Business Solutions

Ghosts of disruptive innovation

 4-MINUTE READ

Technological breakthrough is reinventing living on earth. Industrialization brought disruption to the 20th century, now it is a turn of 21st. How to move forward? How to distinguish between disruption and innovation? How to recognize and implement them in a company's strategy?

Into age
of disruption

Harvey Nash in association with KPMG recently conducted a chief information officer survey. Results show that while most chief executive and chief information officers are concerned about digital disruption, only a few of them are prepared to take actions. Half of the respondents are actively involved in the company's digital business strategy processes. 66% of CIO see digital as genuinely disruptive. They reveal that the primary challenge of the new business model implementation is the lack of vision. Isn't it time to see that digital innovation is not disruptive but a logical evolution of the business?

What if this phenomenon is nothing more serious than a cotton explosion? Similarly to the sculpture Cotton Explosion by Toten Dias, the digital disruption is a soft landing to more prosperous future. Nowadays technology is the foundation of everything, especially the playground for future development. Innovation in the company should not be a separate department. Innovation is a new mindset that everyone in the company should acquire.

Based on the research insights and experience, KPMG together with Forges has launched the Great Rewrite program. The show explains what are the new technologies which will reinvent the industry and future living. The Great Rewrite educates via examples what leaders should be prepared for and how to adjust to new ways of doing things. The program propagates integration of innovative trends, to take innovations as evolution rather than disruption. For example, 3D printing capabilities are essential for all industries whether it is a construction, healthcare or even culinary innovation. Adjustive manufacturing will be considered as a disruption only by those who fail to adapt. For others, it is an innovation and new road for business development.

Types
of novelty

So what is the difference between Innovation and disruptive innovation? To innovate is to move together with time, improving existing or creating new products at the same pace with technological progress. In other words, 21st-century innovation is the evolution process, digital transformation, of goods and services. Innovation generates value to the world, making goods better, faster, cheaper. In MIT, Massachusetts Institute of Technology, innovation is interpreted with formula:

Innovation = Invention x Commercialization

INVENTION variable of the equation is a key to understanding the difference between innovation and disruption. Innovation can vary by types like technology, process, business model, positioning innovation and others. Furthermore, MIT distinguishes disruptive innovation as one of the innovation categories.

Innovation itself is described by benefit, not the product. Disruptive innovation introduces new ways of delivering the existing goods and services. It is a transformation of "luxurious", rival, products and services into accessible for everyone. Disruptive innovation creates new markets while disrupting old ones. The number of well-known examples is overwhelming. For example, Uber did not reinvent the taxi industry. The app has disrupted an existing market in major world cities, while it can be considered as an innovation in the new and developing markets. Airbnb and Lowcost airlines make traveling more affordable while not offering new services - disruption makers. Amazon, eBay, and Alibaba were retail disruptors. However, they managed to innovate with the predictable algorithms and brought a new concept of shopping.

Digital Phoenix

The demand of the empowering consumer using new technologies in all spheres of life triggers the change. In wellness industry, customers seek for the control of their body. Therefore Addidas is offering personal digital trigger and sports wear with sensors. Clients of manufacturing want to be able to monitor the whole process hence the Internet of Things is a fast-developing solution in the sector.

Companies have an incredible opportunity to reinvent the industry. People adapt to new technologies faster than companies. Customer-driven trends do not just create niche demand but can give way to whole new markets. As Mark Zuckerberg put it: "If we don’t create the thing that kills Facebook, someone else will." In case if industry leaders fail to adopt innovations and invest in R&D, they shall wait for the new disruptive players on the market who will compete not only on the price level but as well on the delivery and accessibility.

Photograph on the main page is sculpture Cotton Explosion by Toten Dias

Insight Box

Some companies and whole industries which failed to innovate are falling behind new disruptor players. The need to innovate and keep up with the technological and digital development pace is the half of the battle. Being the one who has innovation in blood is the recipe to lead the markets. It is essential to becoming "disruptor" of the market before someone else does.

#Disruptive innovation #innovation #disruption #new markets #future trend

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