The Technology Leader Awards Committee of the Greater Miami Chamber, of which I am the recurring chair, met the other night. We were establishing the categories for this year’s awards when a great question arose. Is there a difference between innovation and disruption? It stimulated a spirited discussion among the committee members, and I realized that it’s a very important discussion to have when considering the strategy for your business. While we used the terms disruption and innovation in the context of technology, they can be looked at in broader constructs such as your business model. While one could argue that there is a difference between the two, my position is that disruption is a higher form of innovation. The reason is that all disruptors are innovations, but not all innovations are disruptors. The more disruptive the innovation, the higher the stakes and the value you can create in your business.
In simple terms, innovation is just finding a new way of doing something. If you are running a business, it is developing ways to provide a product or service better, faster or cheaper. It is about improving every process with fewer defects, requiring less labor, increasing throughput, etc. It is about changing the usefulness of a product or service. From an even more important standpoint, it is about creating new demand and fulfilling a need that no one else is currently fulfilling. For example, our phones now go everywhere, serve as computers, calendars, watches, and many other things. It is about changing your online experience so that now you can order many products and get them delivered same day. Innovation is about seeing possibilities that others cannot see and making them happen.
When we were discussing categories in my committee, we should not have been asking if there is a difference between innovation or disruption. The real question is “what is the difference between sustaining technologies and disruptive technologies?” While both are innovative, there is a huge difference and advantage to having both.
Sustaining technology improves a product or service in ways that the market does not expect, typically changing designs to address different consumer sets or by allowing a lowering of prices in more mature markets. A disruptive innovation helps create a new market or value chain and eventually disrupts an existing market. Disruption is much more substantial than sustaining innovation because it changes how we think, behave, do business, learn, and go about our day-to-day. Harvard Business School professor and disruption guru, Clayton Christensen, says that a disruption displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.
The innovators’ dilemma is that not all innovation is created equal. There has been much innovation that has turned out to be worthless. In 2010, Time Magazine published a list of The 50 Worst Inventions Of All Time, here are few of my favorites:
In today’s fast-paced world, disruption seems to be short-lived. It is critical that you do not go bankrupt trying to create your innovative idea and that you have plenty of capital behind you to take advantage of your position once you have the opportunity. Speed is also essential. Take the Airbnb example. Given that that the primary key to their success was a website to match hosts and travelers, scaling up quickly to have the largest inventory on a global basis with a lot of traveler traffic to their website was essential. Moving early and fast allowed them to build their brand and presence with no marketing budget. They built their entire empire through social media. The value of their innovation and how they approached is the exception and is what all disruptors should seek to accomplish.
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