The passing of innovation icon Clayton Christensen earlier this year has sparked a reinvigorated look at his work on the forces of market disruption. Indeed, many of the lessons learned from Christensen’s 1995 disruption theory still apply today, such as most disruptions starting out very simple, enabling innovation as a process, and applying the same set of universal questions for success. We’ve covered disruption theory and how it’s principles have stood the test of time before here on the APEX of Innovation.
Below we take another look at Christensen’s work via Harvard Business Review, which recently re-published an article from 2015 that seeks to clarify the meaning of disruptive innovation and what companies can do to achieve it. For a quick refresh the concept, check out the video below:
Disruptive Innovation Creates New Markets
With a clear understanding of how disruption theory works, executives can more effectively apply the rules of disruption theory to their business. Here’s how:
- Treat the project as a separate business unit: Innovation is often achieved by dedicated teams with no distractions. Ways for companies to do this include setting up cross-functional teams whose sole focus is market disruption or setting up centers of excellence to effectively “separate” the team from the traditional business.
- Ask what job customers need done: Since most disruptions start out simple, focusing on a specific customer problem is a good place to start. By concentrating on customers, rather than products, companies can more quickly get to the core problem they are solving—or market they are disrupting.
- Segment customers by job: Companies seeking disruptive innovation should focus on what each customer is trying to accomplish. Instead of looking at factors such as demographics and geography, companies should keep an open mind on addressable markets, based on the specific problem the product or service solves.
- Develop low-cost solutions: Not surprisingly, the key to a successful market disruption is providing a low-cost alternative. To do this it’s critical to develop products and services that are simple, affordable, and accessible. For example, YouTube started out as a simple video sharing platform for consumers, but over time video streaming over the Internet has literally transformed the entertainment industry and how people consume video content, including movies and TV shows.
If you’d like to learn more about Disruption Theory, read the complete Harvard Business Review article here.