"Providers of disruptive products or services such as the PC, or more recently Netflix, can gain a foothold at the bottom end of the market because established players tend to focus on sustaining innovations, such as incremental improvements to their core products or services.
While it’s natural to want to keep paying customers happy, “the risk with this blinkered approach, however, is that you could be neglecting an overlooked area of the market that could actually be a key growth driver,” says Huw Owen, a regional head at software company Couchbase."
Duncan Jefferies Raconteur July 25th 2019
Jefferies explains that "Providers of disruptive products or services such as the PC, or more recently Netflix, can gain a foothold at the bottom end of the market because established players tend to focus on sustaining innovations, such as incremental improvements to their core products or services."
Over time constant incremental innovation can deliver significant competitive advantage but only if leaders set ambitious goals. A rule of thumb is that innovation and transformation projects should deliver a TEN TIMES DIFFERENCE.
No mere 20% ROI but a major change. Not just inventing a faster horse but introducing the internal combustion engine, affordable vehicles and a road network.
With the right vision, strategy, leadership, culture, resources and ability to execute disruptive innovation is possible. Without it you may just about deliver incremental improvement. In that case you are always vulnerable to a competitor that pivots and suddenly leaves you behind.
"Fail fast and fail often" is a mantra for iterative development and innovation. Black Box encapsulates that tactic. But it is shared by both disrupters and incremental improvers.
The missing piece in the innovation jigsaw is a laser focus on the customer. "In fact, Ramyani Basu, digital transformation partner at AT Kearney, believes that when innovation hits, business turnaround is nigh-on impossible if you’re not truly customer-centric. “History has shown time and time again that those who survived disruption were those who listened to their customers’ pain points,” she says."
Jefferies states "Netflix didn’t kill Blockbuster, ridiculous late fees did. And it’s the same for Uber, Amazon and Airbnb – the technology itself isn’t the disruptor, being customer-centric is.”
So- track your competitors, track new tech entrants to the market, and be sensitive to trends and customer pain points to drive your innovation efforts.
should also embrace the fact that risk and failure are essential components of true innovation, green-lighting ideas quickly and learning on the fly so that new products or services don’t become obsolete before they hit the market. The smartest organisations also think of themselves as collaborators and partners in an innovation ecosystem that includes startup communities, universities and other organisations beyond their own sector. “Organisations that are able to collaborate, to partner, to acquire without killing off the acquisition – they are the ones more likely to thrive in the new disruptive landscape,” says Ms Harrison-Miraue
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