Innovation and disruption – not the same thing
Innovation’s goal is a better product at launch
If you want innovation, listen to your customer
Disruption’s goal is a better business model at launch
If you want disruption, lead your market somewhere new
- This means that if we had interviewed passengers after their Taxi rides to see how we could have improved their experience (innovation) we might have got Ubers initial friendliness (from say customer service training), the bottle of water, the clean car and perhaps even the location-based APP, but we wouldn’t have;
- started using citizens private vehicles all over the world (disruption)
- started having those citizens be the drivers via a global organisation and
- started balancing supply and demand via surge pricing.
All the while flying in the face of all Taxi regulations.
- This means that if we interviewed people after a night’s accommodation at the Hilton and asked how their experience could be improved (innovation) – we would not have got a blow up mattress (hence the Air bed and breakfast name was born – Airbnb) in a spare room of a strangers apartment or home (disruption)
- This means that if we had interviewed Blockbuster patrons to see how we could do video rentals better we might have got no late fees on the VHS tapes and home delivery by vehicle for a charge (innovation). But we wouldn’t have got a DVD in the mail via US Postal service, ordered online, have assisted choice via algorithm and we wouldn’t have got unlimited viewing for a subscription price (disruption)
Customers are not the access point for disruption. They help us paddle and get on the wave, but they don’t create the wave. We do.
Disruptive ideas are not difficult to generate with the right frameworks. Just like ideas for innovation come pretty easily from a process.
Disruption has three clearly recognisable and repeatable characteristics
- It flips prevailing norms in a market
- It increases demand for a product or service by catering to new segments of users who aren’t currently being serviced well by incumbents
- It often starts as an initial offer that is dismissed as inferior by the mainstream
And unlike innovation where divergent ideas (brainstorming and ideation) around a problem are the initial source, disruption is best catalysed from fast, finite frameworks that initially converge choice. This is like the difference between hang gliding and bungee jumping, between melting butter and slicing through it with a knife and between fire and an explosion.
Interestingly the answer to some of our troubled industries, that have relied so heavily on innovation in their history, is to disrupt and not innovate
- More fashion innovation will not hold back the disruption facing clothing retailers
- Innovation in sales and marketing won’t stop Purple Bricks and Upside coming for real estate margins
- Better programming and packages won’t reverse the disruption Foxtel is facing
- Innovation in asset intensive product industries won’t be as powerful as business model disruption (eg Hitachi – Trains as a Service – TaaS)
- In the financial field – Incumbent’s service innovation is getting a makeover, why? Because the Fintech threat is being taken seriously – but that alone won’t be enough
- Supermarkets are embracing online ordering and speed of delivery – why? because Amazon is here – this will be a battle to end all battles if Amazon wants it
- In the Healthcare space – the US has embraced Total Value Care in what could be one of the biggest business model shifts an industry has ever seen; how will that play out here?
something you should be doing,
not something that is happening to you
How have I been keepin’ off the streets this week?
Board Disruption Strategy Session
- Its always nice to work with a switched-on board willing to explore everything-tech that is coming on stream in their industry and do more than just talk about it. There is an imminent avalanche of Fintech, Insuretech, Proptech startups heading towards many company’s revenue lines…
- A fascinating day in the Yarra Valley with some great minds working on new business opportunities generated from business model innovation frameworks for a company already doing exceptionally well.
Disruptive Innovation workshop
- A business model innovation workshop with 10 different businesses in the room
- These are designed to be highly interactive so lots of the learning breakthroughs come peer to peer and the frameworks used are the catalysts for some great collaboration and inspiring insights
Keynote Presentation – Freak Wave of Disruption
- A lively room resonating with how tough it is to carve out time from the day to day to get to market leadership planning. Taking different perspectives on disruption, you can identify the difference between it and innovation and more importantly begin to generate your own from the F>A>S>T Hack methodology
Digital Utilities Conference Speaker, April 19,20 Melbourne
ANZ Mid Market Business Conference Speaker, July 23,24 Sydney
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