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Is It Disruption or Innovation?

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Is It Disruption or Innovation?

Written by: United Outcomes

In 1997 the Spice Girls released their first single Wannabe.

In the same year, the term ‘disruptive innovation’ was coined by the Harvard Business School professor Clayton Christensen.

The idea was that established and dominant product or service providers could lose their advantage in the market to newer, smaller rivals who were offering simpler, more effective solutions cheaper.

It’s now 2018, the Spice Girls are reforming and it’s about time we looked again at disruptive.

“Disruption” has become such a pervading axiom for everything from tonic water and marketing to banking and cars.

Christensen’s disruptive concept has been subsumed by businesses desperate for an angle, for a differentiator.

The original model proposed that disruption was a business serving an overlooked segment with a different, low-cost offer, and then migrating up the value chain over time by leveraging a superior cost structure.

KAIZEN CULTURE VS GM MOTORS

But that idea wasn’t new.

Way before Posh became Mrs Beckham, Toyota changed the U.S. car market.

In 1979, GM controlled 48% of the US car market.

In 2018, it’s struggling to hang on to 17%.

Toyota using the concept of “kaizen” took the business from a purely Japanese base in the 1950s to a globally dominant position by the 1980s.

Utilising Kaizen, Toyota created a new market by offering affordable cars with a near waste-free production operating system, and fantastic quality in volume.

That was disruption.

Uber is often described as a shining example of disruptive innovation because of its impact on the taxi industry.

But is it?

Uber did not move up from the low end of the market: it targets customers who already use taxis.

It’s not trying to attract people who take public transport or drive themselves.

It’s competitive but not radically different.

It’s a challenger, because of some innovative software.

Innovative, not disruptive.

THE DISRUPTION BANDWAGON

When Geri left the Spice Girls in 1998, Netflix’s all you can eat on demand format was twinkling in the owner’s eye and it still provided a mail-order service.

Below the radar it innovated and challenged the market leader Blockbuster and won.

Did it set out to disrupt?

Or did it just set out to provide a great and different offering?

In the era of soundbites and five second attention spans the word disruption has slipped easily into the vernacular and became a standard expectation for any start-up in any industry.

It has taken on the subtext of a fight against the big boys and large corporate laziness.

Investors like it, because it suggests zero-to-hero profit opportunities.

Disruption’s obsession with toppling the leaders has not really manifested itself. Surely it’s about entrepreneurship. It’s about developing technology and innovation. Challenging existing ways to attract clients and customers.

It’s about new ways of keeping clients and customers.

Innovation and challenge are not the sole domain of start-ups and challengers.

Related: Retail Banking Innovation and The Art of The Future

It’s more difficult for oil tanker monolith corporates but it should be part of their DNA.

The key is not destruction for the sake of it. It is about applying a disruptive approach to business.

It’s about applying a challenging approach to service, products and engagement.

We don’t need to destroy to disrupt and you don’t need to disrupt to be different.

As the Spice Girls would say. “Get your act together, we could be just fine.”

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