Disruptive innovation in practice [1]: what are the criteria for evaluating Disruptive Innovation?

The redefinition of the term Disruptive by its “inventor”

the essence of Disruptive Innovation
it’s not disruption (disorder, destruction)
But it is
THE “USEFUL VALUE” THAT THE PRODUCT
DEVELOPES FOR THE CUSTOMER

To understand what are the criteria of Disruptive Innovation it is first of all necessary to know that the “inventor” of the term, Clayton Christensen, regretted having used the term Disrutpive (since according to this definition today we focus on the negative meaning of the term, and the qualities that underlie this form of innovation are lost sight of).

C. Christensen: «In retrospect, I made a poor choice when I used” disruption (…) my friend Andy Grove said, “If you call it disruption, you will mislead the world.” Unfortunately, The Innovator’s Dilemma was already being printed ». [“ a Decade o disruption “, Forbes Oct 26, 2007] [zotpressInText items=”{6267568:NPHJADR5}”  style=”modern-language-association” format=”|%num%|” ]

<see The basic misunderstanding on Real (Disruptive) Innovation >

In fact, the essence of Disruptive Innovation is not the disruption that is determined in the market with an innovation (this is the negative meaning).

But (as Christensen later corrected)

the decisive quality of the Disruptivve Innobation is
THE “USEFUL VALUE” THAT THE PRODUCT
DEVELOPES FOR THE CUSTOMER

This is the positive meaning of the term, (re) defined by Christenzen as “Job to be done” developed by the Product for the Customer).  [zotpressInText items=”{6267568:CDK4RAN7}” style=”modern-language-association” format=”|%num%|”]

<see Guidelines [2]: WHAT IS and WHAT IS NOT Disruptive innovation >

The two opposite meanings of the term Disruptive

Today the term disruptive indicates negative effects of disorder, destruction.
But Disruptive Innovation is a great benefit
for Business and Customers

The problem is therefore that today the term disruptive mostly indicates the effects that the new wave of innovation creates on the market (that is, the effect on the Business that has consolidated   in recent decades). Hence highly negative effects such as disturbance, disorder, destruction.

But

Disruption is not a problem for everyone.
Rather
DISRUPTION IS A GREAT OPPORTUNITY
FOR THE MAJORITY OF PEOPLE.

That is, the Disruption is a problem (often fatal) for established Companies that are unable to adapt to the change taking place (unfortunately these Companies, for problems intrinsic to their establishment, are not able to change within them)

<see The great Firms are not able to develop disruptive innovation within them >

But

the current Disruption is a huge opportunity for everyone else.

That is, it is a great opportunity

► for Business: for those who want to enter the market with little money; is

► for Customers who can enjoy new product qualities.

The contribution of Disruptive Innovation is, more generally, a great advantage for the Society since it brings the Business (Goods and Services) back to a level of effective quality that has been lost in recent decades (leads to a general improvement in the quality of the life).

We must take into account that we are only at a preliminary stage in the development of the new generation of product: as in all the major market revolutions, due precisely to misunderstandings and resistance, changes are slowly developing.

Wikipedia has taken many years to become the global “Encyclopedia”; and Airbnb has failed to succeed for many years.

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So, although the disruption in progress is considered by the mainstream culture as a problem (and therefore often opposed) <see The new Value proposition: the problem of ethical (ideological) values > it has, for most people, basically a positive sense [see next chapter]

The causes of the current disruption

The paradox of Disruption is that
it is the Incumbents who created it
depriving the market
of the qualities needed to satisfy the Demand

To understand the real meaning of Disruptive Innovation we must consider what is the reason for the Disruption underway in the Market (the negative aspect).

That is, it is necessary to understand that

the useful Value required today by the new Demand
it is precisely what has been lost in recent decades

ever since the Marketers have succeeded in “inventing” purchase reasons for almost zero utility products. [zotpressInText items=”{6267568:U9ADZQN5}” style=”modern-language-association” format=”|%num%|”]

The fact is that the business was originally based on the fact that  satisfying an interest (need) of the Customer it was simultaneously satisfying its own interest (profit) – in “scientific” terms it is the Law that is at the basis of the Market: that of the Supply and Demand; which, in fact, has been ignored by the current Incumbents.

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That is, the Disruption was created by the Incumbents themselves (the established Companies), who stopped producing really useful products (being able to leverage emotional qualities). And today, paradoxically, the Incumbents are not able to recognize the essence of the problem that afflicts them.

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More specifically, the problem of market disruption arises from the fact that

the Customer
are just not able anymore
to buy products of the current generation.

This is due to the fact that

● Customers are struggling with important problems (Needs) whose satisfaction can no longer be ignored. And the Incumbents are unable to understand such Needs.

Problems like getting around the cities; costs of utility services and the need for alternatives to public services, now in chaos (Mobility, Health, Safety, etc …).

● with the economic crisis, Customers are no longer able to purchase products of the current generation, which have too high prices compared to the truly useful qualities offered.

The need to develop new Business Rules

In order to develop an innovation capable
to satisfy the new Demand
it is necessary to understand
what are the qualities required for this Demand

The fact is that if today we do not understand why the negative aspects of the Disruption taking place on the Market, even less we understand what are the positive qualities of the Disruptive Innovation required today by the new Demand.

TrendInsights develops a debate aimed at clarifying the qualities needed to develop Disruptive innovation strategies.

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That is, in order to develop successful strategies, it is necessary to clarify both

● what are the qualities required by the new Demand (without which the products are no longer salable in the current phase of economic crisis); be

● what are the qualities that today lead Businesses to bankruptcy (many Businesses today fail to succeed because they use rules incompatible with the new phase of the Market).

