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Is it my imagination, or has this particularly nasty year of economic challenges ignited more conversations than ever about "disruptive innovation?"
Maybe it's just me getting older and more impatient. But when people constantly beat the drum for disruptive innovation and think everyone should be doing it - or can do it equally well - I get really annoyed.
That's because disruptive innovation is the toughest innovation path you can pursue. It can also be the most rewarding. But just as not everyone is cut out to be a Marine, not everyone is cut out for championing disruptive innovation in their organization.
The pursuit of disruptive innovation reminds me of the proverbial instructions on most boxes at Home Depot: there's "some assembly required." You have to pay extra attention, you've got to have the right tools, and be conscious of what you're undertaking right from the start. Otherwise that lawn sprinkler will morph into Godzilla.
Regardless of how you view the subject, disruptive innovations are a valuable course of study FOR EVERY INNOVATOR AT ANY TIME. Why? Because driving disruption means you have to be at the top of your game, then stay there. Thus, studying how Edison - and other successful innovators today - effectively guide disruptive innovation helps us all improve no matter where we might fall on the innovation sophistication spectrum.
So if you have aspirations to disrupt your market, your technology platform, or the culture in your organization, this article is for you...even if you may not yet have a lot of other co-conspirators on board.
I recently spoke with two disruptive innovation pros - Jim Gagnard, CEO of SmartSignal and Bill Moffitt, CEO of Nanosphere, Inc. - to glean their thoughts on this fascinating yet vast subject. Today I'll focus my comments on how their views of an innovation mindset, strategy, and culture aligned with Edison's own, and how you can begin to adopt some of Jim and Bill's action steps, starting now.
Drive Disruptive Innovation Through Platform and User Group Shifts
If we think about a simple definition for disruptive technologies or a disruptive product or service platform, we can view it as a shift in how something fulfills a job that a particular user group desires to have fulfilled. It sometimes also shifts the group who uses the disruptive technology or product/service platform. (Please see chart below for more detail.)
Thomas Edison was a master at generating disruptive innovations. He consistently leveraged technology platforms to drive shifts in user behavior, creating multiple products and price points which allowed him to deliver ongoing value. The movies, for example, disrupted the entertainment industry. The Nickelodeon enabled people of any economic stature to spend 5 cents and take 90 seconds to watch three movies. Over time, Edison developed more sophisticated projection systems and story lines, leading to long-play movies that lasted 12 minutes or more - and cost more to watch as well.
When the telephone arrived, it began to displace the telegraph. Although people still wanted to communicate with folks who lived far away, telephones became easier and faster to use (especially with Edison's transmitter) not only because phones could be placed in the home, but alsobecause people could do the communicating themselves withoutworrying about going to the telegraph office at the center of town. So the technology platform shifted AND the group of people who could use the platform also shifted.
We can look at electric lighting, the storage battery, and the phonograph as other disruptive technologies Edison pioneered - all of which had major market impact.
Below is a chart developed by Strategyn, an innovation consultancy, which maps out several ways to view marketplace disruption. As the chart progresses from left to right, the value propositions become increasingly disruptive. Note how the chart includes functional shifts in the platform itself as well as the person who uses the platform (called "the job executor"). Understanding these shifts is key to an effective understanding of what disruption means!
Begin with a Strategy That Helps You Decide What to Disrupt
One of the most common misconceptions about disruptive innovation involves the notion that companies which pursue disruptive innovation must disrupt everything...every internal business process, or every facet of their enterprise. Not so. What they do need to do, once a pathway for the disruption has been identified, is align along that pathway and ensure everything they do procedurally - and culturally - supports it.
Smart Signal is a Chicago-based provider of equipment that predicts equipment failure BEFORE any failure actually occurs. Part of the company's success has come through recognizing the patterns in data that indicate a failure is about to take place. Jim Gagnard - CEO of Smart Signal - indicates that to maintain market leadership, his organization typically focuses on just two to three kinds of disruptions:
- Technology platforms
- Novel product/service development processes
- Rapid "speed to value" for customers (features, installation, servicing, etc.)
By keying on ways to create disruption in these specific areas, Smart Signal has been able to identify new markets faster, design new products faster, and drive more deeply into customer needs. Gagnard elaborates: "We don't say, 'Innovation is our ultimate goal.' We foster a culture of innovation. And then we encourage different ways of fulfilling those objectives and strategies, saying 'Of all the different ways that we could get there, which are highly innovative?' And some can survive, and some can't."
Bill Moffitt, CEO of Chicago-based Nanosphere, Inc. is another champion of disruptive innovation. His company holds diagnostic patents on methods for delivering nano-sized particles into the body to detect disease states. Nano-particles can also be used to 'diagnose' what's going on in contaminated bodies of water, active bio-warfare agents, etc. These particles can be coated with a variety of substances - including short-strand DNA - which make them "smart," thereby enabling them to yield information in real-time that otherwise would be unavailable using larger particles.
