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Disruptive insight







Disruptive insight

Disruptive insight 04/09/2004 04:06 PM

Ideas that were once fresh and innovative eventually become stale and hackneyed. A simple insight, convincingly ...




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Disruptive insight

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Microsoft: Windows XP SP2 Will be
Disruptive


Microsoft: Windows XP SP2 Will be
Disruptive
03/06/2004 02:02 AM
The software giant has created an online training course for developers to explain the implications of the security-centric OS service pack.

Disruptive Innovation: The Need for a
Better Methodology


Disruptive Innovation: The Need for a
Better Methodology
06/05/2005 11:12 PM
The Innovator's Solution tells you what you need to do to cannibalize the markets of incumbents and create entirely new markets, by focusing on the needs of over-served customers and non-customers. But it's a lot harder in practice than in theory, and it needs some unique skills and hard-to-obtain knowledge.
InnProcessNew
[Posted from Orlando]

In previous articles, I've summarized Clay Christensen's approach to innovation (established companies focus on what he calls 'sustaining' innovations while new entrants focus on 'disruptive' ones), and about the research approach that he suggests for identifying and assessing innovation opportunities.

His second book, The Innovator's Solution, looks in greater detail at disruptive innovation, which he breaks into two types:
  • Low End Disruptive Innovation: This entails offering a lower-cost product to existing over-served customers, which incumbents don't care about because they're at the low-margin end of their customer base; then as technology improves, the disruptor gradually eats into the incumbents' primary markets from below. The classic example of this is steel minimills, which initially focused on the low-end, low-margin rebar market (which the integrated steel makers were pleased to vacate), but then used new technology to move upscale to the point they have now stolen even the high-end market (sheet steel) from the giants. To achieve this, it's essential that the innovation not be suitable to or adaptable by the incumbents -- that they don't find the disruptor's initial business model attractive; otherwise, the incumbents will bring their considerable resources and strong customer relationships to bear to make the innovation a 'sustaining' one for them, and ward off and defeat the disruption attempt.
  • New Market Disruptive Innovation: This entails developing and offering a product with benefits previously not available at all or which are very inconvenient to customers, and hence creating entirely new markets for entirely new groups of customers. The personal computer and personal copier are examples of this. In some cases a New Market Disruptive Innovation can later be applied to become a Low End Disruptive Innovation as well.
The part of Innovator's Solution that most intrigued me was the section on how to identify potential disruptions and how to identify customers for them. To identify potential disruptions, he suggests, you should 'segment' the market by the circumstances of use of the product or potential product (i.e. what the product gets 'hired to do' or what 'job it does' that needs to be done), rather than by customer identity (demographics) or product attributes (category). The focus is therefore on when/why/how it would it be used, not what it would feature or who would use it. This is a needs-driven strategy, requiring a lot of research & cultural anthropology. It means discovering who needs 'coolth', and when and how they need it, not who needs an air conditioner.

This is hard for established, risk-averse, inflexible companies to do because:
  • they have a fear of too much focus (putting all their eggs in one basket, in case it's the wrong basket);
  • their shareholders and existing line managers insist on being able to quantify outcomes in advance;
  • their existing channels are organized by product or customer demographic, not circumstances of use; and
  • their advertising and branding are also done by product or customer demographic.
Hence it is often best to have the innovation in established companies done by a new, autonomous division or group, free from the constraints, prejudices, risk-aversion and 'why rock the boat' thinking of the existing operations.

To identify customers for disruptive innovations, Christensen says you need to look for:
  • People and companies who have a need but lack the money or skill to meet it with existing products;
  • People and companies who have no alternative way today to do the job your product or service could help them do; and, of course,
  • People and companies who are over-served, interested in a lower-cost, simpler product without all the extraneous and rarely-used bells and whistles of current products.
It's important that these potential customers perceive the product to be 'foolproof': easy to use, easy to learn, easy to buy (though if the product is for recreational use, customers may buy a product with a steeper learning curve if the learning is fun).

Equally important is that there be available, and hungry, channel partners (sources of supply, distributors, retailers, marketers etc.) to help you get it to market -- if these partners and their materials and skills are scarce, or disinterested in you, customers may give up on you before you're able to deliver reliably.

The rest of the book provides suggestions on the right roles for your company in developing the innovation, how to partner with other appropriate companies to optimize competencies and synergy, how to find the non-commodity, high profit points in the customer value chain, the importance of setting up the right people, process, values, alliances and organizational structure for innovation, how to align your strategy to support innovation (using an emergent, complex system-friendly strategy), and how to address financing and risk issues in innovation ventures.

