DISRUPTIVE INNOVATION

What is a disruption?

A disruption is an event that interrupts the current order of things in a fundamental way, so introducing a new set of rules. This is a phenomenon observed across many fields, including science, human history, and business. See Thomas Kuhn’s The Structure of Scientific Revolution.

What is disruptive innovation?

Disruptive innovation is when all the rules of an industry change (also called the industry standard or strategic control point) in a short time so that the basis of competition between different providers shift.

What are key requirements for disruptive innovation?

Disruptive innovation occurs when an industry standard or control point changes. This can be caused by technological change, new business models, changing consumption patterns, or external events.

What is an example of disruptive innovation?

An example example of disruptive innovation is Uber within the taxi industry. The taxi industry was stable for a century after the invention of the internal combustion engine, until Uber swept aside licensed taxi operators worldwide with its ride sharing service. Within a decade, the rules for an entire industry have been turned upside down.

How does disruptive innovation emerge?

Disruptive innovation occurs after a period of variation, when different products or technologies compete to set a new industry standard, selection, during which one solution emerges, and retention, after which focus switches to optimizing the new standard, until the cycle restarts with the emergence of an innovation with the potential to set a new standard.

What is an example of the innovation cycle?

An example of the innovation cycle is the mobile telephony industry. Motorola was the leader in mobile handsets based on analog circuits until they were displaced in 1993 by Nokia’s digital devices. In the period from 2000 to 2010, many different technologies competed to set the standard for the smartphone, including Blackberry and Nokia’s own 9000 Communicator, before the Apple iPhone emerged as the standard. The iPhone continues to define the basis of competition in the industry in 2022.

Why is disruptive innovation important?

Disruptive innovation is an unstoppable force that mirrors similar cycles found in nature and any complex system. It provides a point of renewal and reinvention that allows markets to absorb new solutions. However, it is also a destructive force that causes many businesses to go bankrupt or be acquired, as other firms set a new standard for the markets in which they operate.

Who is an example of a key disruptor?

Tesla is an example of a disruptor in the automotive industry because it is the first company to manufacture and sell electric vehicles at scale. Electrically powered vehicles are a replacement to the internal combustion engine that has been the dominant industry standard for 100 years.

What are traits of a disruptor?

Disruptors frequently reinvent how everything in an industry is done, rather than simply introducing a single technological or business model change. For example, Apple not only changed the technology with the touchscreen phone, it also shifted the business model with the introduction of the app store, and it focused on the needs of the consumer, rather than the telecommunications operator, as Nokia had done in the previous generation. Disruptors are frequently associated with entrepreneur-led startups, such as Tesla, however established corporations are also successful at introducing disruptive innovation. Microsoft introduced Office 365 in the Cloud disrupting its own exchange server installed software.

Related Content:

Related Terms: