Industry Insights

Making the most of disruptive innovation

Posted by John Wills on Feb 21, 2023 4:43:56 PM

Now more than ever, we live in a world of volatility, uncertainty, complexity and ambiguity (VUCA). This is completely unavoidable and is impacting our businesses, our people, and our ways of working. In the last three years, we’ve witnessed some of the most disruptive times in the modern age. But in this time, we have also witnessed huge leaps in organizational operations. Businesses are now more agile and mobile than ever before; they’ve adapted their products, services and delivery methods; and the workforce are more productive than ever. All of which is boosting efficiency, effectiveness and growth for organizations worldwide.  

This level of transformation during times of disruption is not unusual. Although disruption, by definition, is a destructive phenomenon, it is also shown to spark innovation. For that reason, many business leaders adopt disruption as a deliberate tactic for business growth, with a strategy aptly dubbed “disruptive innovation”. According to the Christensen Institute, disruptive innovation is a process “by which a product or service initially takes root in simple applications at the bottom of the market… and then relentlessly moves upmarket, eventually displacing established competitors”. Dating back to the 1990s, this is not a new strategy, instead it’s a tried and tested approach to spark innovation and growth in companies.  

The risks and rewards of disruption

Whether it’s planned or unprecedented, disruption is a double-edged sword. For every business leader with a story of success from disruption, there are others that will tell you how periods of VUCA or disruption were the demise for their business or industry. So, let’s look at the pros and cons of disruption:  

Disruption can cause a loss of business

The ultimate downside to any disruption is a loss of business, either in part or completely. Unexpected disruption, such as the Covid-19 pandemic, can have disastrous effects for businesses. For example, the UK high street lost 50 shops a day in 2022, as part of the continued fallout from the Covid-19 pandemic. These organizations may have pivoted their operations to become online only affairs, but many have lost their entire businesses.  

Planned disruption can have a similar effect. In 2008 smartphone manufacturer Blackberry launched its ‘Storm’ device. The unique selling point for this device was that the entire screen doubled as a pressable button. Innovative? Sure. Practical? Not so much. This phone – and the innovation behind it – is often seen as the starting point of the company’s demise.  

Disruption can change the competitive landscape

Disruption can also have a significant impact on the competitive landscape – and depending on the side of innovation they fall on, it can be either hugely beneficial or disastrous for a business. One example of this is the mobile phone manufacturer, Nokia. Once a market leader in their space, Nokia did not innovate quickly enough. Whilst they were enjoying the benefits of being a market leader, disruptive innovation was underway from the likes of Apple and Samsung. Nokia had to pivot and attempt to catch up with these new market leaders. And although they’re still a player in the market, they have a minimal market share, particularly in comparison to Apple and Samsung who held 23% and 19% market share respectively, in Q4 of 2022. Of course, the outcome of this disruption is a huge benefit, if you’re Apple or Samsung! 

Disruption can increase customer satisfaction

One of the most famous quotes in business comes from Ford Motors’ founder, Henry Ford. He is quoted as saying “If I asked people what they wanted, they would have said faster horses”. This teaches us a valuable lesson about innovation and customer satisfaction. Disruption allows us to innovate and create a better solution for our target audience; which isn’t necessarily the solution they’re asking for.  

Of course, this is a prime example of how planned disruption can boost customer satisfaction, and it might be hard to imagine how VUCA can do this too. However, video conferencing company Zoom is a great case study. During the early stages of the pandemic, Zoom’s usage skyrocketed. But this exposed some security issues – the organization had no choice but to modify its product to solve these challenges. They did, and they’re still a market leader today, three years on.  

Preparing for disruption in your organization

Underpinning all of these examples is one thing: leadership. Whether the outcome was positive (Apple’s disruptive innovation in the smartphone industry) or negative (Blackberry’s failed Storm device), both journeys started from one point: a leadership decision. To ensure your organization is prepared for future disruptions, you must ensure your leadership is agile and ready for change. Developing a leadership team that is agile, resilient and has a thorough enterprise mindset is critical to long-term success, especially when leading through VUCA. 

In addition to skilled leaders, there is another key aspect that unifies companies that can handle times of disruption: strategic innovation. Those organizations that benefit and deal with disruption most effectively are those that are leading the pack. For example, the UK’s high street retailers that already had an online presence, are the ones that are still going strong three years after the emergence of the Covid-19 pandemic. Yet, due to their reluctance to innovate and disrupt, Nokia is still trying to claw back market share 16 years after the launch of the first iPhone. If you want to have an organization prepared for the uncertain future we all face, it’s paramount you focus on strategic innovation within your team.  

Acquiring both leadership and innovation skills in the context of disruption is not an easy task, and is not something that can necessarily be taught in a classroom. It is often lived experiences that inform how organizations handle periods of disruption – so how can your current and future leaders know how to lead through disruption, if they haven’t experienced it before? Well, experiential learning is one answer. By allowing your people to experience disruption – and all the situations that come from it – in a safe space, you can enable them to practice and apply skills, without the fear or risk of failure.  

Get your team ready for disruptive innovation

People are the foundations of all great businesses, and if you want to be able to lead your organization through VUCA and disruptive innovation; it’s time to invest in training that will impart a new way of thinking throughout your organization. If you’re ready to give your organization the best start at leading through change; get in touch, we’d love to help you on this journey.  

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