All about Disruptive Innovation
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The Hybrid Innovation Approach to Manage Technological Disruptions
Eugene James, Manager, Switzerland, Premium Member
Companies need to carefully think about the timing and way to adopt technological disruptions. Adopting technological disruption too late can squander competitive advantages, but adopting it too early can be devastating as well. Rather than spell doom and gloom, it is important to embrace disruption by combining current with novel technology.
 According to Furr and Snow (2015), the “hybrid approach” is an effective way to deal with technological disruption. In essence a hybrid strategy is intended to serve as “stepping stones to survive and prosper in the next generation.” Hybrids combine different stages of disruption: mature, recent and emerging. For each stage a particular form of hybrid strategy exists and is defined by the type of market and customer needs:
- MATURE STAGE: In the mature phase of disruption, companies identify means to adapt. A bottleneck strategy is relevant when the business ecosystem is still not fully developed and complimentary goods are not readily available.
- RECENT STAGE: When disruption is already under way, companies must capture information regarding the technological breakthroughs and customer needs. A niche strategy is well suited to take advantage of particular customer needs that are not fulfilled.
- EMERGING STAGE: In the case of emerging disruption, companies can integrate concepts of prototypes into current technology to test the relevance and development of disruptive features. These may serve the purpose of improving existing products and services.
Besides the stage, following considerations can guide the appropriate choice for a hybrid innovation strategy:
- Pick a strategy that enables the company to position itself so as to maximize the impact of the hybrid innovation.
- Determine the company’s capabilities. Figure what capability can be acquired and what can be developed within. Be mindful of how the capabilities can integrate within the existing business model and whether new investment is required.
- Plan investment in new activities needed to develop the hybrid innovation.
- Estimate the time-frame for the hybrid innovation. Consider whether it will be for a short period or in the long run. However, resist getting stuck with a particular solution as this can be costly in terms of resources and missed opportunities.
Source: Nathan Furr, Daniel Snow, “The Prius Approach”, November 2015, HBR.
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Examples of (Successful) Hybrid Innovation Strategy?
Rick Mueller, Professor, United States, SIG Leader
Eugene, Christensen appears to embrace/endorse the hybrid approach for education as well. I have yet to see, however, any hybrid become a dominant design, any firm become dominant in its industry on the basis of a hybrid design, any firm or industry upend any other, or any firm or industry avoid becoming disrupted on that basis.
Despite his apparent subscription to a hybrid approach for education, in the past he used the cable versus hydraulic excavator example to illustrate the fallacy of hybridization as a response to disruption. Thoughts?
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Examples of Hybrid Innovation Strategy 1: Intel's Pentium P6 Processor
Eugene James, Manager, Switzerland, Premium Member
Thank you Rick for your comment. I agree that hybrid solutions do not generally lead to end-products as expounded by Furr and Snow. In fact end-products tend to be rare. One interesting example does suggest the opposite though: in 1995, Intel responded to an innovation in the domain of microprocessors consisting of "reduced instruction-set computing", by combining existing technology of complex instruction set computing technology with the former that gave rise to the "Pentium P6". Thus, unless there is truly a market for the hybrid end-product, hybridization serves essentially as a mean to create a transition from old to new technology.
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Intel Disruptive Innovation Examples, But not Succesful
Rick Mueller, Professor, United States, SIG Leader
Hi Eugene and thanks. Intel is a treasure trove of Disruptive Innovation examples, both pro and con. Grove's creation of the Celeron was a direct result of having been exposed to Innovator's Dilemma and pretty much finished their problem with AMD cloning.
That being said, Intel's CPU business hasn't had any growth in recent years due to the emergence of ARM (which is pure RISC). The integration of RISC characteristics into Intel's CISC chips wasn't enough and RISC (ARM) now owns the mobile market.
In this case (and I suspect in many others) hybridization may be yet another way to "extend and defend" a paradigm which already has its best days behind it. Makes me wonder if there are any cases of imminent Disruption where hybridization was a successful bridge between the past and future? Thanks again.
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Examples of Hybrid Innovation Strategy 2: Microsoft's Surface Device
Eugene James, Manager, Switzerland, Premium Member
The world of computing does seem to offer a fertile ground for such strategies. Microsoft appears to be quite successful with its Surface device: part tablet - part tablet laptop. There is possibly scope for it to render the concept of laptop still relevant.
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Surface no Success in Hybrid Innovation Strategy
Rick Mueller, Professor, United States, SIG Leader
Hi Eugene and thanks again. Surface is certainly a contemporary example of hybridization that should and can be examined.
So if we define success in Disruptive Innovation, I would think it to be the usurping of incumbent dominance or the effective resistance thereto.
Keeping in mind that the Windows OS has gone from 90% device share to 14% (which includes desktops, phones, and tablets, and that Android is at 48%, I don't think we see the success there.
In terms of revenue, last year Surface had its first breakeven year after years of losing money, and while sales were up a little earlier in the year they've dipped once again (http://bit.Ly/1QWpRVw), so at this point I'm not expecting surface to be an example of exception. Once again, however, still a good product to include in the sample. Thanks again!
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