Sunday, February 2, 2014

The Business 'Rules' for Disruptive Innovation

 One innovation 'Rule' is breaking the rules that bind you. 

Shaping a disruptive innovation to fit the market often requires strategies, designs and product introductions that build towards the long-term vision. It demands insight, understanding, patience, persistence, and courage, among other things. What are the more specific ‘rules’ for creating disruptive products and innovations? 

Look at the problem from the customer's perspective: Companies often play in a small segment of the problem space and when seen from the customer's perspective. To disrupt you must hear the whispers of customers, contexts, inner worlds, outside worlds. The most important thing is to focus on end-user need gaps - even looking beyond your product category. It's about what's going in consumer's mind, that's the key. However, businesses shall understand the limitations of customer’s ability to envision the future, but also understands current perceptions, needs, and behaviors and shapes that innovation in a way that consumers will adopt it into their lives.

Ask new questions: As the old questions may be preventing you from seeing new opportunities. Consider new market/business models: many disruptive opportunities are brought to life with new thinking on how to monetize them. A disruptive product or innovations is a breakthrough in the existing solutions, something that has a potential to disruptively challenge all existing solution. Use an ideation/brainstorming process with a cross-functional team to explore alternative solutions to the problem--that is, envision new ways your users could do the work or optimize customer life experience.

Don't just look for data: seek insights: Build a forward-leaning case for action. Use the data you get this way to understand the motivations, intents, and work strategies of your users and their organizations. If you look at the history of market disruptions, they almost always deliver some combination of the benefits of affordability, convenience, and ease-of-use compared to higher-performance existing solutions. There are no rules for how you deliver those benefits, but to begin the disruption, history would suggest that they must be offered, and therefore a good rule is to ensure that innovation efforts are focused in that direction.

Pace and timing are absolutely critical: Too slow or too fast is as much a problem as backing the wrong disruptive technology. Many organizations get the timing wrong are surprised when many years later another company gets the timing right for the same disruption the original company underachieved. A disruptive product over time weakens and becomes either an extensional or incremental innovation as it moves towards the eventual commodity status

Value innovation: Disruptive innovation is not created with technology. It's created with the value that is sometimes called value innovation. You can create a roadmap for disruptive innovation because they are macro trends and patterns that give clues and there are unmet needs. These innovations can be defined as offering an initially lower performance while at the same time bringing some new attributes to the market. 

The core rule at altitude is that you have to create a new dominant design (DD): It will be eventually accepted by the market or industry. A dominant design has three things expressed with an architecture or structure - new capability, new business model and new industry structure. The new DD delivers a new value proposition that has a lower cost to achieve higher performance. The new DD creates new categories of products or services but transforms existing markets and industries. So, the question is - what is the new DD for business and industry? What is the new economic and business model?

Strike the right balance between flexibility and governance: There needs to be some balance between senior management governance in a big corporation and the craziness of a new venture. It is a much smaller group of senior executives sitting on a venture board with milestone-based funding for the prototype, test market, and scale rather than the heavy procedural stuff of conventional stages. Fail fast -Get early ideas out there for testing, iterate, and repeat. Innovation can grow out of product evolution and the faster you can learn from missteps; the faster can uncover the true genius.

Foster across disciplined culture: How to stimulate more innovation of the disruptive type- "Stimulation" makes more sense, taken into consideration that we all seem unhappy that not enough innovation happens nowadays! It's a matter of co-creating with people outside your current customers, and design community. Interact with people from another industry, the individuals that shift gears in their day to day work can often produce more, probably there’s something to do with their ability to think more holistically when it comes to new products or designs, and more often during the early stages of ideation around disruptive innovation.Just get a different perspective. That's where the surprises will come from. Keep the doors open - innovation can often be led by an outsider's perspective on things. Be inclusive in your brainstorming.

The ‘rules’ listed above is not for limiting your imagination, but for framing the system to identify opportunities and mitigate risks. Since disruptive products and innovations are often outside of a current vision or paradigm, one rule is breaking the rules that bind you. Don't lose sight of your goals. Go nuts in your ideation process, but stay grounded by including reality checks in the broader process. 


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