“Disruptive Innovation” was a term first used by Harvard Business School’s Clayton Christensen nearly 25 years ago in his book, The Innovator’s Dilemma to describe the process by which established businesses are challenged by upstart products or services. Disruption has become a well-used, if not over-used, buzzword in the current economy. In interview after interview, CEO after CEO have been talking about the importance of disruption to the future of their business. The problem, though, has been exactly that. Most of what’s been occurring in regard to disruption has been talk. Unfortunately, talk rarely translates into disruptive behavior, particularly in established businesses where few people actually understand it, and which are, by their nature, culturally predisposed against it.
Disruption is innovation which dramatically changes the way all companies in an industry operate and compete. Disruption almost always starts at the low-end of a market and progressively replaces or displaces mainstream offerings. Accordingly, disruption rarely comes from established players within an industry. It doesn’t matter how many interviews CEOs give to hipster news outlets or how often they drop the word during all-associate gatherings. Changing the name of the road in front of a business won’t make any difference either. Neither will new mission statements, clever taglines or showy banners hung all around the place. People who have been ingrained for years to produce the usual, rarely do anything earthshattering. Earthshattering is a threat to norms which are sacred. It brings risk which is barely tolerated. It brings people who don’t “fit in” and who are quickly ushered right back out. As a result, earthshattering is almost never a hallmark of traditionally managed organizations where the more usual things are the better. These businesses are typified by similar people doing similar things because it’s the way they’ve always done them. It’s why they are almost never disruptive.
Doing what has always been done will never create one iota of disruptive force. Even doing more of the same or finding ways to do it better will not produce marketplace disruption. It’s not another way of saying, “what got you here, won’t get you there.” Doing what you’ve always done may well be fine, for a while. But don’t expect any amount of it or any better version of it to drive any disturbance or reordering within your industry. Serial innovation is not disruption. While it is true that all disruptors are innovators, it is not true that all innovators are disruptors. Making an existing product marginally better is not disruptive. Displacing an existing product entirely, now that is disruptive.
Consider the iPod. The iPod was not at all disruptive. People had been using electronic devices for the purpose of taking music with them for decades prior to the introduction of the iPod. The iPod simply represented the next innovation in portable music. What was disruptive was the MP3 which came from the bottom of the market to virtually obsolete CDs. At the time, MP3s, made popular early on by folks like Napster, were the stuff of a fringe of nerds, pirates and independent artists. From this unusual collection of folks came a disruption that forever changed the way we consume music. For any firm contemplating a run at disruption, the moral of the story is this: at the root of disruption is the unusual. It requires unusual people doing unusual things.
For leaders who understand this, disruption becomes not only possible, but likely. Firms that successfully create disruption do a handful of things better than those who never achieve the advantage that can be derived from it. First and foremost, they describe for others what disruption looks like. Simply telling people to go be disruptive falls far short of good enough; if you want them to create disruption, tell them exactly what that means by describing precisely the outcome you expect. Second, they welcome failures suffered in the pursuit of disruptive advantage. They know that the quickest way to stifle innovation is to punish mistakes. Third, they encourage disruptive behavior generally; they understand that rigid office rules and traditional organizational mores don’t work for disruptive souls. Fourth, they do not protect the status quo and likewise offer swift rebuke to efforts on the part of the establishment to organ reject new initiatives. Lastly, they celebrate even small steps achieved along a path to a more disruptive enterprise. Without these foundational efforts, necessary to create a culture capable of supporting disruptive activity, there’s little hope for doing so. The good news, however, is that smaller businesses are perfectly suited to make the transition.
Small and medium sized enterprises are ideal incubators for disruption for a number of reasons. To begin with, their size lends them to a certain nimbleness required of organizations undertaking disruptive behavior. They can more easily change direction, move through the ups and downs of trial and error that go with the territory of disruptive launches, and can abide the flexibility demanded of a more free-spirited work force. Too, they tend to be far less political than their large, public counterparts. Accordingly, they are more accepting of new people, new ideas and new ways of doing things and they are characterized by significantly higher degrees of teamwork and collaboration. Finally, small businesses have greater built-in credibility as disruptors with consumers who tend to view large companies as stodgy, old-school and slow. But it all starts with creating a culture where disruption can spring forth – by inviting and encouraging the unusual.
Leaders who create such environments, where disruption can flourish, create organizations that flourish. This occurs as much because of the culture they create as any product they give rise to. These are cultures which are marked by engagement, enthusiasm, trust, and commitment. These are places people want to work at and stay with – because they are places that nurture creativity, imagination and the power of the human spirit. They are places full of people who delight in turning the world on its head, and old styles of management along with it. They are rare. They are unusual. And they never tire of winning.