Confronting Disruptive Technologies Video

Do you remember life before smartphones, before streaming services, before the internet?

All of these innovations were once just ideas but ones that, when realized, changed the way we lived in ways we could never have imagined. They are also disruptive technologies or disruptive innovations. In other words, innovations that significantly altered the way consumers, organizations and industries operated.

And it hasn't stopped at the smartphone. Today, we are living in another age of innovation with technology like machine learning and artificial intelligence forcing us, once again, to reimagine the way we live our lives, do our jobs and run our businesses.

Harvard Professor Clayton Christensen developed his theory of disruptive innovations in 1955. According to Christensen, disruption is when a smaller entity with fewer resources successfully challenges a market leader. This is often because the big players are so focused on serving their most profitable customers that they begin to overlook certain market segments like the low end of the market, for example. This leads to some customers being underserved and gives space for new disruptors to leap in and gain a foothold.

Just think, for example, about how Netflix grew from a mail-order DVD company to the popular global streaming service it is today and what happened to its original competitor and former market leader, Blockbuster.

Christensen's theory of disruptive innovations has continued to evolve and people often now use the term to refer to any innovative entrant in an industry that successfully gains market share. So what can organizations do to protect themselves and to respond to disruptors in their markets?

First, learn all that you can about it. Knowledge is power. Look at industry reports, read news articles, consult experts, and attend conferences, exhibitions, and seminars. Also, look at what your competitors are doing and consider commissioning or undertaking your own research.

Customer research, like surveys or focus groups, can also help you to understand more about what your customers want and whether you are indeed underserving them, but it may only get you so far. Steve Jobs, for example, was adamant that customers don't always really know what they want. Other companies prefer to take a more collaborative, customer-centric approach that invites feedback from customers that they can then use to gain insight into potential gaps in the market.

Consider how the innovation could affect you. Not all businesses will be affected, particularly if they have a unique value proposition or produce a low-priced product at low cost. But if you do decide to ignore the disruption, make sure you have the resources and customer demand needed to remain profitable.

Alternatively, if you decide that - "yes, this new innovation will definitely threaten my business or my job" - you need to assess exactly how it will do so. What specifically will it threaten? For example, will it challenge your core product and to what extent? If you do nothing, will you risk losing market share? Will it impact jobs? And does this mean you need to upskill or recruit new talent to remain competitive?

Often the adoption of a new technology can be seen as a threat internally as well. So you also need to think about how to communicate your new strategy to your people. What skills and level of competence will they now need to ensure that you're future proof? How can you get them on board and demonstrate the benefits of the changes you need to make?

Finally, as the saying goes, "if you can't beat them, join them." If you come to the conclusion that the new disruptor will affect you negatively you may decide to produce a similar product yourself or, if possible, create your own disruptive innovation. This might mean creating entirely new products or replacing existing ones, but you'll need the skills and the motivation to achieve this.

Disruptive innovations tend to require new business models to succeed because they need upfront capital and to be able to experiment freely. So if you do decide to create your own new product, think about creating a specialist project team or even a startup-style spinoff that will allow you to do this without affecting your core business.

Research from McKinsey suggests that it's often the companies that make bold moves that weather disruptive storms the best. Whatever strategy you decide to take you'll need to be prepared, and this will mean that you need to have the resources behind you, as well as a robust innovation strategy in place, that ensures you continue to serve your customers appropriately and at the right price.

To recap, market disruption is nothing new, but an organization's future can depend on how well it responds to disruptive innovations.

To do this, you need to stay alert to disruption in your market, whether that be a new product or a new technology. You also need to be able to assess the impacts and threats that it could potentially cause, and use this information to develop your own innovation strategy, whether that be upskilling, recruiting new talent, or even creating your own new innovation. Whatever the case, you'll need to embrace the disruption to ensure you remain relevant, forward-thinking and future-proof.

To discover more about disruptive technology, read our article   .