In 1995, Harvard Business Professor Clayton Christensen coined the term “disruptive innovation.” It came to be known as the most influential business idea of the early 21st century. As Christensen and his colleagues continued analyzing this idea, business owners and managers started questioning the way they worked. Five years later, in an article named “Meeting the Challenge of Disruptive Change,” Christensen looked at modern business challenges through a new lens.
Disruptive innovation, or disruptive change, seems self-explanatory. It refers to any new idea, practice, or circumstance that shakes up existing conventions. For example, the fast growth of digital technology within the last decade has brought drastic changes to office work. As the nature of tools and priorities has changed, so have employer-employee relations. The performance appraisals at modern startups, for instance, are worlds apart from those of the last generation. With the pace the world is changing, the way we view business may completely turn on its head much sooner than we think.
But what exactly counts as disruptive innovation or change? And how is it any different from regular change? Well, it’s easier to understand using Christensen’s framework. Within business, he divides innovation into two types: sustained and disruptive.
Sustained innovation follows patterns that have already proven their worth. For instance, if a business knows that its customers love saving money, it will keep launching new discount schemes and promotions. So, it holds on to one tried and tested theme and uses it in new, creative ways. The main selling point of every scheme remains the same: customers can get value for their money. Usually, big, established companies focus on sustained innovation. Because why should they fix what isn’t broken?
Disruptive innovation, on the other hand, introduces something totally new to the market landscape. It could come about with a new idea, new technology, or even a new market demographic. A great example you can witness today is Generation-Z or Gen-Z. This comprises the teenagers of today who were not even born 15 years ago. And today, they are the target demographic of nearly all businesses. Wielding the power of social media, these teenagers can turn the tide on any brand or organization. So businesses launch unique, new products that can satisfy this demographic.
These changes often come about slowly, but completely change a business landscape. The journey from point A to point B may be gradual. But in the end, point B looks nothing like point A, and nothing ever will. As time changes, social and political events shape the way people view the world. For instance, a change in global perception towards climate change has shifted consumer wants. Now, people value “green” or “sustainable” products and are willing to pay more for them. Often, businesses also market their “ethical” production practices to gain customers.
Disruptive changes can also be sudden. Unforeseen natural disasters, wars, or illnesses bring out disruptive change. For instance, no one could have predicted the way COVID-19 completely disrupted the way the world worked. The virus affected the entire globe. It changed education, work, healthcare, social behaviors, and consumption patterns. Remote technology saw an incredible boom. It is doubtful that the world can ever go back to what it was before 2020. An event so disruptive forever alters the way people live.
Adapting to Disruptions
To take on such disruptive changes effectively, businesses need to base their decision on a single premise: change is the only constant there is. The world will keep changing, and so will markets. Businesses must adapt. But how?
The first step is to admit that change has occurred, and will occur again. Then, you must accept that you can’t be left behind. Sometimes, businesses are so set in their practices that they refuse to budge. A shift in values, culture and work methods must be welcomed. Recognize that you can retain your identity while allowing it to evolve.
It is normal to be initially overwhelmed by change. But after that, you need to ground yourself. You can do this by carefully taking stock of how things stand. How many resources do you have at hand? How can you utilize them? Are there any losses you must cut to move forward? What is your next goal, and how can you achieve it? A little self-awareness can go a long way. Once you answer all such questions, anyone can face a new challenge with ease.
Sometimes, you can see disruption coming from a mile away. But you can only spot it if you look with intention. As most disruptive changes are gradual, there are usually signs leading to them. So, to best prepare for any change, you need to keep observing. Observe market trends, competitors, consumer interests, and social norms. This way change, when it finally occurs, won’t catch you off guard. Also, listen to what people are talking about, especially those usually at the margins. If you aim to serve and satisfy people with your work, you need to value their wants.