Innovation Tips

…a monthly internet letter addressing key aspects of

collaborative innovation

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Disruptive Innovation—the Instrument of Creative Destruction

We often assume that if we persist in ongoing improvement, if we listen to our customers or our constituencies, if we continually improve our service or our products, we will be successful and thrive. And this is the very mantra that brings great companies to their knees and sometimes destroys whole industries.

Though constant innovation and improvement are valuable ways of operating, they can also blind us to the significant incongruities in our operating environment that, if not fully understood, can cause the demise of our organization. These significant incongruities are often symptoms of disruptive innovations—those new approaches to delivering products or services that often accompany major and lasting market changes.

The classic example of products that were destined to fail, and with them whole companies and even an entire industry, were buggy whips around the turn of the century. A disruptive innovation had been introduced that would put virtually all the buggy whip manufacturers out of business. With our hindsight of one hundred years, we know that disruptive innovation was the automobile. But living in those times, when travel by horse-drawn carriage was simply the way people traveled, and had always traveled, the introduction of the “horseless carriage” probably didn’t appear to be much of a threat. Automobiles were too expensive for common people and they were notoriously plagued with mechanical failures. Yet the disruptive innovation of the automobile, though crude at first, did prevail, and wiped out any semblance of an industry that was devoted to horse-drawn travel.

We too live in an age when there are new disruptive innovations being introduced at every turn. In every walk of life, in every industry, dramatic and often sudden change is afoot that can undermine the very survival of an industry. Disruptive innovation occurs in advanced technology, where the rate of change is astounding; it occurs in the medical industry, where market changes are upending traditional modes of delivering care; it has occurred in hospice care, where advanced medical treatments are impinging on the palliative care formerly reserved for hospice; it has occurred even in religious circles, among religious institutions that have been the moral backbone of society.

We would all do well to pay attention to the incongruities around us—those symptoms that denote significant structural changes in our operating environments. It is no longer enough just to pay close attention to the customer and to encourage constant improvement. It now behooves us to pay attention to what is amiss, to the disruptive innovations that may have a dramatic impact on the very survival of the organizations we serve.

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