INSIGHTS

    What Disruption Really Means

    It’s become a buzz word and You’re probably using it wrong.

    Disruption is one of the most popular words in business today. What dos it mean? Should you even care? Does success require you to disrupt?


    Here’s all about disruption. Absorb. And clear the mess.


    dis·rup·tion

    /disˈrəpSH(ə)n/

    noun: disruption; plural noun: disruptions

    disturbance or problems that interrupt an event, activity, or process.


    In business the term “disruption” really took off with Clayton Christensen’s 1997 book, The Innovator’s Dilemma. In it, Christensen introduced the idea of “disruptive innovation.” He used this phrase as a way to think about successful companies not just meeting customers’ current needs, but anticipating their unstated or future needs. His theory worked to explain how small companies with minimal resources were able to enter a market and displace the established system.


    However the term ‘disruption’ quickly navigated a life of its own. Suddenly everyone was either ‘disruptive’ or ‘innovative’ . Christensen, himself was so concerned with the disruption the term itself had taken on that he published a 2015 update on what the term really should encompass.


    Here is the key;

    A disruptive business is likely to start by either satisfying the less-demanding customers or creating a market where none existed before. So “when mainstream customers start adopting the entrants’ offerings in volume,” Christensen explains, “disruption has occurred.”

    One problem with identifying disruptors is that often they need lots of time to make real impact. The process is long; we’re not talking weeks or months, even. Another issue? Often a disruptor’s business model looks completely different than what’s already there, so it can be hard to see a disruptor in its early stages.


    Anything remotely innovative started to be called disruptive.


    But here are a few things

    - not every successful business needs to disrupt.

    - not every disruption may be a business success

    - just because you think something is disruptive, doesn’t mean it actually is


    UBER - The Misquoted Case - UBER Is Not A Disruption

    Chances are you’ve read or heard the words disruption and Uber used in the same sentence. BUT according to Christensen’s theory, Uber doesn’t actually fit the true definition of disruptive innovation. Why? Because the service is seen as better than taxis and the market already existed.


    According to the theory the ‘disruptive’ companies often offer a scaled down version of what exists in the market and start nibbling away the bottom of the pyramid. And move on from there to finally upscale.


    Think NETFLIX

    When Netflix started, Blockbuster thought it seemed insignificant. Who would want to wait for DVDs to arrive? Blockbuster didn’t anticipate where the future of watching movies was going; when Netflix came to them to sell their business - Blockbuster declined.


    If Netflix had started out targeting Blockbuster’s core market, it’s likely the video rental giant would have launched “a vigorous and perhaps successful counterattack,” explains Christensen. But because of the time that disruption requires, Blockbuster didn’t realise it was under threat until Netflix tapped into streaming — then it was too late. Today, Netflix is worth billions and Blockbuster is bankrupt.


    Why is Disruption So Popular?

    It’s difficult to spot disruptive opportunities. An effective disruption can be a game changer. Its high risk and high rewards. Who doesn’t want to change the landscape of the marketplace?


    So what’s the key to disruptive innovation? The phrase “disrupt or be disrupted” is a misnomer.


    In many ways, debating whether or not Tesla or Apple fits the disruptive model or not misses the point.


    What matters more is to be able to anticipate your customers’ needs and experience - that’s where the biggest innovative opportunity is.


    Think of it as disrupting your business as usual !!


    Chetan Walia

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