Disruptive Innovation
(Christensen)

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Summary

Clayton Christensen disruptive innovation

What is Disruptive Innovation? Description

The Disruptive Innovation model from Clayton Christensen is a theory that can be used for describing the impact of new technologies (revolutionary change) on a firm's existence. Clayton Christensen first coined the phrase "disruptive technologies" in 1997, in his book "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail".
He showed that time and again almost all the organizations that have "died" or been displaced from their industries (because of a new paradigm of customer offering) could see the disruption coming, but did nothing until it was too late.


By doing what good companies are supposed to do - cater to their most profitable customers and focus investments where profit margins are most attractive - established industry leaders are on a path of Sustaining Innovations and leave themselves open for disruptive technologies to bury them. This happens because the resource allocation processes of established companies are designed to maximize profits through sustaining innovations, which essentially involve designing better and better mousetraps for existing customers or proven market segments. When Disruptive Innovations (typically cheaper, simpler to use versions of existing products that target low-end or entirely new customers) emerge, established companies are paralyzed. They are almost always motivated to go up-market rather than to defend these new or low-end markets, and ultimately the disruptive innovation improves, steals more market share, and replaces the reigning product.


Types of Innovation

Companies have two basic options when they seek to build new-growth businesses. They can try to take an existing market from an entrenched competitor with sustaining innovations. Or they can try to take on a competitor with Disruptive Innovations that either create new markets or take root among an incumbent's worst customers.

There are two distinct types of Disruptive Innovations. The first type creates a new market by targeting non-consumers. The second competes in the low end of an established market.
 

Origin of the Disruptive Innovation model. History

Christensen's research and studies at Harvard.


Usage of the Disruptive Innovation method. Applications

  • All kinds of companies - as they can be impacted by technology innovation/change.

Steps in Disruptive Innovation. Process

  • The model shows that, as the performance demanded by the customers of an existing market increases over time, so does the performance provided within a technological paradigm. Often the performance improvement provided has a different trajectory to the trajectory of performance improvement demanded by the customers (see figure). When the trajectory slopes differ, and the performance provided exceeds performance demanded, new technologies that were only performance competitive in remote market niches may migrate into other customer networks. This provides innovators with a vehicle to new customers, who would have previously viewed their offerings as substandard; and enables them to offer established mainstream markets a new set of performance value attributes that are now more relevant than the current paradigm.
  • Disruption and commoditization actually go hand in hand. A company that overshoots, simply can't win (a firm that improves a product to the point that it is more than good enough for customers to use and pay a premium for). Either disruption will steal its markets, or commoditization will steal its profits. While new waves of disruption wash over an industry, the place where the money will be will shift across the value chain over time. While this happens, companies that position themselves at a spot in the value chain where performance is not yet good enough will capture the profit.

Limitations of Disruptive Innovation. Disadvantages

  • Disruptive Innovation requires a separate strategy process. This process must be emergent and focused on unanticipated opportunities, problems and successes, rather than intended and focused on improved understanding of what works and what doesn't.
  • Instead of designing products and services that address current behavior of current customers, the underlying aims of people should inform the design of innovations. Understanding what people really need is however far from easy.
  • Disruptive businesses can't achieve big profits very fast, due to their nature (addressing new markets, or addressing low end of existing markets). Venture capitalists are increasingly impatient for businesses to deliver profits.

Assumptions of Disruptive Innovation. Conditions

Companies risk death with decisions to ignore technologies that do not appear to address their customers' needs, as they become fatal when two paradigmatic trajectories of progress interact.


Book: Clayton M. Christensen - The Innovator's Dilemma

Book: Clayton M. Christensen - The Innovator's Solution

Book: Clayton M. Christensen - Seeing What's Next 


Special Interest Group

Disruptive Innovation Special Interest Group.



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Forum

Forum discussions about Disruptive Innovation. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.