The final section addresses the role of senior management in disruptive innovation. Leaders, he says, must exercise three key responsibilities: (a) allocate appropriate, patient resources; (b) establish a process to continuously generate disruptive innovations; and (c) detect and adapt to changes in markets and other elements of the system. The four elements of a 'disruptive growth engine' therefore are:
  • start before you need to (don't wait for a crisis);
  • put a senior manager in charge (executive sponsorship is essential);
  • create an expert team of movers and shapers (and allow them to 'self-manage' the people, processes, and values to keep them in sync with the commercialization process for disruptive innovations); and
  • train the troops (i.e. customer-facing people to discover and tap into emerging and potential needs)
In these areas, Christensen is on comfortable and solid ground.

But I keep coming back in my thinking to how an organization can actually apply his earlier advice on how to identify potential disruptive innovations and how to identify customers for them (and which comes first anyway?) It's a lot easier in theory than it is in practice, as I can tell you from personal experience.

Let's take the example of a company that has expertise in the textile industry, for example. They have an established market in specialized blankets, and some scientific expertise in weaving and in thermal properties of materials. If they're threatened by new low-cost Asian competitors in this mature market space, how would they go about becoming a disruptive innovator? They wouldn't talk to existing customers -- that's for sustaining innovation not disruptive innovation. They wouldn't do competitive analysis -- except perhaps if they could identify some over-served customers. Other than raw imagination and a lot of serendipitous reading and lateral thinking, it's hard to imagine how such a company, even with a separate, empowered innovation team, could begin to identify either the unmet needs within their competency to deliver, or the customers that have these needs.

What Christensen needs to add is a whole process to surface these needs and customers. Who, other than established buyers of blankets, might be interested in textiles with thermal properties? Hospitals and doctors dealing with hypothermia? Insulation companies? Gardeners and farmers seeking to protect crops from frost? Swimming pool cover manufacturers? Expedition outfitters? And since good thermal properties also insulate against heat, should we also consider cooler manufacturers, refrigerators, umbrella makers, UV-ray protectors etc.? The possibilities are endless. How do we effectively brainstorm and then filter the potential customers and potential opportunities?

The answer, I think, is a discovery process, but one somewhat different and more dependent on brainstorming, creativity, very broad environmental scanning, research, cultural anthropology and exploratory conversations than the one I have
suggested< /a> for achieving understanding in complex situations.

How, do you think, should such a discovery process be structured? If it were your job to develop the process to find new customers for new products meeting new untapped needs, that are within your company's competency to provide, how would you go about it?

This process just might be the holy grail of entrepreneurship.

New technique can help tame disruptive
kids


New technique can help tame disruptive
kids
03/23/2005 08:01 AM
Chicago Tribune Mar 23 2005 12:02PM GMT

Disruptive Technologies Are Boring And
That's Their Secret


Disruptive Technologies Are Boring And
That's Their Secret
05/19/2004 07:17 PM
While most of this article focuses on other elements of conversations between two of my favorite strategic thinks, Clayton Christensen and Andy Grove, there is a great quote where Grove points out the Christensen the problem with talking about how "disruptive technologies" come out of nowhere to surprise established companies: "Clay, I see what's wrong with your idea. You shouldn't call them disruptive technologies, you should call them straight, boring technologies." That sentence alone explains why so many companies still fail to see the threats of disruptive technologies. Christensen's work is now quite famous, and it's difficult to find a tech exec who hasn't (said they've) read it. You also hear execs all the time talk about how they now know to pay attention to disruptive technologies - but you still see them missing the boat, often while exclaiming how vigilant they are in spotting disruptive technologies. Grove's point goes a long way towards explaining that (even if half-jokingly). Most execs ignore disruptive technologies because they don't think they're actually disruptive. They're "straight, boring" technologies that don't seem likely to create a profit. That also corrects that fallacy the disruptive technologies "come out of nowhere." That's rarely true. The reason they seem to come out of nowhere is that established companies ignore them for so long, that by the time they do realize they're a threat, it's too late.

Virtualisation 'most disruptive PC
technology'


Virtualisation 'most disruptive PC
technology'
08/10/2004 12:28 PM
Infomatics Aug 10 2004 4:07PM GMT

BitTorrent and RSS Create Disruptive
Revolution


BitTorrent and RSS Create Disruptive
Revolution
12/16/2003 12:29 PM
BitTorrent and RSS Create Disruptive Revolution .. syndication requires full posts, not headlines .. Steve Gillmor .. opportunity

eweek.com/article2/0,4149,1413403,00.asp
track this site | 5 links


BitTorrent and RSS Create Disruptive
Revolution.


BitTorrent and RSS Create Disruptive
Revolution.
12/15/2003 11:34 PM
Steve Gillmor: BitTorrent and RSS Create Disruptive Revolution. BitTorrent as it is today is not suitable for distributing RSS feeds, because the centralized tracker uses just as much bandwidth as a modern Web server. P2P news delivery is a great concept, but to make BitTorrent suitable for RSS you'd have to make enough changes that you might as well start from scratch. I'm still holding out for Newswire as the solution.

