Publications & Products
Volume 5, Issue 22

Defining Disruptive Innovation

Disruptive innovation is a buzz phrase in management—but the lessons we've learned about it may not apply to every organization, write three business leaders.

To review: Disruption is the process an organization with limited resources uses to successfully challenge incumbent business practices. Organizations using disruptive innovation may target overlooked customers or perform more efficiently.  

Writing for the Harvard Business Review, Clayton Christensen, Michael Raynor and Rory McDonald examine four facts about disruption that are often overlooked or misunderstood. Christensen is a business administration professor at the Harvard Business School. Raynor is a director at Deloitte Consulting and author of The Three Rules: How Exceptional Companies Think. McDonald is an assistant professor at the Harvard Business School.

Here are their key points about disruption.

  • It's a process. Every innovation starts as a small-scale experience. "Disrupters tend to focus on getting the business model, rather than merely the product, just right," write the authors. This is often why disruptors (Netflix, for instance) go unnoticed by rivals (such as Blockbuster) for some time.
  • Innovative organizations' business models are very different. For example, the healthcare industry is typically built on a system of doctors calling on their experience to diagnose patients and prescribe treatment. But, a number of convenient care clinics have a more process-focused model. They follow standardized protocols to diagnose and treat a small but increasing number of disorders, write the authors.
  • Some will succeed. Some won't. "Success is not built into the definition of disruption," write Christensen, Raynor and McDonald. Plenty of internet companies pursued disruptive paths in the 1990s, they point out, but many did not prosper.
  • The "disrupt or be disrupted" mantra can be misleading. Organizations that are up against other innovative organizations shouldn't close or give up. Instead, they must strengthen relationships with core constituents, invest in sustainable practices and create a new division focused on growth opportunities. When faced with disruptive innovation in a competitor, organizations should create a division or team to "explore and exploit" a new, disruptive model, write Christensen, Raynor and McDonald.

Higher education, they point out, has resisted the forces of disruption until recently—now new institutions and approaches are cropping up to meet the needs of various student populations. Both the incumbents and the newcomers are following similar game plans (investing in research, new facilities, etc.) but the rise of online learning offers, perhaps, a true disruption.

This article is from the Advancement Weekly, Nov. 30, 2015 issue.

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