If there is a term that has been at the centre of almost every strategy-related discussion in the past decade, it is ‘disruptive innovation’. The term, famously coined by Harvard Professor Clayton Christensen, has been the most common explanation offered when any industry has been shaken upside down, by bolts from the blue.
Over the years, thinkers around the world have disputed the school of thought that the next big innovation cannot be predicted. In fact, many claim that innovation can be controlled and structured. So, what exactly is disruptive innovation and why is it so powerful? And, can we look into this phenomenon to improve our way of life?
This can be well explained with the classic example of mobile phones and wired telephones. In the late ’90s, handsets were considered a luxury, purchased by very few. Both However, people accepted the fact that it was handy, comfortable and trendy. Continuous improvements and just half-a-decade later, wireless handsets had eaten almost completely into the market share of wired telephones.
From luxury, it gradually moved on to become a necessity. Telecom companies failed to understand that they were not in the business of telephones, but in the business of communication. By the time BSNL slowly woke up to the fact that telephone bills were not as high as before, private players had captured the lion’s share in the mobile network business.
This is one of the best examples of disruptive innovation. market of mainframe computers, e-mails eating into the pop
Current experiences tell us that though the disrupters are familiar, their impact is not predictable. Wikipedia was known and used by everyone for a long time, but no one expected Wikipedia to topple the hard bound encyclopaedias from our book shelf. Firms need to look at business as customer-centric rather than product-centric. With careful planning and strategising, firms would be able to innovate disruptively in their own domains. Microsoft now offers cloud solutions to save its office documents. This is because Microsoft understands that the future is in cloud computing and hence invests in it.
For society Can a strategy so powerful be leveraged and used for sustainable development for society? The answer is affirmative. Every service has to be visualised in a customer-centric scenario. This will enable clarity of thought in understanding what the customer will want in the future. It is to be understood that disruptive innovation is rarely about satisfying basic needs of the customer; it is almost always about creating new needs and wants for the customer.
This can be implemented in a social service industry, like education. Here, the student is the consumer. Once the industry experts start analysing the service from this perspective, insights for improving education can be obtained. Disruptive innovation is not merely about creating more revenue or market space, but about easing the lives of consumers. From the perspective of a society, disruptive innovations can transform the lives of millions, allowing better accessibility to education, food, water, healthcare and overall lifestyle.
Manoj N. is pursuing PGP in Management at Indian Institute of Management, Ranchi