One prominent theme in the field of organizational future orientation is the concept of disruptions. Generally understood as discontinuities in the external environment that shake up the marketplace and put incumbents at unease, the term particularly rose to prominence in the wake of Harvard Business School Professor Clayton Christensen’s research on disruptive technologies. According to the theory, disruptive technologies (and later also disruptive business models and disruptive product innovations in general) share the following characteristics:
- They initially underperform on the primary performance dimensions valued by mainstream customers
- They introduce or emphasize a second performance dimension that is relevant to niche customers
The twist here is that over time these innovations may gradually improve until they reach a satisfactory level on the (old) primary performance dimension. This is the moment that marks the disruption: the trajectory of performance demanded by the mainstream intersects with the performance provided by the (disruptive) innovation. Mainstream customers start to switch, as the new technology/product/business model scores adequately on the old but is at the same time superior on the new performance attribute.
The theory has received considerable attention from academics and practitioners alike. As a consequence, the prefix ‘disruptive’ has also turned into a buzzword that people are all too eager to attach to all kinds of innovations. Regardless of whether or not the term is always used in the right context, at closer inspection the wording introduced by Christensen fails to capture the essence of his theory. True, it is a catchy term and more or less reflects an incumbent firm’s experience once their established competences and customer relationships are literally “breaking apart” in the advent of disruptive innovations introduced by competitors. However, it does only tell us very little about how the disruption actually emerges. Ironically, this is the piece of information which should be most relevant for practitioners.
A possible avenue to fill this gap is offered by Schmidt & Druehl (2008). The authors re-conceptualize disruption as encroachment, thus highlighting the process in which a disruptive innovation diffuses into the world. Along with a typology of encroachment from the low-end, high-end, or a totally detached market they show that potentially disruptive innovations can be recognized using metrics from different customer segments and their willingness to pay for certain performance attributes.
Beyond this analytical contribution, their terminology captures more precisely what is really going on in the case of disruptive developments. As mental models by decision makers (and every other individual) rely heavily on their verbal representation, this should not be taken lightly. In an interview given earlier this year, Christensen himself states that he would not use the term disruption to label his theory again as the term implies false connotations (Christensen & Euchner, 2011, p.16). Interestingly, in the same interview he also shares an anecdote from Intel, where his actual model was not able to provide answers to managerial problems. What really made a difference was the introduction of a common language to frame the problem and reach consensus on a counterintuitive course of action.
Full references:
Schmidt, G. M., & Druehl, C. T. (2008). When Is a Disruptive Innovation Disruptive? Journal of Product Innovation Management, 25(4), 347–369. (link)
Christensen, C., & Euchner, J. (2011). Managing Disruption: An Interview with Clayton Christensen. Research-Technology Management, 54(1), 11–17. (link)