Ways to Incorporate Disruptive Innovation as Part of the Management Agenda

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Disruptive Innovation > Best Practices > Ways to Incorporate Disruptive Innovation as Part of the Management Agenda

Ways to Incorporate Disruptive Innovation as Part of the Management Agenda
Rick Mueller, Professor, United States, SIG Leader
A few days ago I was in a conversation with Adam Hartung, who observed brand managers are constrained, as a matter of practicality, to focusing exclusively on sustaining innovation. They normally donít focus on entirely new, disruptive innovation.

The thought I explored with him was making brand managers responsible for making some portion of each yearís sales come from markets which are entirely new to that industry. And whether (or not) this would be a good way to incorporate innovation initiatives which would necessarily have disruptive potential.

Iíd be curious to know whether you believe this might be an effective way to incorporate disruptive innovation into the development mainstream of large, multi-brand corporations. Or do you see other, better ways to incorporate disruptive innovation as part of the management agenda?


Getting Management Attention for Disruptive Innovation
Charles Alter, Consultant, United States, Member
The dilemma is that the skills that brand managers need for their jobs may not be the skills needed to probe for disruption, whether in current or new markets or products. A better approach in my view would be to team brand managers with marketing, engineering or product development staff for a portion of their time to study and explore opportunities to change the game. McKinsey's Three Horizons of Growth might be a good guide in this effort.

To what Degree Might Productive Efforts (and Initiatives) Be Diluted Through Political Posturing and Infighting?
Rick Mueller, Professor, United States, SIG Leader
Hi Charles and thanks so much for leading off this discussion. Let me pose the concern of vested interests playing a destructive rather than constructive role in any attempt to develop Disruptive Innovation as different individuals, perhaps even from entirely different departments, lead initiatives (all consuming from the same pool of finite resources) which could be seen as having differing (if not diametrically opposed) objectives?

In cases such as these, how would one prevent the redirection of efforts which should be directed at developing authentic and sustained Disruptive Innovation from instead becoming directed at efforts towards political self-defense?

Problem with Precise Definition of Disruptive Innovations
jaymie , Manager, United States, Member
In any organization, large and small, without a clear definition of the differences between disruptive and sustaining, you run the risk of debates over definitions and lose momentum. Putting quotas on disruptive innovation without proper explanations of what you are looking for too often leads to continuing the same process/project, but relabeling the output.

Defining Disruptive Innovation
Rick Mueller, Professor, United States, SIG Leader
Hi Jaymie and thanks and agreed. Note that the requirement is that a given proportion of sales (or revenues or whatever one might believe optimal) comes from a sustainable market which is new to the industry. Note that the words "Disruptive Innovation" are never spoken.
The question then becomes whether this requirement, if fulfilled, would be more likely than not to result in Disruptive Innovation (as one might define it based on the Christensen observations).

Disruptive versus Sustainability - Personalities
Eyal Policar, Entrepreneur, Israel, Member
Is first and foremost about personalities. A disruptive innovator is usually very creative, visionary, not detail oriented, doesnít like the facts to confuse the issue, is a real change agent, whereas a sustainable personality is more in-depth, detailed, anti paradigm, anti-change. One looks for improvements via best practices while the other believes in a total overhaul.
You need both since sustainability many times demands disruptive innovation and going through a disruptive change, also demands holding on to what you have until you let go.
Read-The synergist- Mckeown, Influence-Cialdini,Innovate or Die-Matson, Switch-Heath, framework to discover your personality type MBTI.

Perhaps It's Time to Redefine the Job
Rick Mueller, Professor, United States, SIG Leader
Thanks Eyal, your concerns, similar to those of Charles Alter earlier in the thread, are clearly stated and appreciated. At the same time, the skill sets of many functions have been necessarily expanded from their prior scope (marketing now requires aŮ increasingly high component of social media skills for example). The time of the non-ambidextrous product manager may have similarly come to an end.

Innovation You Can Sell
Mark Fuller, Director, South Africa, Member
Rick I agree with you entirely. I have used Value Stream teams amongst other tools to drive customer-centric innovations designed to offer a value innovation. This has led to new product, markets and channels. I wrote about it in an article in March 2015.

