. »
« Change is constant. Innovation is constant. But when I scan the annals of innovation, disruption is NOT the primary theme. »
« Truth is, in most situations disruption is NOT the most critical risk. Unfortunately, Innovator’s Dilemma implies that it is. But disruptive risks aren’t present in most markets and catastrophic failure isn’t the outcome we should fear most for our innovation work. The biggest risk with innovation work is mediocrity. »
« The value Lithium Ion batteries added to power tools was huge.
- It should have led to a major investment on the part of pro’s and consumers replacing older tools with these far better performing ones.
- It should have led to increased margins across the board as manufacturers introduced LI on their tool lines.
- It should have led to an expansion of the tools people carried – as it enabled new entire lines of sufficiently powered, low weight tools. (In the tool market, these wouldn’t replace the higher power tools – they complement them.) »
« And yet, manufacturers missed their opportunity – starting with Milwaukee. They had to tell consumers what this exciting new innovation offered and they didn’t. Why? Investing in advertising would have meant (see Christensen’s Principles) that the innovation would deliver lower margin for the initial years while advertising built demand. Consumers had no innate sense of why they should care about LI technology. And, it turned out, none of the market players could overcome their internal structures to do that advertising. (You can read more of my analysis of the mediocrity of the returns here.) »
« For many companies and most of the time, dramatic innovations which are not disruptive are the key to long term success. »
« Companies need to limit the tendency to create high cost, high margin, high touch innovations which are too far ahead of their market. Usually the best innovations are far simpler. »