In today’s fast-changing world, businesses need to be constantly innovating to stay ahead of the competition. But how do you go from being a small player to a major disruptor in your industry? This blog post is based on insights from Harvard Business Review. It will explore the concept of disruptive innovation. It will provide you with the key steps you need to take to become a successful disruptive Innovator.
What is Disruptive Innovation?
Disruptive innovation is a term coined by Harvard Business School professor Clayton Christensen. It describes a process by which a small company enters a market with a simple, low-cost product or service that appeals to a new set of customers. Over time, the disruptor improves its offering and begins to take market share away from the established players.
How Does Disruptive Innovation Work?
There are three key stages to disruptive innovation:
- The Incumbent Focuses on Sustaining Innovation:
- Large companies typically focus on improving their existing products and services to attract higher-paying customers. This leaves a gap in the market for simple, low-cost alternatives.
- The Disruptor Enters the Market:
- A small company enters the market with a basic offering that meets the needs of customers who are being ignored by the incumbent.
- The Disruptor Improves its Offering:
- The disruptor continues to improve its product or service, making it more appealing to a wider range of customers. Eventually, the disruptor takes over the market.
Examples of Disruptive Innovation:
There are many examples of disruptive innovation throughout history. Some of the most famous include:
- The steel mini-mills: These small mills started by producing low-quality rebar. Then, they eventually moved into sheet steel, stealing business from the large mills.
- Car makers like Toyota and Hyundai: These companies launched with economy models. Then, they eventually added luxury features and brands, disrupting the market for established carmakers.
How to Become a Disruptive Innovator:
If you want to be a disruptor in your industry, you need to follow these steps:
- Identify a Job to Be Done: What job do your customers need to get done? Don’t focus on product features or market size.
- Segment Customers by Job: Not all customers are the same. Segment your customers by the job they need to get done, not by product market size or demographics.
- Develop a Basic, Low-Cost Offering: Create a simple, low-cost product or service that meets the needs of your target customers.
- Treat the Project as a Separate Unit: Disruptive innovation requires a different approach than sustaining innovation. Treat your disruptive project as a separate unit with its own business model and growth expectations.
Disruptive innovation is a powerful tool for businesses that want to grow in a fast-changing world. By following the steps outlined above, you can increase your chances of becoming a successful disruptor.