Start a new topic about Disruptive Innovation

 

Disruptive Change and HR
Innovation is necessary and mandatory for a firm to be competitive in the current operating business environment. However, when introducing new ideas of doing business, new technology to support the ...
14
 
1 comments
WHAT is Being Innovated? The 4 Ps of Innovation
There are actually 4 things or objects that one can innovate:
...
11
 
Timing is Important to Make an Innovative Idea Disruptive
America had to be discovered more than once, until it really had been discovered. The Apple Newton was a superior answer to a question that people did not bother at that time.
Likewise, Kodak inv...
9
 
10 comments
Leadership and Taking Action
Don't forget the important point of taking action after all the theorising! Sometimes I think it's more down to the leadership of the company.
If you stand on train tracks and see the train comin...
8
 
Blue/Innovate and Red/Disrupt
An interesting exercise is to work through a product's feature set using both the Strategy Map of "Blue Ocean Strategy" (Kim & Mauborgne) and the disruputive thinking of Christensen.

Blue...
6
 
🔥 NEW Innovation Ideas in Economic Slowdowns
Innovation has always been the hallmark of doing good business. A lot of products that we enjoy today that were developed by major corporations started out as innovative ideas. Numerous small business...
6
 
4 comments
Comparison Disruptive Innovation versus Blue Ocean Strategy
Is Disruptive Innovation a liitle more detail of Blue Ocean Strategy??
If not whats the difference between the two?...
5
 
3 comments
Disruptive Innovation or Improved Technology?
Disruptive innovation is only a means of improving existing products as it creates new, better and unexpected sets of values of products. Every modern organization should strive to maneuver by being a...
5
 
2 comments
Slow Innovation: PROs, CONs and Tips
When we talk about innovation, we often associate it with disruptive innovation efforts / large-scale processes that change an organization’s business model or products quite radically. But, there is ...
5
 
Business Model Innovation
Dear all fans of Clay!
IPTV is probably and most likely a disruptive technology, but more important, is it feasible to follow a disruptive strategy? Well, I think it's important to look at the bu...
5
 
Disruptive Innovation and Public Sector Organisations
This model appears to describe the potential life cycle of a firm in market economies where profit maximisation is the goal. If public good is the goal as provided by public sector organisations then ...
4
 
9 comments
Is Value Innovation Disruptive Innovation?
Should value innovation, the corner stone of Blue Ocean Strategy be considered disruptive innovation?...
4
 
7 comments
Paradigmatic Changes Require Re-orientation of Ones World Views
So often there are changes which are semantic. My view is that paradigmatic changes require re-orientation of ones world views. That is very ambitious I know especially in the education field that I...
4
 
1 comments
Leadership Skills / Approaches for Successful Innovation
Innovation leadership requires other approaches than general leadership for the core business. Furr and Dyer (2014) outline some unique leadership skills/approaches required for successful innovation:...
4
 
34 comments
Asymmetric Innovation
Asymmetric Innovation = Asymmetric Situation + Customer Value.
Asymmetric Situation is a resulting none-direct-competitive situation in favor of challengers who take a series of strategic actions...
4
 
A Disruptive Innovation Questions what we Don't Know
It's hard to change. This holds for organisations and people. A disruptive innovation questions what we know and exposes that we don't know, what we don't know.
It's an issue of complexity and re...
4
 
Disruptive Innovation: What Causes the Creative Leap?
What causes the difference in magnitude of creative leap? One may create a quantum leap, but other innovations may not be that significant. Is there a process to manifest and channelize creative energ...
4
 
16 comments
The Resources-Processes-Values (RPV) Framework
The resources-processes-values (RPV) framework is a useful tool to understand why big companies fail in responding to disruption:
RESOURCES are usually assets like technology, fund and people...
4
 
1 comments
The Word 'Disruptive' in Disruptive Innovation
I wonder if the term 'disruptive' is in fact the appropriate word.
If it's agreed that it means: unexpected, large scale, sudden, different approach innovation or large unexpected / clever change...
3
 
2 comments
Better Input from Consumers Needed for Disruptive Innovation
Technological innovations bring positivity, a better quality of life. But have they considered those without access to normal technology, to achieve current level of innovation?
A little prudence...
3
 
2 comments
What is Disruptive Innovation Exactly? Definition
A "definition" of Disruptive Innovation that's frequently quoted is one which is located on Christensen's website. It reads:
"DISRUPTIVE INNOVATION describes a process by which a product or servi...
3
 
