Disruptive Innovation

Dr. Adam Tacy PhD, MBA avatar
What we’re thinking

Disruptive innovation is an often misused/misunderstood term in relation to how Christensen originally defined it. For example, Uber is disruptive in the sense of the English definition, but it is not a disruptive innovation in Christensen’s sense.

Editing / writing from here

The progress economy allows us to explain and explore disruptive innovation, and the related innovator’s dilemma through progress sought and progress offered.

  • Every seeker is seeking to make progress in various aspects of their lives
  • All Seekers’ progress sought becomes more demanding over time, influenced by experience from progress attempts they make (both in your, and other, markets and industries)
  • We can segment the market by progress sought, simplistically as: most demanding, mainstream, and least demanding
  • Incumbent helpers innovate to meet changing progress sought
  • They like to chase after more demanding seekers where they see higher service exchange

By chasing more demanding progress seekers the progress offered over meets the progress sought by other segments. And there are related increases n the progress hurdles; notably the equitable exchange hurdle.

At some point in time a new technology arrives and new entrants harness that in their offerings. Initially those propositions only help least demanding customers progress…they are sufficient enough for them, and at a lower equitable exchange than incumbents.

These new entrants also follow the path of innovating to offer to help make better/more progress. If the mainstream progress seekers switch to the entrant, then the market has been disrupted.

Uber then is not a new technology or markedly cheaper than existing taxis. So it is not a disruptive innovation. What it does address is aspects of non-functional progress (ease of use, better travelling experience etc), so is more akin to blue ocean thinking despite not technically creating a blue ocean.

Editing / writing from here

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