Fostering Disruptive Innovation

According to our textbook (Technology Ventures: From Ideas to Enterprise), disruptive innovation, also known as radical innovation, “uses new modules and new architecture to create new products” (p. 119). Examples of disruptive innovation include the automobile (sorry carriage makers), the telephone (no more telegraphs), the computer (no one really liked un-jamming typewriters anyway), the internet (no more hitting the stacks at the library), and the cell phone (actually, it is really an electronic leash). The list could go on, but each of these innovations has changed the way we operate as a society. Each has, in theory, made life better for the users.

So, how does a company best foster disruptive innovation considering that many times it means current product offerings will head quickly into the declining phase of the product life cycle curve (and we all know what that does to profits on those products)? Here are a few thoughts: 

• First, since disruptive innovation is inevitable, resisting such innovation will untimely lead to a company’s downfall. Consider Motorola…they used to be a leader in cell phones; however, the shift to smart phones (a disruptive technology) has all but eliminated Motorola form the mobile phone business.
• Second, both large and small companies should look for avenues to pursue disruptive innovation in a controlled environment. Such avenues include universities, laboratories, R&D groups, etc. By constantly looking for the next new product, a firm stands a better chance of staying completive in today’s consentaneity changing world. According to our textbook, universities can be an especially good source of innovation. Companies can access this innovation by funding university research studies and by hiring graduates in the science and technology fields to work in their R&D departments.
• Third, companies should carefully listen to the voice of their customers. Doing so will allow them to identify potential new applications for their current products as well as identify potential new products that consumers want, but that are not currently available in the marketplace. However, customers do not always know what they want and are somewhat adverse to change, so companies need to balance listening to the customer and ultimately showing the customer what they really want, as Apple did with the iPod.
• Fourth, companies need to be aware that disruptive technology has a high degree of “radicalness” associated with it. As such, the new product “introduce[es] a set of attributes to a marketplace different from the ones that mainstream customers historically have valued…as a result, mainstream customers are unwilling or unable to use disruptive products in applications they know and understand” (textbook p. 125-126). As a result, companies need to realize that initially the disruptive technology needs to address a niche market and will only be used by technophiles and early adopters; however, with patience the new technology could have astronomic possibilities.
• Fifth, to the extent possible, companies need to foster disruptive technology in such a way that it does not completely cannibalize its current products offerings. However, keeping point one in mind, holding back too much will ultimately leave the door open for competitors to take over the new technology.
• Finally, for large firms, it would be best to set up a largely autonomous and self standing R&D department to focus solely on disruptive innovations. Doing so will eliminate some of the bureaucracy of the corporation and reduce existing product owners from nay-saying the new innovations.

These points summarize some of the basic steps a company should take to help foster disruptive innovation. At the end of the day, change is one of the only constants in life, so a company that embraces the change is best positioned to be a market leader in the future decades.