See in particular the incompatibility between many of the Rules of the Sustaining Innovation business and the Disruptive Innovation strategies that creates an internal conflict in the strategy that leads the latter to failure.

<see The failure of Hybrid innovation (Disruptive + Sustaining Innovation) >  

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In essence, the current problem is that in the new market (with the new demand)

the winning qualities of established Business
become negative (fatal) factors.

We speak, for example of the fundamental areas such as

– Marketing: the strategies of the Maketers who are able to leverage emotional factors to sell products regardless of their real qualities.

This attitude is a serious handicap of the established Business since it does not allow Incumbents to understand the reasons for abandoning this methodology; and does not allow them to recover the ability to tune in to people’s real needs.

– Design: the “tricks” of the designers to increase profits, such as the creation of strategies such as planned obsolescence. Or replacing the design of really useful features with an attractive styling.

One of the problems that hinder change is that the current generation of designers is not even aware of having replaced the designs with the styling.

A hint to the qualities of Disruptive Innovation products (“Job to be done”)

The differences between
the qualities of the two forms of innovation
are radical:
traditional product qualities
and deeper forms of gratification
are recovered.

So, more specifically, the criteria of the new form of Innovation (Disrutpive) are radically different from those of the previous form of innovation, or Sustaining Innovation (one could say that they are “opposite”).

Among other things, an important difference is in the meta-qualities of Innovation such as:

● the focus on “technological” performance no longer arises: technologies become secondary, since today even low-level (low-cost) technologies are powerful enough to satisfy the new Needs.

● the traditional qualities of the product – lost in the last few decades – are back in vogue. Quality as product durability, or deeper gratifications than those of current gadget products.

The new generation of products solves important life problems (note that the “revolution” is such that it is no longer a question of “products”, but of a more general “offer” of which the product is part, thanks to its integrability in an ecosystem). <see The need to see the whole picture: integration of products into an ecosystem>

And the new products allow the development of new forms of gratification: ephemeral satisfactions are replaced by deeper gratifications such as compassion and collaboration.

<see ‘From frivolity to sustainability’ >

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Furthermore, as regards the more operational aspect, there are new Rules such as:

► Products must be more sustainable from both points of view not only of the Society (a factor on which the focus is placed today), but also of the Customer.

That is, the products become truly affordable: which means that quality such as robustness that brings the length of the product’s life back to the past is also recovered (thanks, for example, to modularity that allows you to modify the product to adapt it to new needs; a repairability – largely – within the reach of the same Customer; etc …)

<see Beyond the Planned obsolescence, towards a long/endless durability >

► the Products must allow the Customer to develop various forms of value:

– the Users must be able to create forms of Value not originally foreseen, thanks also to forms of collaboration between them (therefore the Products must be able to be “open”, in order to be inserted in ● an ecosystem of existing products and ● practices of non-consuming).

<see The need to see the whole picture: integration of products into an ecosystem >

– the products must be developed with an integration of the Customer in the design process (the holders of the needs to be satisfied are the best (co)designers of the solutions).

<see The problems of the current Market strategies: toward a crowd participated Marketing >

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The fundamental question is that in order to be able to develop all the qualities necessary for Disruptive Innovation some preconditions are absolutely necessary:

1) it is necessary to carry out, upstream of everything, a disruption of the Company’s mindset and structures (for this reason the D.I. is developed by Startup; while the established companies are unable to make the change necessary to develop D.I. <see  The great Firms are not able to develop disruptive innovation within them >)

2) it is necessary to create radically new business (and products), and not to evolve existing types of products (“don’t do things better, do better things” – @petetrainor on Twitter)

In particular

the determining quality of the Disruptive Innovation product
is to be a “Job to be done”.
That is, to develop a service for the Customer
which substantially improves the quality of life.

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The various positive and negative characteristics of Innovation are summarized in the GUIDELINE for an analsysis of Business innovation  documents of TrendInsights.

Synthesis of table of “Table for Assessing Disruptive Innovation”

And in particular in the “Guidelines [3]: Table for Assessing Disruptive Innovation”, summarized below [see complete table]

SUSTAINING	DISRUPTIVE
MARKET SECTOR SEARCH to enter	i CREATE A NEW SECTOR
BEAT THE COMPETITION	THERE IS NO COMPETITION
MONOPOLY (eliminate competition)	OPEN MARKET
i CRONYSM	FREE FROM TIES WITH GOVERNMENT
i IMAGINARY QUALITIES	i NEEDS OF PEOPLE already highlighted by non-consuming new Practices
DECLINATIONS OF EXISTING PRODUCTS	i QUALITIES THAT SATISFY PEOPLE’S NEEDS
“IMAGINARY” VALUES	i UTILITY-VALUE
● TOP-DOWN “INVENTED” PRODUCTS FROM MARKETERS WHO HAVE NO EMPATHIC RELATIONS WITH CUSTOMERS	i PRODUCTS ARE DESIGNED IN A STRONG COLLABORATION WITH THE USER (or the Startupper is itself a User).
IMPROVEMENT OF EXISTING PRODUCTS	i Invention of a NEW OFFER FROM SCRATCH
Design-top down, disconnected from real needs	BOTTOM-UP DESIGN
CENTRALIZED PRODUCTION – Industrial Production	DISTRIBUTED MANUFACTURING – Decentralized (Local) manufacturing, Proxymity production
VALUE CHAIN, linear development, top-down controlled	i VALUE WEBS, a Connected eco-system that integrates every possible professional operator
Centralized production involves TRANSPORT and INTERMEDIATION	i In the PROXIMITY BUSINESS – ABSENCE OF TRANSPORT and DISINTERMEDIATION