The world is changing and businesses have to catch up. The question is: do you want to adapt to change or do you want to be a catalyst for change?
The world besteller The Innovator’s Dilemma from 1997 by Harvard professor, cofounder and author Clayton Christensen (coverphoto) is first and foremost a must-read for all those that are involved in innovation.
In his book Christensen describes his theory on disruptive innovation, and places it against the non-disruptive concept of sustaining innovation. According to Clay companies are faced with either two choices: they can make a better product and sell it to their best customers at a higher margin (sustain and move upmarket), or make a product that is worse, doesn’t fit the needs of existing customers and will potentially kill the current margin (disruptive, moving to the bottom of the market). That is in essence the dilemma every company is facing.
Let not confuse sustaining innovation with sustainable innovation. When Christensen wrote his beststeller the word ‘sustainable’ wasn’t commonly used, nor did it refer to the social responsibilty of a business (people-planet-profit). The concept of sustaining innovation points to the prolonging of the lifecycle of a product, valuechain or businessmodel.
Management versus Leadership
Let’s have a closer look a the differences between sustaining and disruptive innovation. The next video is pretty self explanatory:
Sustaining Innovation + Change Management
Christensen uses the term sustaining innovation to describe a process of marginal improvements (to products, processes, distributionchannels, etc.), as a consequence of changes in the marketplace (demand, competition, regulation, etc.). The ROI of this type of innovation is typically 1-2 years. You’ll make your shareholders happy: they love it.
If you plan to choose this incremental form of innovation, ie. sustaining innovation, the best way to move forward is by change management. You’ll need to plan and steadily steer towards a predictable outcome.
Disruptive Innovation + Change Leadership
If you on the other hand you aim at disruptive innovation, you’ll not only need to have a lot of courage, but most of all a clear vision and a rockhard believe. The outcome of the process will be most uncertain, and the ROI might not even occur in the next 3-5 years.
This form of radical innovation requires change leadership: to find support for it, express your vision and lead a process of change. Shareholders hate this kind of innovations.
What is your choice?
It isn’t suprising that change management is what’s most commonly practised. Kodak didn’t want to disrupt the margins on film, even though they invented the digital camera. They lost.
Ask yourself therefor this single question: What kind of innovation do we really need to strive for and are we using the right kind of management/leadership?