Is Disruptive Innovation becoming a four letter word?

A lot of buzz in the market place these days about disruptive innovation, innovation, creative solutions, etc. - choose your own term.  The definitions run from the concept as originally written about by Clayton Christensen in Innovators Dilemma to identifying people who have created disruptive innovations (Apple's Steve Jobs, Amazon's Jeff Bezos, Ebay's Pierre Omidyar and Meg Whitman. Then there's Facebook's Mark Zuckerman, Skype's Nikklas Zenstrom and Paypal's Peter Thiel) to anything that is new and hasn't been done before.

One area that is currently generating a lot of buzz is disruptive innovation for or in Education.  Ideas such as free university level courses available on the Internet are being talked about as disruptive, but it remains to be seen as no one can earn a degree, yet, from such courses.  Or is even the concept of a degree disappearing?  Many of our founding fathers had no degrees, they were home schooled and self educated.  Public schools initially were limited in what they taught.  Universities were founded to train clergy and pastors.

Today universities are steeped in tradition and limited to new ways of doing things. A recent blog by Dr. James Michael Nolan  suggests that universities maintain the status quo and are not open to new ideas.  He talks about how the "for profit" schools, like Phoenix, Kaplan, Capella, and others reached out to the leftovers that the universities did not want - and make money in the process.  While the universities continue to up the price of education, other alternatives are becoming viable through lower costs and better access to the dynamic world we live in.  Who has the time to sit in a classroom at a university that is located 2 hours away from where you live?

Although these may not be truly classed as disruptive at this time, they are changing the world of education and the academic universities may be left holding the proverbial empty bag.

What do you think?  Is disruption coming to the world of education?

Is there a time not to innovate?

Companies seem to be bipolar when it comes to innovation, either the company claims it is innovative or the culture does not support innovation and the company puts no emphasis on it - one extreme or the other.

But, is there a time when an innovative company may say now is not the time to innovate?  A recent post by Simon Hill suggests that there ARE five times when a company may decide now is not the time to innovate.

1. When an old product is still providing good results, brand awareness, and seems likely to be successful in the current market for some time.  Although a company may think this is not the time to innovate, I would suggest that this is in fact, the time to innovate.  It is from this position that companies are often surprised by disruptive innovations below the horizon.

2. When your market is resistance to change is suggested as time not to innovate.  Innovation may cause your market to move to some other brand because of the changes you made. But, eventually all customers will move to a brand and product that meets their needs and is cheaper or because their needs have expanded.

3. When a company is not doing well in the market and financial stability is required may be a time not to innovate.  But, even here the company should innovate to meet market demands.  These innovations may be incremental and not disruptive, but turbulence in the market is often caused by competing brands with similar characteristics with not real leader.

4. If a company has no ideas may be a good time not to spend the effort to innovate.  While this may be true in the short term to conserve resources it is not true for the longer term.  If you have no new ideas it will be difficult to survive.

5. It may not be a time to innovate when you start copying other's ideas.  This premise comes from the previous one.  If you have no ideas, and the market is moving forward, you have to come up with ideas from somewhere, so why not copy what the leaders are doing?  This ideas does not usually work well unless you can do it significantly cheaper with the same quality.  Better to examine what you need to do in your company to bring in the resources you need to be truly innovative.

My conclusion is that there are NO times when you don't want to be innovative,  But you do need to focus your innovation.

Role of risk in disruptive innovation

So, you have an idea that you believe will revolutionize your market, industry and perhaps, even the global cutler.  No one has even thought of such an idea before that you can find.  So you start researching the idea and find that as you learn more about how you might implement this disruptive technology that there are significant risks involved.  What do you do?  How do you resolve the risk, mitigate the risk, or even just ignore the risk?

The Boeing 787 Dreamliner recently found its competitive advantage at risk.  But is this not true of any disruptive innovation?  What the first product is like is not what the final product is like.  Is the Boeing decision a misstep, or just a risk that must be mitigated now that the risk has occurred?   In your work, do you identify risk and develop mitigation plans?  Boeing focused on fuel economy as the biggest risk to the Dreamliner and solve that problem.  Smaller risk to the disruptive Dreamliner will occur.  For example, as the article states"

Observe that the current systems and technologies in Boeing’s 737, 757, and 747 are not the same as the original technology and systems of the first of those models off the line.

Like Boeing, don't let risk disrupt your disruptive innovation.

Use of war games to sharpen innovation decisions

How do you decide to innovate, and where do you place you innovation resources?  These and many more questions that you need to think about as you strategize for innovation.  But, now do you know you have asked all the right questions?  Are there areas that bias your decision making?  A McKinsey report from December, 2012 suggests that you may be biased against certain information.

What is the major bias you might have?  The report suggests that you are biased against your competition, i.e., you don't anticipate your rivals motivations and actions.  This bias is one of dozens biases that humans have.  This bias, along with overconfidence and excessive optimism will blind you to critical information necessary to make a good strategic decision.

How can one counter these biases and oversights?  Companies that are in very competitive environments have turned to war gaming as a strategy to help them make decisions that involve potential responses from rivals.  War gaming can help one understand the potential outcome of a product change or introduction or a go-to-market decision.  It can also lead to a better understanding of potential disruptive innovation introductions into the marketplace.

What do you think?  Have you tried war gaming to help you understand you competitors actions and reactions?