The resulting data can be life-saving. Thus for Nanosphere, part of its disruptive innovation lies in the value proposition itself: the fact that its technology can deliver results in real-time versus hours or days after implementation. Bill states, "I think of a platform as a fundamentally enabling science or technology breakthrough that has implications across a fairly broad spectrum of market segments, or different applications in different markets. So as opposed to being a single-product breakthrough for a single application, there's very broad applicability....So part of our charge is to articulate the disruptive nature of our value proposition, then build it out and have it be recognized."
So, if you are starting down the path of disruptive innovation, choose two or three areas where you desire to drive disruption on the strategy side, perhaps focusing at the level of a technology platform, product development process, or unique implementation approach with customers or investors.
Disruptive Innovation Requires Management to Hold a Uniquely Open Mindset
No company can even make it through these prior steps, however, without first having a strong innovation mindset - a mindset that builds upon flexibility of thought style and which embraces the ability to deal with unknowns. In fact it is often management's ability to deal with these unknowns that causes disruptive innovation to die early on the vine.
For example: Successful drivers of disruptive innovation know that experimentation will be crucial and absolutely necessary to success. As Edison said, "You must experiment all the time; if you don't, the other fellow will and then he will get ahead of you." And with experimentation comes failure, and the looming void of the unknown.
Yet, the true driver of disruptive innovation is looking for failure; watching for it, and is poised to learn from it. Jim Gagnard states, "I have never called anybody out for a project failing. If we do the same things wrong several times in a row, then we're going to talk about it....But I'm more interested in figuring out that something's not going to work sooner and doing something else than the fact that it didn't work...Sometimes getting to failure is just as good as getting to success. You're eliminating a particular task so you can go another way."
Bill Moffitt's innovation mindset focus is slightly different. Although tolerant of failures, Moffitt also keys on the need for "continuous learning" and for management to openly state "that they don't know all the answers, or believe that they don't understand the entire power of the platform." This acknowledgement of un-knowingness enables senior management to work intensively with individuals in all levels of the organization in driving new knowledge and expertise.
A Disruptive Innovation Culture Has Fewer Boundaries, Flatter Teams
In addition to the challenges of selecting the focus for your disruptions and then having the perseverance to pursue them - mentally as well as with focused actions - the culture of the organization must be set up to support each disruptive effort. For disruptive innovation to work, there are no half-measures.
Edison realized this, and worked diligently to cross-train his employees so they learned not only how to experiment but how to discern the market potential of an idea. Team leaders on one initiative were in supporting roles on another, creating a sense of "flatness" or equality within the employee base. Continuous learning and cross-training were key to Edison's ability to drive employee engagement when times were tough, and when hours got long.
To support its disruptive innovation initiatives, SmartSignal has also had success with cross-training several of its 100 employees. Jim Gagnard states that rather than seeking "innovation managers," he sorts through his organization to find employees with the right attitude.
"As a small company, when you take someone in the organization who's pretty good at 'x' and give them a horizontal promotion into another area of the company to take advantage of their creativity and so on, you take a risk. You sometimes have to take people out of their comfort zone...When you hit the bumps in the road, you hope they will have the right mental view of things...For a company our size we don't encourage functional overlays for people (such as creating special management capabilities). Everybody here has a line job. For now, we have operating people who are functioning in an environment that encourages innovation."
At Nanosphere, the culture focuses heavily on communication with all corners of the company as well as on the development of "flat" teams. Moffitt states, "People love to work in an environment where there's an openness and an honesty, where there's a trust that builds - as opposed to an oppression from the top that says, 'We have all the answers.' The message from our director levels is that 'We don't have all the answers.' And they charge the organization broadly with that responsibility. This sends a signal to employees that their opinions are valued, that their contributions are valued, that they do not need to feel that they have boundaries drawn around their behavior patterns."
At Nanosphere, this flat, boundary-less approach directly impacts how teams operate. "We have multi-disciplinary teams, and any given team member may have a lead responsibility on one team but may be in a different role on a different team. We hire for specific functionality attributes then organize the best folks we have around specific projects. So, there's probably not a person in the whole company who's on just one team."
What You Can Do Starting Now
- Examine your strategy: where is there room for disruption? Go back to the Strategyn map shown earlier in this article. Consider what your current platform is, and who your "job executors" are. How could you disrupt these?
- Examine how communication flows in your organization: If your current communication patterns are vertical (primarily top to bottom) focus actively on how you can connect senior management to all levels of the organization. Start perhaps with a rewards or recognition initiative, then build to bigger stuff.
- Examine your mindset: Is there room for failure or un-knowingness? How does your organization view continuous learning? Where is experimentation encouraged? If you cannot find these qualities in your organization, seek to build these qualities first before you engage in disruption.
For further reading on disruptive innovation, consider chapters 4 and 7 of Innovate Like Edison, Competing for the Future by Gary Hamel, The Innovator's Dilemma by Clayton Christensen, and What Customers Want by Anthony W. Ulwick.
In the next issue: How to hire innovation-minded employees
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segments which caught my eye.