5 comments
Are Clayton Christensen’s Disruptive Innovation Characteristics Useful in Practice?
A recent write up published in MIT Sloan Management Review concludes that Disruptive Innovation theory is "not very useful" for making predictions based on research in which 77 cases from Christensen’...
3
 
Leapfrogging Technologies by Developing Countries
Leapfrogging is a way for developing countries to benefit from earlier skills and advancements of the developed world by skipping altogether a technological stage. For example, many developing countri...
3
 
Is Disruptive Innovation Radical?
Disruptive Innovation is often incorrectly described as a radical rather than incremental change in technology. In fact, one of the fundamental elements of Christensen’s work was to illustrate that ma...
2
 
6 comments
Distinguishing Three Types of Innovation
Christensen (2014) argues that investing in different types of innovation will influence markets and firms in different ways. Therefore it is important to make a distinction between the different type...
2
 
2 comments
Breakthrough versus Disruptive Innovation
Breakthrough versus Disruptive Innovation - what's the difference? Is there a difference, necessarily?...
1
 
1 comments

Best Practices

The best, top-rated topics about Disruptive Innovation. Here you will find the most valuable ideas and practical suggestions.


Innovation Strategy: The Three Horizons of Growth (McKinsey)
One of ways of thinking about innovation strategy is to use the 3 Horizons of Growth developed by Steve Coley at McKinsey.
The framework provides a useful mold to formulate an organization's prod...
56
 
52 comments

The Jobs to be Done Approach (JTBD) and Disruptive Innovation
BACKGROUND
The Theory of Disruptive Innovation helps companies capture opportunities and understand threats coming from their external environment. In particular for and from innovative entrepren...
28
 
13 comments

Disruptive versus Incremental Innovation
Typically, Incremental Innovation exploits existing forms or technologies... Improves upon something that already exists or reconfigures an existing form or technology to serve some other purpose... I...
27
 
13 comments

Disruptive Innovation: Product versus Platform
DISRUPTIVE PLATFORMS often have a bigger impact than disruptive products. Some examples:
Uber owns no vehicle, but is now the largest taxi company in the world. Alibaba has no inventory, b...
25
 
14 comments

Strategic Options for Old-Technology Firms
What should be the strategic response of old-technology firms when a promising new technology shows up? Typically firms respond by either
1. Fighting the new technology, or
2. Trying to mak...
22
 
7 comments

Tips for Innovation Strategy
As a part of corporate success factor development process, we have found a need to build up an "Innovation Strategy". Can anybody give good hints or examples of what to or not to take into considerati...
20
 
10 comments

Impact of the New Technology
Our countries are not concerned by this issue because not developed. We are only getting negative impacts due to this technology development.
However, I can add that theses negative impacts conce...
20
 
1 comments

Typical Disruptive Technologies
It is important that business and policy leaders understand which technologies might matter to them and prepare accordingly. But which technologies could drive truly massive economic transformations a...
16
 
How to Develop Disruptive Innovation Skills?
I believe disruptive innovation skills can be mostly taught.
Beyond the associative skills which is cognitive, the other behavioral skills required to be a true innovator are discovery skills - q...
15
 
4 comments

How can Incumbents Respond to Disruptors?
The challenges to incumbent majors across industries have come mainly from low-cost competitors and from dotcoms (e.g. british Airways and KLM versus EasyJet and Ryanair, Merrill Lynch versus Charles ...
15
 
3 comments

Diversity of Perspective is Key to Disruptive Innovation
“All new ideas are combinations of old ideas, but not all idea combinations are created equal,” writes Frans Johannsen.

An HBR article by Johansson tells how Mick Pearce designed the Eastga...
14
 
9 comments

How to Find Innovative Ideas? From Analogous Markets...
When trying to find innovative ideas for your organization, several studies have revealed that it is highly valuable to access expertise from outside your area of expertise. This is - according to Fra...
11
 
3 comments

How to Sustain Disruptive Innovation?
After gaining entry into some (new) market segment through disruptive innovation, how do you SUSTAIN your position and growth...
Does that require other cycles of disruptive innovation, or will r...
10
 
26 comments

Is Cirque du Soleil the iPhone or the Seiko of Circus?
An article about the Cirque du Soleil I recently read made me wonder whether we should think of Cirque du Soleil as the iPhone or the Seiko of Circus…

Let’s take a look first at the differe...
7
 
6 comments

Ways to Incorporate Disruptive Innovation as Part of the Management Agenda
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 don’...
7
 
14 comments

The Hybrid Innovation Approach to Manage Technological Disruptions
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...
5
 
5 comments

Expert Tips

Advanced insights about Disruptive Innovation. Here you will find professional advices by experts.


