Disruptive Or Discontinuos Innovation

DISRUPTIVE OR DISCONTINUOS INNOVATION:

The word disruptive innovation first appeared in 1997 in one of the best seller THE INNOVATOR’S DILLEMA. In this book one of the professor from Harvard Business School Clayton Christensen investigated regarding innovations that were radical in nature and why these were reinforced in incumbent’s position in some of the certain industry in contrary to all the previous models like Henderson-Clark model can predict. Innovation has become an important key to success in this ever advancing world. Innovations provide a company with a competitive advantage. But on the other hand it also increases uncertainty in the market place. Many organizations does not agree to give new innovations a chance, therefore the more radical innovation it is, less likely to get acceptance by the organizations and market. (Prahlad, 1994) Innovation can be from sustainable or Incremental innovation to Disruptive or radical innovation. SUSTAINING VS DISRUPTIVE INNOVATION Sustaining innovation helps established companies in improving their performance in existing products and dimensions of mainstream of customer’s value. Whereas Disruptive innovation have the characteristics of the products that traditional customer segments may not need. These innovations might be simpler or cheaper and may have inferior quality if compared to existing products. Examples of disruptive innovations would be like Telephone which disrupted the Telegraph, Semiconductors which in disrupted vaccum tubes, Steamships instead of sailing ships. When we talk about innovation and growth, corporate faces a paradox. If we look at the identification of visionary opportunity it is important for the long term growth prospects of an enterprise, while on the other hand operational challenges, mandatory focus on quarterly revenues for organisational growth are the short term objectives. Hewlett-Packard got long history of introducing new technologies and products. Either they have revolutionized the existing industries or have created totally new markets. Its inkjet printer platform is an example of discontinuous innovations because this radical technology replaced dot-matrix printing which in turn helped in creating desktop printer industry and it propelled HP into the leadership position of a market of million dollars. (kaplan, 2008)

DISRUPTIVE INNOVATION Disruptive innovation is also known as a “changes the game”. It kills an existing business and also offers huge opportunities in terms of profit growth. A disruptive or radical innovation can be defined as a process, product or service which offers reduction in cost or improvement in performance that it change existing markets and make new ones.(fig 1) (Assink, m.. 2006) Disruptive innovation can be defined as :

“A successfully exploited product, service or business model that significantly transforms the demand and needs of an existing market and disrupts its former key players” ((Assink, m.. 2006)

(Assink, m.. 2006)

This figure explains about the risk organisation faces while going for disruptive innovation. When the company is at incremental innovation and in existing market they are at low risk but as soon as they move new market via breakthrough innovation it started facing high risk. DISRUPTIVE INNOVATION PROCESS The following diagram explains about disruptive innovation process first of all concept of innovation is to be defined. It has to be planned keeping in mind all the possible prospects and outcomes. A proper framework has to be made so that it can be accepted by top management. After being accepted it is then tested and prototyping and we then are able to find out problems and criticism to work on that. Identifying the problem finding the loopholes and then work on it and develop the project again.

(Assink, m.. 2006) INHIBITORS OF DISRUPTIVE INNOVATION

Organisation encounters various external and internal barriers which in their way create right capabilities and in turn support innovation. Barriers to disruptive innovation has been classified in various cluster like the Adoption barrier, The Mindset Barrier, The Risk Barrier, The Nascent Barrier, The infrastructural barrier. (kaplan, 2008) Some of the inhibitors are:

Dominant design: Most of the market winners have become losers because they lost their innovative edge. Most of the enterprise restricts themselves for incremental innovation, like improvement in technologies, designs, these are called dominant design. They are in fear of being overtaken by the companies which will introduce a disruptive innovation and in turn can hit the market. Organisation dualism : There may be conflict between incorporating disruptive innovation and maintaining successful business which will enable company to be competitive. One of the hardest job organisation face is to maintain balance between centralisation and decentralisation. For a routine based job. Continuos improvements, hierarchical structure is less effective for radical innovation development. The organisation mostly lack two fold structure theres has to be consistency for incremental innovation and flexibility and capabilities for the radical innovation. (Assink, m.. 2006) Excessive Bureaucracy : It is often referred to large organisation who demand allegiance to rules and they are not in favour of creativity because of which they are always slow to react and are not willing to take risk as they have spend so much in maintaining their status quo that they are not willing to stimulate disruptive innovation. Generic conservatism and learning deficiency are one of the most sought after reasons of why large companies are not ready to embrace radical innovation. Preclude status quo: deviations are not always appreciated especially for large corporations yet variety is sometime treated as negative in many big organisation. Many companies prefer stable environment so that they can be market leaders. Yet dominant design , maintaining standards can be barriers to so called innovation. (BECOMING A PART OF THE NEW INNOVATION PARADIGM, 2006) Lack of distinctive competencies: Core competencies sometime prove to be very useful but can sometime become core regidities. In many organisation there is lack of management ability to adapt specific skills needed for managing the challenges because of disruptive technology. For radical innovation organisation has to face radical uncertainity. Which means that company doesn’t even know which knowledge it is lacking in . Lack in the knowledge of technology and managerial know how limits the capability of unlearning. (Prahlad, 1994) Conclusion Disruptive innovation is not a one time effort, its a continuos process as we saw in the diagram It improves overall capability of organisation. As we saw several barriers on the way of large corporation when they try to develop or commercialise on disruptive innovation. These inhibitors are partly interdependent and interrelated.

REFERENCE Assink, M.. 2006. Inhibitors of disruptive innovation capability: a conceptual model, European Journal of Innovation Management, 9 (2). Pp. 215-233.

BECOMING A PART OF THE NEW INNOVATION PARADIGM. (2006). STRATEGIC DIRECTION , 30-32.

kaplan, S. (2008). Discontinuos innovation and the growth paradox. strategy & leadership. Prahlad, h. g. (1994). competing for future. boston: harvard business school press.