We often see serious misunderstandings
about disruptive innovation,
which are the misunderstandings behind the failure of many big companies.A typical example of this type of misunderstanding
is that on the relationship
between disruptive innovation and technologies.
Because of these misunderstandings most Market Players develop ruinous strategies: they think of developing a new form of innovation that allows them to create attractive products for the Customers, but in reality they develop a decidedly outdated innovation.
A typical example of this type of misunderstanding is that on the relationship between disruptive innovation and technologies.
In particular, we hear a lot about “technologies as enabler” for disruptive innovation, but often it is very far from centering the issue.
This is not an academic question: it is the difference between a winning and a failed strategy.
This happens because the new culture of innovation does not yet have a solid foundation. <see In times of radical innovation there are no models >
Most people who talk about disruptive innovation have not yet fully understood what it is. Those who truly understand do not talk much about it, but open up successful Star Up.
To understand what the relationship between Technologies and disruptive innovation really is, it is first necessary to remember the meaning of Business. In other words, remember that, in essence, a product that can be sold if it is able to:
● to satisfy the real needs of people (the Customers, due to the economic crisis, today they can no longer spend on products that are actually useful for them).
● it is not the technologies that satisfy the needs of people, but the “services” that innovators create thanks to them (the appliances were the Business at the beginning of the 1900s, and not electricity).
It is therefore necessary to carefully analyze the meaning of disruptive innovation.
What IS and what IS NOT disrutpive innovation
DOES NOT focus on improving the current offer,
meaning that with it
YOU WILL NOT AIM TO IMPROVE THE PERFORMANCE OF THE PRODUCTS
(it is not a question of focusing on “technical issues”).
This is because wanting to improve performance means resorting to “hi-tech”, which is precisely – as we see below – incompatible with disruptive innovation.
The reasons why, paradoxically, Customers cannot be satisfied by better technologies than those they are already using (“Consumer-tech”) is that:
● “Hi-tech” are expensive to develop, and difficult to implement in products [Holistic Design].
And the new disruptive products are developed by small teams – StartUp or spin-offs of big companies – that operate in a “holistic” way: that is, each person needs to have a complete picture of the product (including the technological aspects) without resorting to collaborators technicians.
Normally those who have a talent for understanding – on an empathic level – of “human questions” do not spend years of his life forming as a “technician”. And therefore such a person lacks the skills of “programming” of technologies (he is not able to fully understand how them work, and therefore how them should be included in the Product).
The problem is precisely that hi-techs need sophisticated “technicians” for their implementation in products, while the “low-tech”, like Arduino or the chips inserted today in SmartPhones, are understandable in their operation even for people who do not have a “technical training”.
That is the Consumer Tech (low-tech) does not require special skills in the design phase of a solution (having to draw up the executive project, obviously, “technicians” will then be necessary, but up to that point the functional project could be developed without their constant presence).
One of the peculiar characteristics of disruptive innovation is that with it we enter a post-industrial phase, in which fundamental characteristics of the industrial phase are overcome, such as the “specialization” (ie the team of “specialists”, in which each one deals with a specific aspect of the product).
Disruptive innovation requires precisely overcoming the “specialist” dimension, since it is based on a new “holistic” dimension of the design in which everyone is able to have a general awareness of the product being developed.
● in essence, new Demand requires no better performance (“technology”) than the current ones, but useful qualities for human beings:
THAT SOLVE PROBLEMS
THAT PEOPLE MEET IN THEIR EVERYDAY LIFE.
Essentially, customers today require an improvement in their quality of life (see, for example, the “Job-to-be-done” theory by Clayton Christensen “Competing Against Luck“).
And the problems of life are “human”, not “technical”.
Christensen, in “Competing Against Luck”, illustrates how one of the best accounting software was born when Intuit understood that it should not continue to improve the functions of its product, but had to create a product – of simple use – that avoided all of the Customer the “technical” accounting steps.
Finally it is necessary to consider one of the fundamental points of the relationship between technologies and disruptive innovation:
● consumer technologies (low-tech) are now more than sufficient to develop “Job-to-be-done” for Customers (functions that are really useful for human beings).
The problem in this case is that today we continue to focus on the improvement of technologies, when, as the Intuit experience teaches, the fact is that there are no designers capable of understanding the real needs of people (“on the human level”).
What NOT to do?
Developing technologies are incompatible with disrutpive innovation
if you want to develop
an appealing innovation for the public,
IT IS THEREFORE NOT POSSIBLE
TO USE TECHNOLOGIES STILL IN THE DEVELOPMENT STAGE.