Innovation Pitfalls

Avoiding Innovation Traps
Harvard Professor R. Moss Kanter describes 4 common innovation mistakes and corresponding remedies (HBR Nov 2006): 1. S...

How to Find Good Product Ideas? List of 10 Approaches

Discovering New-Product Ideas, Creative Approaches
In his book “Product Leadership: Creating and Launching Superior New Products”, Robert Cooper suggests following ten way...

Challenging the Existing Strategic Logic

Finding New Markets
A tool by Kim and Mauborgne is the "Four Actions Framework". This Four Actions Framework can be used to challenge the ex...

The Simple-Cheap-Convenient Approach

Addressing the Unmet Needs of Customers
Based on Christensen’s model of disruptive innovation, Norton and Pine argue that experience innovation can effectively ...

Distinguish Disruptive Technology Innovation From Disruptive Marketing Innovation!

2 Distinct Capabilities...
It is necessary to distinguish between disruptive technology innovation and disruptive marketing innovation, since ther...

How to Detect Consumer Needs that are Unmet?

Product Innovation, New Product Development, Innovation Strategy
In their article New Business Models in Emerging Markets" (Harvard Business Review, January-February 2011), Matthew J. E...

Recent Innovation Trends | New Innovation Types

Open innovation, User Innovation, Value Innovation, Bottom-up Innovation
Roland Bel (2012) outlines and explains four types of innovations that have become more and more important since the las...

Key Challenges of Internet Age for Management and for Product and Service Development

R&D, Product Development, Service Development, Strategy, Marketing, Innovation, Visioning
The Internet age represents a huge challenge for most businesses. Why? Because the Internet, wireless devices such as m...

How to Think Differently in Innovation?

How to Be Innovative, Innovative Thinking
Strategy is always related with risk, due to market volatility. Also today´s volatility is increasing very fast. So inno...

How to Design Experiments to Support Decision-making on Strategic Innovations

Strategic Innovation, Strategic Decision-making, Strategic Experimenting, Experiments, Strategic Testing, Innovation Tes
The probability of success of a major innovation is difficult to assess. Statistics and other datasets only provide info...

Classes of Innovation | Sources of Innovation

Innovation, Creativity, Organizational Innovativeness, Lateral Thinking, Out of the Box Thinking, Blue Ocean Strategy
TWO CLASSES OF INNOVATION Innovation can be triggered or enabled by two broad classes: KNOWLEDGE PUSH: Innovation trig...

How to Lead an Innovation Team

Best Practices, Innovation Team Management
In order to become a great innovation team leader, Ram Charan suggests in the article "P&G's Innovation Culture" (strate...

Creating Organizations to Produce Breakthrough Innovations

Best Practices, Critical Factors, Creating an Organization to lead Radical Innovation
Since 50 years, the Pentagon’s Defense Advanced Research Projects Agency (DARPA) has been very successful in producing a...

Innovating by Reconsidering Value Delivery

Fundamental Innovation
When innovating their business model, companies need to reconsider their value proposition from all perspectives. One of...

Three Critical Capabilities in Developing a Strategic Corporate Disruptive Innovation Competence

(Disruptive) Innovation Competence, Strategic Innovation Capability, Corporate Strategy, Innovation Leadership
Skarzynski and Rufat-Latre (2011) discovered that the successes of disruptive innovators are driven by 3 critical capabi...

Big-Bang Disruption

Technological Innovation
BBD is a term coined by Accenture gurus Larry Drownes and Paul F. Numes. Technological innovation lately started out fr...

What Makes a Company Innovative?

