On Disruption - AvNetwork.com

On Disruption

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More than most, our industry has had a tradition of dealing with disruptive technology on a regular basis. The trend only seems to be accelerating. Disruptive technology innovations offer simple and inexpensive answers to often vexing problems, and in our field they include flat panel displays, digital signage, remote monitoring, and control of systems, and even those annoying ads before movies. Our industry has seen wave after wave of disruption and we have become technology surfers as a result.

Disruptive technology is marketed differently than traditional technological solutions. Disrupters often attack established market leaders. It is these disrupters (University of Phoenix online education, Toyota hybrids, and Apple personal music devices being prime examples) that are making the more profound changes in our society.

Yet disruption typically causes havoc in traditional management approaches. Many managers fundamentally loathe creating growth via innovation, choosing instead to float through an ether of fleeting success and catastrophic failure. Somewhere along the line in our culture we built a fence between our engineering and business schools; and rarely the twain shall meet to cooperatively build meaningful solutions. Yes, it is easier to sell commodities in the short run. Email your supplier in China and ask them to ship more. Remember that commodities are synonymous with low profit margin, and even your supplier is always on the lookout for innovative and disruptive technologies.

Disrupters often attack markets that established leaders consider unattractive or uninteresting. Competitors will look at a disrupter and say, "They must be losing money at those price points." That is not necessarily true; they may have an entirely different cost structure.

Anyone starting off a disruptive enterprise today will inevitably be asked the following questions by investors, coworkers, and friends.

Will it meet the magical 27 percent threshold return?

That's the number investors are looking for after a three-year period right now. If your business plan can sustain such returns, it passes the basic threshold for subsequent questions. If not, it's on your credit cards and in your garage.

Is this innovation coming at the right time?

One core element of succeeding with disruptive innovation is learning to look at markets in new ways. Remember a simple principle: Customers don't really buy products; they hire them to get "jobs" done in their life. To find growth opportunities then, look for customers who are frustrated with their inability to get an important job done.

Can we get it to market quickly enough?

Having the proper resources to bring your product to market and properly working are essential. A good idea is not enough; it must have good execution to support it in a timely manner. Some years back I worked with a manufacturer with an integration division that refused to use their own products as they were so far behind their competitors in features, functionality, and price. The caveat is that a product need not be all things to all people. Some Swiss Army knives have so many features they don't fit in your pocket anymore. Less can be more to some users.

Does it fit with your innovation portfolio?

Make it better, or the idea should be rejected out of hand. An ideal product will expand your capabilities multifold and enhance your reputation as an innovator.

Should we look outside the company for help?

Sometimes you need to swallow your pride, squelch your ego, and admit to yourself that you need help to bring something to fruition. Specialists abound in every field and are eager to help you. Limiting your cost exposure to such specialists is almost entirely dependent of the quality of scope you provide them. This is a very good way to tighten up your product expectations as well.

Do we have the resources we need?

While you may have many internal resources available, they may not always be the ideal resources for the task at hand. Staff entrenched in existing protocols and methodologies can actually be detrimental to implementing disruptive technology.

Could our resources be better invested elsewhere?

Ah, the ultimate balancing act within an operation. A question that should be asked and answered regularly by senior management.
Have we considered the innovations lifecycle?

Every product has a lifecycle, and every meaningful product spawns competitors. The very nature of a disruptive product is to upend an existing market segment. In order to do that it must be brought to market quickly and regularly refreshed in order to maintain its leadership position. Do exactly what your competitors don't want to do. New product developments require regular reviews and adjustments to curb large investments. Make sure to adjust your strategy to success.


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