Great Example in More Than One Way
Rick Mueller, Professor, United States, SIG Leader
Hi Mark and thanks! I think the Yellow Tail wine example you referenced provides excellent guidance on how a brand manager might create a new market by (in this case) superimposing lean principles on a Blue Ocean strategy.

A key product position (extracted from bit.Ly/1DRXkGf) reads: "Yellow Tail isn't wine as we know it ó it's a whole new thing, designed to appeal to the 85% of non-wine drinkers, while not offending the 15% who already like wine"

What followed as we know, however, is where having a seasoned brand manager pre-positioned at the front end of this thing would have helped. In much the same way as the US first invented and then lost the electronics and auto industries to Japan, Casella (inventor/producer of Yellow Tail) was brilliant at market creation but entirely lost when it came to the sustaining part and as a result is said to have decimated the entire Australian wine industry in the process.
Thanks again for the VERY important lesson to be learned here.

Disruptive Innovation is Client / Market Oriented
Gandhi Heryanto, Management Consultant, Indonesia, Premium Member
The term Disruptive innovation was first popularized by Clayton Christensen from Harvard University in 1995. On his website and in his book "The Innovator Dillema", he argues that since companies tend to innovate faster than their customerís needs to expand, most organizations eventually end up producing a product or service is really to sophisticated, too expensive, and too complicated for many customers in their markets. So you have to be oriented to your market to apply the disruptive innovation.

The Role of Brand Managers in Disruptive Innovation
Rick Mueller, Professor, United States, SIG Leader
Yes Gandhi, that is the Disruptive Innovation topic weíre talking about. Operationally, Christensen recommends that Disruptive Innovations be launched and maintained by independent subsidiaries due to a demonstrated lack of willingness of mainstream management to support them at the expense of further improvement to mainstream products.

In this thread I propose to resolve this conundrum making brand managers responsible for launching a certain proportion of their product line in markets new to the industry (instead of launching a subsidiary).

Is such a plan viable and what is the probability that doing so (developing a certain proportion of product specifically for a market which is new to the industry) will result in Disruptive Innovation (defined in a way which can be supported by Christensenís observations).

Company Size Matters for Answering the Question
Elizabeth Fowler, Student (MBA), United States, Member
I agree with @Charles Alter, a marketing person might be better suited for pushing into new areas of innovation rather than a brand manager. However, if the company is small or new, the brand manager may have to multi-task!

Indeed Marketing Should Be Involved, But Held Responsible?
Rick Mueller, Professor, United States, SIG Leader
Hi Elizabeth and thanks, size does matter, but in firms where the marketing manager is not the brand manager wearing a different hat, would it make more sense to expect marketing to dictate product design and delivery or have that be done by a product manager with a representative from marketing on his team?
Thank you for your input and engagement.

Disruptive Innovation Responsibility
Gandhi Heryanto, Management Consultant, Indonesia, Premium Member
Rick, as an alternative of Christensenís recommendation for the responsibility of launching the disruptive innovation for current situations which is complex and need quick decision, I think the CEO of the company might be suitable. They are selected for their ability to act and can no longer afford much time for in-depth study and review before making choices, which can threaten responsibility in the medium or long run.
Their responsibility will remain a strong concern in the innovation process with forecasting, anticipation, precaution and calculated risks should be integrated in the innovation processes.

Responsibility for both Disruptive and Sustaining Innovation
Rick Mueller, Professor, United States, SIG Leader
Hi Gandhi and thanks for the opportunity to make it clear that I am not wedded to the brand manager in specific being charged with assuring and shepherding disruptive innovation.
As Elizabeth Fowler mentioned earlier, size (as does culture and environment) makes a difference, so I agree that in certain situations the CEO might be the best suited and best positioned to be assigned this responsibility.

The precept that remains constant, however, is that except in rare cases, for disruptive innovation to be supported, sustained, and survive in an incumbent, the responsibility for both disruptive and sustaining innovation (1) must be in the same individual and/or position and (2) (unlike the marketing manager) that individual must have direct P&L responsibility.

The question that remains is whether requiring that some portion of sales/revenues/? comes from markets not being currently served by the incumbent industry will assure disruptive (rather than sustaining) innovation.

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Rick Mueller

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