Innovation Best Practices, R&D Best Practices, Corporate Innovation
A futurethink 2006 Innovation Tracker Survey mentions: - Ability to create a climate that continuously fosters innovat...

Why Large Firms are Having Difficulties to Deal with Disruptive Innovations

Innovation Management
Christensen explains why many firms, especially large firms, have trouble with adapting and thus with surviving when dea...

Predecessor of Christensen

Technology-driven Change Theory
The theory of Disruptive Innovation was actually not created by Christensen. It was described by Thomas Hugues, MIT Pres...

How BOP Countries Can Disrupt Western Markets

Disruptive Innovation, Bottom of the Pyramid, Country-level Strategy
After the Second World War, Japan started to develop fast as a result of their disruptive innovation strategy. This disr...

Designing Complex Products or Systems Through Iterative Rapid-cycle Prototyping

Design Thinking, Disruptive Innovation, Blue Ocean Strategy, Introducing Complex Systems, Co-Creation
Today, organizations are increasingly developing and designing new and complex products or systems. In other words, the ...

Misunderstandings on the Concept of Disruptive Innovations

Technology Innovation
In their paper “A Reflective Review of Disruptive Innovation Theory”, the authors mention three misunderstandings on the...

Why Some Technology Revolutions Take Off and Others Don't

Adoption of New Technologies
Back in 1962, Thomas Kuhn wrote “Structure of Scientific Revolutions”, in which he suggested that the entrenched interes...

Geographic Dimension to Explain Disruptive Innovation in Emerging Countries

Disruptive Innovation in Emerging Countries
In the past, it was generally thought that the Western countries were the main sources of innovation while developing co...
Information Sources

Various sources of information regarding Disruptive Innovation. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


Asymmetric Innovation

Challenger or latecomer firms
Presentation by Chris Wu on Asymmetric Innovation. The core concept of his new book steps from Clayton's Innovator's Sol...

Disruptive Technologies

Emergence of Competition
Ron Adner and Peter B. Zemsky formalize the phenomenon of disruptive technologies that initially serve isolated market n...

Introduction to Innovation and Disruptive Technologies

Innovation Management, Innovation Strategy
This presentations is an introduction into the concepts of Innovations and Disruptive Technologies. The following sectio...

Explained: How can Innovative Players Beat Large, Established Firms?

Disruptive Innovation, Innovation Strategy, Competition, Innovators Dilemma, Market Segmentation, Sustaining Innovation
How is it possible that small entrants with limited resources can successfully compete with large, established firms tha...

Prof. Clay Christensen Explains Disruptive Innovation

Innovation Strategy, Strategic Marketing, Research and Development, Strategic Vision
According to Professor Clay Christensen, a "disruptive innovation" is NOT a breakthrough innovation that makes good prod...

Design Thinking for Innovation

Innovation, Entrepreneurship, Design Thinking, CSR, Social Entrepreneurship, Social Innovation
This presentation is about design thinking and the connection to social entrepreneurship. The presentation includes the ...

Disruptive Innovation: Why Market Leaders Fail

Disruptive Innovation, Innovation Strategy, Strategic Innovation, Product Development, Disruptive Technology
In this animated video Prof. Robert Perrons explains Prof. Clayton Christensen`s Theory of Disruptive Technologies and h...

Strategic Innovation Leadership

Leadership, Strategic Leadership, Innovation Management
Presentation about Strategic Innovation Leadership that includes the following sections: 1. Strategic Innovation Leader...

Distinctive vs. Dynamic Capabilities

Inside-out Business Strategy
In this presentation it is about Distinctive Capabilities and Dynamic Capabilities. Distinctive Capabilities are present...

Disruptive Innovation Diagram

Innovation Management
Download and edit this 12manage PowerPoint graphic for limited personal, educational and business use. Republishing in ...

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Compare with:  Product Life Cycle  |  Twelve Principles of the Network Economy  |  Bass Diffusion Model  |  Ten Schools of Thought  |  Blue Ocean Strategy  |  Positioning  |  Innovation Adoption Curve  |  Marketing Mix  |  Forget Borrow Learn  |  Four Trajectories of Industry Change  |  Co-Creation  |  Three Dimensional Business Definition


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