Innovations May Never Be Disruptive

Innovations May Never Be Disruptive

Strategy Development Weekly Reflections

Often in popular media and tech blogs, we come across the phrase ‘Disruptive Innovation’ that creates a new market with their product or service and ‘disrupts’ an existing market, referring to the likes of Uber, Netflix and Airbnb. From the numerous case studies of disruptive businesses, it is evident that inventions of new technologies often lead to disruption, but innovations on already existing commoditised technologies might not do that. However, a disruptive business model might have a different story to tell.

Innovation by definition is about staying relevant, and catching up with consumer needs, thus finding solutions to solve their problems, often building ideas out of existing technologies and many times connecting technologies to solve use cases. The nature of innovations we work with today is generally evolutionary, that is continuous and dynamic and are brought about by incremental advancement in technology and processes. This evolutionary innovation is essential for any business to survive and stay ahead of their competition to serve their consumers and their evolutionary needs. And when a business successfully determines the path of the needs of its consumers leading to a future need and innovates to create a product or service that fulfils that, they are celebrated as bringing a disruption. However, these innovations don’t have the potential to enable their consumers to take a leap into the future that they couldn’t have imagined.

In 1992, when IBM had incurred the greatest loss by a company in the US of around $8.10 billion, it was getting eaten from the bottom up by small competitors that were manufacturing minicomputers which were cheaper and easier for consumers to access although weren’t as capable as mainframe computers that were the core business for IBM for years. IBM’s innovative strategy had been to develop it’s mainframe computer to be larger and stringer to fulfil the requirements of its top clients at the time. They made an apparent wise decision to not underestimate the disruption being brought about the technology that was being used in minicomputers and survived the fatal threat, unlike all its mainframe competitors that eventually had to shut shop when all the consumers shifted to the minicomputer market.

The IT industry has seen many disruptions in the recent decades owing to the fast pace of developing new technologies, also evident by the More’s Law, but some other industry such as Manufacturing has not encountered the similar pace of disruption but has hugely benefited from the advancements in Information Technology, thereby scaling up process and optimising manufacturing management revolutionising manufacturing processes such as machining, milling and even casting and moulding with Computer Aided Design and Manufacturing. However, these advancements have made way to develop new manufacturing processes such as 3D printing and Additive Manufacturing which are purely a result of the digital age and couldn’t be imagined as a process for manufacturing in a conventional way. Additive Manufacturing has also unrevealed the potential to explore new material for manufacturing unleashing properties and design that were technically impossible to achieve with the other processes. The invention of manufacturing processes saw hundreds of years of innovation, but Information Technology has truly enabled a process that is bringing about disruption in how we manufacture products, although the process is at the nascent stage where only a few advanced use cases are being realised, many companies are also accepting the potential to invade consumer market and developing business models that would define the future of consumerism.

Footnotes

1. Christensen, Clayton M. “Introduction: Why Good Companies Fail to Thrive in Fast-Moving Industries.” Harvard Business School Press.
2. Christensen, Clayton M. “Discovering New and Emerging Markets” Harvard Business School Press.
3. Denning, Steve. “Why Did IBM Survive?” Forbes, Forbes Magazine, 5 Apr. 2012, www.forbes.com/sites/stevedenning/2011/07/10/why-did-ibm-survive/#4724a9ee1cac.
4. Marchese, Kelly, et al. “3D Opportunity for Business Capabilities.” Deloitte United States, 18 Jan. 2017, www2.deloitte.com/insights/us/en/focus/3d-opportunity/additive-manufacturing-business-capabilities.html.
5. “Industrial 3D Printing - The New Era Has Begun.” EOS M 290 - Industrial 3D Printed Parts from Metal Materials, www.eos.info/nextgenam.