VON Highlights Disruptive Tendencies of
VOIP


VON Highlights Disruptive Tendencies of
VOIP
06/09/2004 02:11 PM
Current business models for voice no longer work, says an analyst at the VON Europe show.

Dvorak Claims Disruptive Technologies
Don't Exist


Dvorak Claims Disruptive Technologies
Don't Exist
08/02/2004 04:42 AM
John C. Dvorak seems to exist solely to show just how little he understands about technology and business these days. His latest piece points to a few bad examples of what might be disruptive technologies and then claims there's simply no such thing as a disruptive technology, as described by Clayton Christensen. It appears Dvorak has never actually read Christensen's books, but assumes he knows what they're about after hearing Christensen say the idea of disruptive technologies came to him while watching how DEC failed. Maybe the problem is that, like others before him, Dvorak misreads "disruptive" and assumes there needs to be a "big bang" (he mentions the atom bomb as being disruptive), when the truth is "disruptive technologies" are really "straig ht, boring technologies. In the meantime, I'd suggest that Dvorak take a look at VoIP and camera phones, but it appears he's already trashed camera phones for not being good enough (the first sign of someone who doesn't understand disruptive technologies) and while he seems to like VoIP and admit that it's the "future of telephony," it never occurs to him that it's disruptive.

Disruptive Innovations Wins Contracts to
Provide Mozila-Based Solutions to Two
Major European Firms


Disruptive Innovations Wins Contracts to
Provide Mozila-Based Solutions to Two
Major European Firms
04/16/2004 11:43 PM

Insight into ocular mod


Insight into ocular mod 12/24/2004 12:29 PM
David Pescovitz: Following up on my earlier post today about JewelEye, Shannon Larratt of the excellent Body Modification Ezine points to his wife Rachel's personal account of Cosmetic Extraocular Implantation. Shannon says Rachel was the first American to have the procedure done. And I was very wrong in my original post: self-installation is clearly not an option. Rachel writes:
"The procedure itself involved injecting a liquid to elevate and separate the layers of the eyeball, which helps the surgeon with the placement of the implant under the conjunctiva (in old age, many people build up calcium deposits in this area, so our eye is actually designed to handle material stuck there). A small flap is cut, and the implant is inserted. After it was in place, they began suctioning out the liquid that was used to elevate the layers. After a few weeks, the liquid will dissipate and the implant will become even more visible."
Link

Compaq Insight Integration with SMS 2.0


Compaq Insight Integration with SMS 2.0 06/22/2004 01:56 PM

New insight into ancient Americans


New insight into ancient Americans 01/04/2005 07:19 AM
CNN Jan 4 2005 11:27AM GMT

Consumer Insight Why People Buy


Consumer Insight Why People Buy 12/15/2003 05:57 AM
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Pipe 1.2 offers scripting insight


Pipe 1.2 offers scripting insight 03/22/2005 03:20 PM
Pipe 1.2 for Mac OS X is a Mac OS X Cocoa application made for developers and people who are interested in learning and experimenting with scripting languages.

"insight to the current Iraqi mindset"


"insight to the current Iraqi mindset" 06/27/2004 09:00 PM

Graphic insight into Khobar raid


Graphic insight into Khobar raid 06/06/2004 06:51 AM
Saudi militants post an account of the attack on a housing compound - that left 22 dead - on the internet.

Get insight on how Microsoft will help
beat the RIAA


Get insight on how Microsoft will help
beat the RIAA
10/31/2003 04:59 AM
Very interesting read and perspective on how Microsoft may help consumers retain fair use rights. [Marc's Voice]...

great insight into the types of
developers


great insight into the types of
developers
08/17/2004 11:14 AM
Angels, Assholes and Morons .. Mark Pilgrim

diveintomark.org/archives/2004/08/16/specs
track this site | 3 links


An IT Manager’s Insight into Mobile
Security


An IT Manager’s Insight into Mobile
Security
01/22/2004 05:03 PM

Interesting Microsoft Insight from
Javalobby


Interesting Microsoft Insight from
Javalobby
03/30/2005 07:25 AM
A couple of weeks ago, Microsoft hosted a Technology Summit and invited many prominent members from a variety of different platforms (Linux, Java, Flash, etc.) to our campus in Redmond. They spent two-and-a-half packed days listening to presentations, learning about our products and tools, asking hard questions, and providing great feedback. The founder of Javalobby, Rick Ross, has recorded a summary of his insights and thoughts based on the summit.

Insight StrikeFinder Digital Weather
Avoidance


Insight StrikeFinder Digital Weather
Avoidance
08/20/2004 08:05 AM

strikefinder.jpg imageBy detecting and processing electrical activity from lightning strikes, the Insight StrikeFinder helps pilots to avoid dangerous weather that can turn a small aircraft into a aluminum coffin. Compiling and interpolating data from thousands of strikes "gleaned from the background noise," the StrikeFinder lets pilots determine if that impending storm cloud is really as dangerous as it might seem, preventing unnecessary detours that might take them unnecessarily off course.

