DISRUPTION STRATEGY

“In today’s global world, you are either being disrupted … or you are disrupting others.

Which would you rather be?”

                         Trevor Holmes

Managing Director Advivo ICP

In considering the commercialisation of an innovation that you may have, it is critical to understand what type of innovation you have. Is it a sustaining innovation? Is it a disruptive innovation? Knowing and understanding the type of innovation you have allows us to design the business strategies that give your innovation the greatest probabilities of success.

At Advivo Innovation and Commercialisation Partners, many of our own processes, data science techniques, validation methods and “go to market” strategies, are formulated on the back of the works of Dr Clayton Christensen’s Disruption Theory teachings. It is these statistically proven formula’s and frameworks that are applied to our customer’s projects and allows us to mitigate risk by knowing the path of least resistance.

Disruptive innovations are those that almost always demonstrate the following characteristics:

  • They are more affordable and accessible to consumers
  • They are not necessarily “better” performing, but offer new value propositions to customers
  • They are easy to use

To be a disruptive technology (either IT or a technological advancement in a physical product), they must:

  1. Have an enabling technology, meaning they have elements that drive radical change in the experience or capabilities of users (customers)
  2. Have an innovative business model
  3. Have a positive force in business, socially and economically

Why do more than 70-80% of innovations fail?

There are three types of innovations:

1)      Sustaining innovation – meaning it is an innovation that improves the “performance” of an existing product/technology or service e.g. the innovation of two then three then four etc. blades in razors were a sustaining innovation that improved performance of a standard razor

2)      Low-End Innovation – this is where the innovation targets those customers who are being “over serviced” for their needs, often at a higher cost than they would like. In many cases, the new innovation is “good enough” for low end users and therefore satisfies their needs at a much lower cost e.g. smartphones – when smart phones first arrived, they were a lower performing technology than PC’s and laptops, however they were “good enough” for people who wanted mobility, accessibility and simplicity of use i.e. they didn’t need all the technologies that a PC or a laptop offered (today they are gaining power and moving upstream into new markets; a discussion for another day)

3)      New Market Innovation – where the innovation creates new users who were “non-consumers” before the innovation was available e.g. Xero accounting package started off by servicing non-users of accounting packages. These were micro and small businesses who found the complexities of existing packages too difficult for their skills (i.e. they would need a bookkeeper) and therefore Xero offered them simple invoicing and basic functionalities.

 

No matter whether your innovation is sustaining or disruptive, how you take it to market can have a life and death implication on the result. As an example, we know statistically that a “better performing” product going head to head with an established incumbent (existing business), has less than a 14% chance of success. However, with the right strategies employed, success rates can increase to over 66% (Source: Growth Science).

If you would like to know more about the strategies that affect your innovation’s success, simply ask us here.

Advivo Innovation Commercialisation Partners - Disruption Strategy Table