Disruptive innovation

5 November 2013

Sometimes a new product gives inferior performance.

Friends recently returned from a US road trip. They were struck by how difficult it was to get wi-fi access, even in luxury hotels, explains Ralph Adam.

The problem was not that wi-fi was hard to find, but, rather, how difficult the lack of it made their lives. Prior to 1999, when a branding agency came up with the name, wi-fi was known by the catchy title: IEEE 802.11b Direct Sequence! Since then demand for wi-fi has increased rapidly. But how did we cope before that? It is hard to imagine such ‘pre-historic’ times. We now also have 3 and 4G smart phones, Skype, all the social media and, of course, the Web. Not to speak of a multitude of search engines. Was there ever a time when Google did not exist? Who, for example, remembers Northern Light – the search specialists’ search engine of choice in those 1990’s pre-Google days?

We think of products or services as developing continuously with small, barely noticeable, changes. Yet, modern technology can give the impression of having appeared from nowhere, altering the way everyday tasks are carried out. In reality, it may have a long history; the Internet, for example, has its roots in the 18th century, while email and SMS go back to the early days of wireless telegraphy and telegrams.

Clayton Christensen of the Harvard Business School calls the sudden replacement of traditional approaches by new methods ‘disruptive innovation’. Sometimes the new product gives inferior performance (as with mobile phone sound quality and battery life), but users are willing to balance that against the new-found simplicity, convenience and affordability. Disruptive innovation can be risky, requiring people to employ very different approaches to product development or marketing. It may also seem out of step with the ‘normal’ or ‘accepted’ ways of doing things. However, successful disruptive innovations do create new opportunities where none existed before.

It is not unusual for large firms to dismiss the value of innovations which seem not to reinforce current goals only to look foolish as the technology matures, gains audience and market share, threatening to change radically how things are done. According to Christensen companies should judge users' needs through close observation. He quotes Xerox’s rejection of table-top copiers as one of many examples. Their big customers used high-speed copiers and wanted even faster, more ‘fully-featured' machines. However, staff thought it too much effort to go to those machines just for a few copies for a meeting. Canon's tabletop copiers, on the other hand, were slow, could not collate, enlarge or reduce, but were much simpler to use, and saved that walk. Canon gradually introduced better and faster copiers, creating an entirely new market, leaving Xerox (who had listened to customers, rather than watching their behaviour) behind.

Managers have often failed to see the purpose of new technology. An early (British) General Post Office chief engineer’s response, when asked whether he used a telephone, was: “I have one in my office, but more for show…If I want to send a message, I employ a boy to take it!”

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