The StrikeFinder is available in two models - the new model with an ultra-bright LED display can be had for just $4,700, while the original models are a relative bargain at $3,900. (Thanks, Rob!)

R ead - Catalog Page [AircraftSpruce]


Digital Insight shares fall on CFO
resignation


Digital Insight shares fall on CFO
resignation
09/08/2004 08:04 PM
SiliconValley.com Sep 8 2004 11:03PM GMT

Listen In: Insight Out: eMusic gains,
TVT losses


Listen In: Insight Out: eMusic gains,
TVT losses
06/22/2005 02:33 AM
eMusic makes something of its new filtering and sorting system, Power Charts. TVT Records' huge settlement over Warner Music Group is tossed out.

Insight Bowl: Oregon St. 38, Notre Dame
21 (AP)


Insight Bowl: Oregon St. 38, Notre Dame
21 (AP)
12/29/2004 06:12 AM
AP - Derek Anderson and Oregon State finished off Notre Dame's dreary season with a 38-21 beating of the Irish on Tuesday night in the Insight Bowl.

Listen In: Insight Out: Of the charts,
Grokster week


Listen In: Insight Out: Of the charts,
Grokster week
03/31/2005 05:57 PM
Radio play and MTV drive traditional record charts but what influence allows M.C. Hammer to chart at the iTunes Music Store? And can balance be found in the latest P2P debates? Playlist’s Glenn Peoples offers his take.

HP Insight Manager 7 and Rack and Power
Management 1.1 on the same PC?


HP Insight Manager 7 and Rack and Power
Management 1.1 on the same PC?
06/20/2004 11:11 AM

More Insight On Longhorn's Avalon And
Aero Design


More Insight On Longhorn's Avalon And
Aero Design
05/23/2004 04:25 PM

insight into the birth of the kerry
intern rumor


insight into the birth of the kerry
intern rumor
06/01/2004 04:18 AM
first person from alexandra polier, no less

An IT manager's secret insight into
mobile security


An IT manager's secret insight into
mobile security
01/28/2004 07:25 AM

ZDNet UK - Insight - What can you learn
from a hacker site?


ZDNet UK - Insight - What can you learn
from a hacker site?
01/22/2004 09:14 AM
http://insight.zdnet.co.uk/communications/networks/0,39020427,39119208 ,00.htm Ok, I admit it. I talk to hackers. Not just any, some have been on TV and CNN.com with FBI agents. I have never asked them for How-To but love to hear about their "high level" view of Security Policies they were able to penetrate. It has been a taboo debate among the hardcore security folks. I know some hackers who are now security Gurus for some of the world’s largest media outlets. They never...

Online Activist Seeks Offline Insight


Online Activist Seeks Offline Insight 01/16/2004 01:00 PM
Steve Cisler has been online since 1985. As of Sunday, and for at least the next several months, he'll be cutting his direct links to cyberspace.

New Look At Layered Material Lends
Insight To Silicon


New Look At Layered Material Lends
Insight To Silicon
12/02/2003 05:27 AM
Space Daily Dec 2 2003 4:50AM ET

LWC Research Announces Free Market
Insight Newsletter


LWC Research Announces Free Market
Insight Newsletter
04/06/2005 03:14 AM
Focusing on the measurable value of enterprise systems and the business applications of emerging technologies, LWC Research announces Market Insight, a free monthly newsletter. [PRWEB Apr 6, 2005]

Insight UK hits back at 'jobs on the
rocks' claim


Insight UK hits back at 'jobs on the
rocks' claim
01/29/2004 09:58 AM
'Committed to Sheffield' says MD

ADVIZOR Provides Business Intelligence
and Data Visualization Insight


ADVIZOR Provides Business Intelligence
and Data Visualization Insight
03/22/2005 04:24 PM
The B-EYE-Network and Claudia Imhoff recently interviewed President Doug Cogswell. [PRWEB Mar 22, 2005]

Wireless Internet Soars Nearly 30% -
Ipsos Insight Report


Wireless Internet Soars Nearly 30% -
Ipsos Insight Report
03/19/2005 03:02 AM
Digital Lifestyles Mar 18 2005 8:36PM GMT

Teen bl0gs offer insight into feelings
about life


Teen bl0gs offer insight into feelings
about life
04/02/2005 09:20 AM
Chicago Tribune Apr 2 2005 12:24PM GMT

Brain Studies Reveal Where Aesthetic,
Insight Reside


Brain Studies Reveal Where Aesthetic,
Insight Reside
04/13/2004 12:43 AM

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Disruptive insight

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