The concept of disruptive innovation has become a widely used term in business, to the point where it is both a cliché and a valuable tool for business planning and execution. The elegant power of the original concept is part of the reason that the idea has gained so much traction, and why it is used so liberally to describe businesses from Apple to the newest digital start-up. The value of a term however (and language more generally), is the creation of common understanding. Given the broad range of phenomena it covers, is it really possible to put the disruptive innovation ‘genie back into the bottle’ to allow better conversations about what it is and what it means?
Instead, it’s likely that we will continue to hear disruption applied in a number of ways. My observations of discussions on disruptive innovation suggest that there is a spectrum of disruption containing at least three discernable points at the moment – disruption as a substitute term for competition, disruption to describe change created by the application of enabling digital technologies and disruption based on technological innovations themselves.
When disruption is used as a substitute word for competition it is usually used to describe the entry of a new competitor to a marketplace. For example, at a basic (and trivial) level, opening a new coffee shop next to an established one is disruptive. The owner of the existing shop has to change the way they do business, and it disrupts their market, their time and their customer base; sometimes to the extent that the original business fails. So you could argue that disruption is a legitimate way to describe this situation, and it is often used in this way.
The next point in the spectrum relates to the use of digital technologies to create new business models which compete with established companies. In this respect, disruption is often driven by disaggregation of supply chains. The myriad companies that leverage mobile app technologies to access niche, global markets are a good example of this. Rather than creating radical business models, they are accessing fragmented, distributed market places through the use of digital technologies (like this blog…!). Some will develop to the point where they disrupt established markets through the application of these enabling technologies. However, they rely on other technologies to do so, rather than creating these disruptive innovations themselves.
At the other end of the spectrum is disruptive technological innovation. This type of disruption is closer to the type from which Christensen drew his original insights. In that case, companies were developing hard disc drives that served nascent sectors of the computer industry, but their innovations eventually displaced their incumbent rivals. Business model innovations could also be placed in this category, particularly where they initially serve alternative markets before disrupting mainstream incumbents. This is probably the most difficult type of disruption to pull off, particularly if the innovation is capital intensive, or relies on established, complementary infrastructure to operate.
In the end however, disruption is about impact. It doesn’t matter what the source of your competitive advantage is, whether it be location, a business model, an enabling technology or an original disruptive technology. And like most spectrums, you could define a whole range of disruptive business activities, combining those described above or new ones altogether (for example, see here).
What do you think? Are there other categories of disruptive innovation out there that are worth adding to the spectrum of disruption?