Disruptive innovation changes everything. Incumbents are toppled and upstarts are victorious simply because they turn everything on its head. Business models, markets even customers are re-defined in a disruptive innovation. Organizations that can disrupt successfully can carve entirely new markets and enjoy immense success. Organizations that can disrupt consistently will achieve rock star status in no time.
So what exactly does it take to disrupt? How can you come up with the next big idea? John Sviokla posted on his blog at Harvard business publishing about four things you should have in your disruptive innovation toolkit. Here is my spin on those four concepts: Simplification, there is nothing cheaper then free, take advantage of new technologies to drastically reduce cost and build a small team of phenomenal people.
- Simplification – sometimes less is more. Complexity adds costs and confuses consumers. Svoikla uses the example of Southwest airlines – their fleet consists of a single type of aircraft, they sell direct to customers using a simple fare scheme, every employee performs multiple duties and the savings are passed on to the customer.
- There is nothing cheaper than free. How can your competitor compete with free? How can you make money while giving away your offering? Google has found a way, offering services such as mail, mapping and news aggregation for free while collecting billions in ad-revenue annualy. Get your music free from Pandora, you’ll just have to put up with ads around the border. Get a deal on a new cell phone plan at no extra cost to you – mycellmyterms.com negotiates with the providers to get you the best deal and takes a cut of the profits.
- Take advantage of new technologies to drastically reduce costs. Combine existing technologies to address a problem at a fraction of the cost of current solutions. Home automation is a perfect example – 10 years ago it would costs thousands of dollars to control your home’s lighting, HVAC and media from a central location. Now you could do it with off the shelf products for a couple hundred dollars. Anyone who has read the Innovator’s Solution knows that the use of mini-mill technology completely changed the face of the steel industry. Take advantage of these new cost savers and create a real competitive advantage.
- Build a small team of phenomenal people. In today’s world it is possible to create a huge amount of value with a small number of people. Look at companies like facebook or craigslist who generate massive value with a small team of amazing people.
Creating disruptive offerings it not easy and it takes a real understanding of the market and the consumer need. John Sviokla’s tips on starting your innovation toolkit could be a helpful starting point in your quest for disruption.
Check out John Sviokla’s entire post here.
