Monday, June 19, 2017

Should "disruptive innovation" always be encouraged?

This week’s readings focus on the importance of “disruptive innovations” that do not stem from market analysis, tracking sales growth, and catering to existing customers. Instead, Christensen argues that innovating follows a line of thinking that requires companies to identify and develop a product or technology before there is evidence of a need or desire for it. In essence, companies have to curate the demand for the product.
                However, similar to what Reeves, Love, and Tillmanns discuss in “Your Strategy Needs a Strategy,” it seems that it would be important to consider a company’s strategy before placing an emphasis on disruptive innovations. Does the malleability of an industry and whether it falls within the classical, adaptive, shaping, or visionary framework matter when it comes to innovating? It seems that companies that fall within the shaping and visionary fields would have a greater chance of generating success from an innovative concept, because their markets are malleable. However, companies operating under the adaptive and classical structures would be spinning their wheels because they are in fields that cannot be changed. Perhaps Christensen’s recommendation for companies to create an independent division that focuses on innovation while keeping the established products and customer base separate would be appropriate in this situation. But it still appears that suggesting that all companies should focus on innovation seems inappropriate. Just as strategies that work for the fast-paced software industry cannot be adopted by the slower-paced oil industry, not all companies should be focusing on innovation.
                As Leinwand and Mainardi argue in their comparison of Kmart to Wal-Mart and Target, a company’s success relies on its ability to identify its unique contribution to the market.[1] They even go as far as to claim that companies should “avoid markets, products or services that require new or disparate capabilities, and thus threaten the company’s focus.”[1] It seems that innovation should only be encouraged to companies that can afford the risk. Similar to investing, individuals who only have emergency money in their savings account would not be encouraged to play the stock market. When looking at today’s company’s toying with disruptive innovations, we see Google, Netflix, Amazon, and Tesla presenting concepts such as independent film-making studios, purchasing grocery chains such as Whole Foods , and focusing on space exploration independent of their primary businesses and after they have established such a presence that they have money to “play with.”
                Thus, I disagree with Christensen’s argument. I believe he is correct when it comes to the notion that companies cannot always play it safe and just track their quarterly and annual growth. Some innovation (beyond sustainable product improvements) is necessary. However, not all businesses are successful enough to experiment with “disruptive” concepts and, perhaps if they fall in the adaptive and classical industries, this should not be their concern at all.
                 



[1] Paul Leinwand and Cesare Mainardi, “Why Can’t Kmart Be Successful While Target and Walmart Thrive?,” Harvard Business Review, Dec 2010, https://hbr.org/2010/12/why-cant-kmart-be-successful-w. 

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