These technologies do not allow the development of disruptive innovation, due to problems, among others, of
● costs: one of the factors that makes disruptive solutions attractive is the very low price. It is therefore necessary to use technologies of a few dollars (which today are in any case able to satisfy most of the needs of the Customers). [But the low price is not a factor on which to focus attention in the design phase: see my Article Towards a new sustainability: the mistake of focusing on the low price].
● difficulty of being effectively treated by holistic fashion designers <see my Articles on Entrepreneurship> .
● timing: in the current phase of rapid evolution of the Market if one senses a need for Demand, it is necessary to act immediately by developing a solution: with the level reached today by “low-tech” it is not necessary to wait for the mature phase of developing technologies.
● impossibility of adapting to the new forms of disruptive solutions production: there will be a decentralization of the Market, with a diffused “production line” and hi-tech cannot be treated in this way <see The Production of the future is not an improvement of the current ones – Beyond the Value chain >
Hi-techs are therefore incompatible with the development of disruptive innovation.
The problem of hi-tech is twofold:
1) top-tech: the hi-tech installed today in the leading products that are used as a “sales topic” (on an emotional level) have by now over-sized performance compared to those that are the needs of the great majority of consumers. And the customers are no longer able to spend due to the high costs of these technologies (without having real benefits in return).
2) the developing technologies are instead the “promises for the future” of the big companies that help to sell current products (without these technologies!); the problem is that if we really want to develop disruptive innovation it is no longer possible to wait for the mature phase of these technologies.
These technologies were also used to obtain financing from the Public Administrations, which however today are short of money due to the economic crisis. It should be noted that political propaganda also uses these arguments, which however no longer have an impact on the public.
We talk about developing Technolgies (and the solutions that are based on them) such as Artificial Intellingence (Autonomous Vehicles and Delivering, Facial recognition, etc …); 5G ; Augmented Reality; New Electric Batteries etc …
To develop disruptive innovation it is therefore no longer possible to wait for the development of developing technologies:
the winning products today
they can be such precisely because
YOU CAN RESOLVE THE “HUMAN PROBLEMS”
WITH CONSUMER TECHNOLOGIES
For example it does not make sense to wait for new Batteries and new public charging stations, but it is necessary:
A) developing new vehicles designed to be electric (and not cars adapted to electricity); given the change in the mobility scenario (see below) these vehicles cover most of the needs of personal mobility (which are mostly urban routes).
As these vehicles are in the rental version, they can be used in mixed routes (for example, I can use them to get the train, and at the arrival station I will find the same type of vehicle that awaits me).
Keep in mind that to evaluate an innovation it is necessary to take into consideration the various innovative factors that radically (disruptively) change the scenario with respect to what it is today. In this case, for example, the possibilities of remote working and the new modes of production and widespread distribution (“Km 0”) will drastically reduce the need for travel.
b) as an alternative to the vehicles illustrated above, for specific needs (for example for weekends) new Car models (probably shared with other people) can be developed that can use hybrid engines, thus reducing the need to wait for the installation of new public charging stations.
In this scenario, also thanks to the sharing and pooling of “real cars” with other people (there will probably be more apps like BlaBla Car, even in the free version), the costs of cars and extra-urban journeys will be reduced (probably tax costs will also be reduced, which will be limited to the actual use of the vehicle).
Neither are the technologies already established but belonging to the previous Market phase, such as the “Industry” (pre-Industry 4.0 style automation) technologies compatible with the development of disrutpive Innovation. <see The need for a new generation of automation (Human Oriented Automation)>
What to do?
It is a question of starting immediately to develop solutions based on technologies already on the market (“low-tech”) – without waiting for the improvement of current technologies. The latter is the “futuristic” way of dealing with the innovation typical of current Marketing, incompatible with disrutpive innovation <see Misunderstanding: the future is not futuristic as one imagines it today >
The fact is that to develop the new form of innovation required by the new Demand, a totally new dimension of Business is needed.
This is literally impossible for the big Companies:
WHO IS THE OBJECT OF THE CHANGE
CANNOT BE THE SUBJECT OF IT.
I know it is necessary to create something new, to create a spin-off with which the Company can start from scratch with new human resources.
Ultimately, if you want to be able to develop a real disrutpive Innovation, you need to strictly follow the “operating principles” of this form of innovation <see a collection of these Rules in the Decalogue of Rulesof Disruptive innovation >
For an effective assessment of the quality of a product's innovation, the "TrendInsights's Guidelines to Disruptive Innovation" was developed, which offers:
1) an essential description of the meaning and methods of Disruptive innovation, and
2) a methodology for those who want to start a Disruptive Innovation business.
3) a Table summarizing the quality of the Disruptive Innovation for an assessment of business innovation capacity (usable both for developing a new Business and for analyzing Business already in progress).