Making disruptive innovation work for you

The big challenge in “The Innovator’s Dillema” and the body of research called “Disruptive innovation” is: Can Large, Established Companies truly innovate?

Innovation researcher Bettina von Stammn asks in her book “Is disruptive innovation within a large company possible?” (von Stamm, 2008). And the reality for a lot of firms has been no, we have not been able to reinvent ourselves. We have been getting disrupted and pushed to the sides. Do you remember Myspace, Compaq, Kodak, Borders Bookstores, video rentals, encyclopedias and laptops…… These are all examples of companies or product lines getting highly disrupted.

The classic literature concludes that disruptive innovation in established firms is extremely difficult. But a new body of research is emerging. This one is different. This one shows how large firms are learning to deal with and use the innovator’s dillemma to their own advantage. One such article is
The Empire Strikes Back: How Xerox and other big corporations are harnessing the force of disruptive innovation”. Clayton M. Christensen and Scott D. Anthony, both of Innosight, has written an excellent article on how to master radical innovation in established companies.

Using the case of Xerox (remember, Xerox, with the copiers?), the authors state “ It is a classic story of the “innovator’s dilemma.” Xerox struggled to defend against threats at the low end of its business, failed to create growth in new markets, and found itself on the brink of irrelevance, if not extinction”.

But today, the company is reinveting itself. Moving it’s focus from being “a printer company” to “helping clients simplify business processes” has allowed Xerox to find new avenues for growth. One such avenue is document management services, including buying 74.000 new employees and pusing R&D into not new copiers, but into services.

The authors line up three suggestions for companies seeking more disruptive innovation.

1. Pushing beyond Core Competencies
2. Embracing business-model innovation
3. Managing the old and the new differently

Now, interestingly, most material taught in business schools is “stay with your core competencies”, not push beyond it. Equally, few business schools have traditionally been training managers in radical business model innovation.

Thankfully, work from Innosight and the Business Model Generation team, lead by Alexander Osterwalder is developing the tools and making business model innovation become a reality for companies worldwide. Emerging research on firms like Apple is showing how innovation can become a core competency in itself. Now we just have to step up the number of strategic innovation programs in business schools worldwide. That’s easy.

Update:
Since first writing this post, I’ve been teaching strategic innovation both at our Business School and a number of executive consulting programs. I am greatly pleased to see how quickly people ‘get’ strategic innovation, once they have a framework to explain it.
Moving from ‘understanding’ to ‘doing’ is harder, but with training and coaching, every single employee can become a true innovator.
Because, we firmly belive; “Innovation should be everyone’s job”.

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