Every day, innovators and entrepreneurs come up with brilliant products and services that put existing markets at risk of becoming obsolete. These innovative products and services have the potential to push aside market leaders, curving out new markets for themselves in the process. This type of innovation is known as disruptive innovation.
Disruptive innovation tends to be associated with ‘underdog’ entrepreneurs who are not afraid to create and execute the risky ideas that established businesses stay away from.
As a consumer, disruption is great news. It provides a variety of choices which come with cost benefits, improved features, and enhanced efficiency.
However, as an established business, disruption is bad news! Disruption means that I can’t afford to compete in an evolving market. Disruption means that I lose my customers, my income, and my job.
It’s no surprise that taxi drivers around the world are protesting Uber. This online transportation network has disrupted the taxi industry by providing cost and convenience benefits that the standard taxi can’t match.
(Photo source: LinkedIn)
Disruptive Innovation is Inevitable
What most entrepreneurs fail to understand is that the rise of technology makes disruptive innovation inevitable. No amount of protests and tears will stop disruption from taking place.
Yes, there is a huge human cost. We cannot ignore the thousands of people made redundant by innovative products and services like online movie streaming, 3D printers, and cloud software. But what’s the alternative? Forcing outdated products and services on the public in an attempt to prop up unnecessary markets?
When we fail to adapt to the changing tides of business, we only have ourselves to blame. Business has never been and will never be stagnant.
Change should be welcomed and encouraged, even when it puts us in a difficult position.
The truth is, if you don’t adapt to the disruptive market, failure is guaranteed.
How to Adapt in the Face of Disruptive Innovation
Here are two things to keep in mind:
1. We can’t make strategic changes to our businesses on a daily basis.
2. We can’t take full advantage of every opportunity that comes our way.
So where does that leave us? Well, we have to engage with our target customer.
It’s a losing game trying to follow the market; it’s too vast. While you should keep up with industry news, listening to your customers should always be your top priority.
When you listen to them and learn what they like and don’t like (want and don’t want), you can make production, marketing, and execution strategies that benefit them and ultimately you.
When you are on top of your clients desires at all times, you won’t be left scrambling once a new product or services threatens to make you irrelevant. After all, what motive does your customer have to leave you if you are fulfilling their needs?
Take Polaroid for example. The rise of digital photography disrupted the instant photography market, but Polaroid CEO I. MacAllister Booth was adamant that “as electronic imaging becomes more prevalent, there remains a basic human need for a permanent visual record.”
This belief was held by his successor Gary DiCamillo, who placed his faith in hard copy photographs.
Big mistake! Polaroid could have simply listened to their customers and catered to their demand for electronic imaging. They already had an established customer base to sell to. But they refused to adapt to the realities of the photography market and eventually the company went bankrupt.
As you can see, it’s essential for entrepreneurs to learn how to adapt in the face of disruption.
Your market may not yet have witnessed disruptive innovation, but it will happen soon enough. Technology is rapidly evolving and this means that the way we conduct business will evolve. Whether you are in pharmaceuticals or agriculture, innovation is inevitable.
Your only choice is to keep your ear to the ground and employ the most flexible strategies possible. This way when innovation in your market threatens to put you out of business, you can make the necessary changes and come out on top.
If you found this article interesting, share it with your network. Also drop me a comment letting me know of your experience with disruptive innovation. Did an inventive product or service put you out of business? Or did you use innovative technology to further your business? Let me know how you’ve faired.
Thanks for stopping by and I hope you have a great week. See you back next Monday!