By- Anirban Dey, VGSoM, IIT Kharagpur
“Disruptive innovation can hurt, if you are not the one doing the disrupting.”
– Clayton M. Chistensen
Disruptive innovation is not a novel concept- from the time man invented the wheel, neoteric technologies has always led to the eruption of newer markets and eradicated market front-runners. However in current times the speed at which disruptions are occurring is increasing exponentially due to technology fuelled advancements.
As depicted by Ray Kurzweil, paradigm shifts in technology are becoming more frequent; the industrial revolution took 8,000 years to happen post agricultural revolution, while the dotcom boom took only 22 years post the moon landing. This is in tune to the Moore’s law which also observes an exponential (doubling) increase in processing power, measured by transistor count in an integrated circuit, in every 18 months. As the frequency of disruptions are increasing exponentially it is becoming vitally more important for business to manage these disruptions in order to sustain itself in the market.
Keep an eye out for disruption-
Clayton Christensen, who defined the term “disruptive innovation” in 1995, analysed disruption through the point of view of market demand in his book, “The Innovator’s Dilemma”. When a new technology catering to the demand of a niche market comes into the market, market leaders tend not to respond to this nominal demand. However with further improvements, refinements and accessibility of these technologies the demand for it breaks the boundary of the niche market and encompasses a larger market share. At such a point market leaders are not equipped to handle these disruption and lose out on its market share. Thus, it is increasingly becoming imperative for business to monitor demand of new technologies and develop competencies in these fields.
Responding to disruption-
Organizations should be ready to punctuate existing product development to analyse new market competitors and scrutinize existing processes to evaluate scope of improvement and innovation. Thus, instead of having a reactive approach to disruptions business should adopt a proactive measure, to enable faster response and adapt to the disruptive changes both in terms of organizational structure and processes.
Dealing with disruption through collaboration-
“Innovation teams” are common nowadays in all companies, however their effectiveness is reduced by their isolation from the other verticals of the company.Isolation of adaptation to disruption causes misalignment within the organization and hinders in effective redressal of the effects of disruptions. Thus, it is crucial for companies to enable interactions, on how to deal with any disruption, across the organizational hierarchy and encompass all the departments.
Managing disruptions effectively-
With increase in the frequency of disruptions in the market, businesses are continually facing the dilemma of whether to maintain status quo or to start adapting to a disruption. Stagnancy can cause redundancy while frequent changes can cause uncertainty. Businesses need to carefully analyse and select if they are to: a) beat the disruption, b) join the disruption or c) wait-out the disruption.
The strategy that the firm selects with respect to the disruption has an immense impact on the future of the firm. So, it is critical to manage the disruptions effectively in order for the business to secure its future.
Managing disruptions is a continuous process and can be broadly segregated into six major function.
1.Research and predict changing market demands and trends: Prediction market services specializing in market forecasting e.g. Prediki.com
2.Impact analysis of disruption on existing market.
3. Proactive response to disruption: Using disruptive technology response matrix.
4. Collaborative inputs in adaptation and evaluation of changes: Enable collaboration software like Bitrix24 allowing cross platform sync including CRM, Mail server, Social Networks and Open channels
5.Alignment of organizational competencies with disrupted market demand: Effective technology and business alignment to access the potential of disruptive technology
6. Getting ready for next disruption.
Conclusion-
Fighting against disruption is as futile as fighting against the laws of gravity, organizations need to adapt to disruptions in order to exist. Effectively managing disruptions are vital for the long term growth and existence of firms, and the key component in doing so is the collaborative effort that the firm portrays in the face of a disruption. Predicting and adapting holistically to changes is the only way by which organizations can successfully ride the waves of disruption.
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