My latest post on Forbes, written with Milo Jones, is a reflection on difficulty of transformation by incumbent companies in the face of digital disruption. It’s available here.
We hear a lot about “disruptive technologies”, but what makes an innovation disruptive is not usually its technical dimension, and the distinction often made between radical innovation and incremental innovation is not so pertinent. Indeed, we can observe two examples to illustrate this point.
In the 1970s, the French government decided to help Africa develop. The lack of lighting had long been identified as an obstacle to development: without lighting, for instance, children could not do their homework at night. Thus the French government decided to subsidize the design and manufacturing of light kits. A small solar panel charged its battery in the day in order to be used at night. The tender was launched, a company that designed robust kits won the contract and the kits were sent to Africa to be distributed. But just a few weeks after the operation was launched, it failed. The kits were not used. Why?
This article is the third part of a series of fives articles on mistakes to avoid when managing a disruptive project, extracted from my new book “A Manager’s Guide to Disruptive Innovation”.
The disruption theory can shed new light on the first mover advantage. The first mover advantage theory states that the first entrant in a new market has the advantage of being able to take leadership of the market and effectively resisting the entry of subsequent competitors. This theory forms the conceptual basis of a popular approach known as “blue ocean”.
By advancing the premise that the main factor of competitiveness is the order of arrival on the market, this theory recommends to companies to go as quickly as possible to be the first. However this theory suffers from a major flaw: it is rarely supported by the facts. Many leading players in their field were late entrants, to name just a few: Procter & Gamble with its disposable diapers, Gillette with its disposable razors, Google with its search engines, and Apple with its iPhone.
Posted in innovation
Tagged apple, blue ocean, Casio, disruption, First mover advantage, Gillette, Google, nespresso, Procter & Gamble, Seiko, Swatch
Digital is everywhere. As Marc Andreessen, founder of Netscape, a Web pioneer and now star investor in the Silicon Valley, wrote: “Software is eating the world.” There is no industry today that is not impacted by the digital revolution. How to prepare our executives, current and future, for this revolution? The question is not new but it seems that many mistakes are made in the approaches, including by those who design training programs on the issue. Let’s review four of these mistakes.
This is unfortunately a common experience: during an executive seminar on innovation I ran for a large group, we outlined an innovation strategy based in particular on the development of intrapreneurship. We designed programs that would allow employees to develop their ideas, and defined appropriate structures and devices to make it work. Then finally came the crucial moment, when one of the participants asked the fateful question: “But do we have the people to do this?” Everyone looked appalled. The HR manager – fortunately she was present – answered, embarrassed, “Well actually, no we don’t.” Game over.
One of the characteristics of innovation is to simplify and make more accessible technologies that previously required experts to handle them. Pregnancy tests illustrate this phenomenon: while in the 60s it was necessary to visit a doctor to perform such a test, it can now be performed by buying a $5 kit in a pharmacy. The change for a given technology is therefore translated by two factors: a reduction in costs and simplification. In other words, because the technology becomes cheaper and easier to use, experts are less and less needed for a given problem to solve. Indeed, those pregnancy tests are more and more bought online, thus removing the need for the pharmacist. In 50 years, solving this problem have moved from the doctor to the pharmacist, then from the pharmacist to the user.