Leading through Disruptive
Times
I must admit. I did not really understand disruption until
tonight. I thought I did, but trying to
reason through the concepts, the fundamental truth escaped me. I was panicked and completely unsure of how I
would complete this assignment. I found
the missing pieces watching a video where Clayton Christensen (2013) explained disruption
at Said Business School, University of Oxford.
In this video, Christensen labeled innovation into three types with
three different purposes. He tied the
types of innovation into the economy which, indeed, was fascinating. But that
can wait for another blog entry. I now
have the information I need to answer the questions posed by this
assignment. Better late than never I suppose.
There are three types of innovation and they serve three
distinct purposes. Sustaining innovation
is used to make existing products better.
Efficiency innovation makes the same product cheaper. Disruptive innovation transforms complicated
and expensive products currently in the market simpler and more affordable to a
much larger population. When the
disrupter has successfully taken that product and the incumbent no longer
competes for that product the disruption is completed. But the price drops
drastically when the incumbent withdraws. Now the disrupter seeks the smallest
margin product the incumbent offers and begins to disrupt it. It makes sense to everyone. The incumbent can realize greater profit if
they focus their effort on higher margin products, so they gladly get out of
the lower margin business. The disrupter
gladly takes on the business because it generates sound profit. This can continue unnoticed for years for a few
reasons. The incumbent’s quest for greater
profit is successful. Every time the
incumbent got out they made more money. The
disrupter is seeking the low margin products that cost them to keep
anyway. The disruption takes years to
complete and the incumbent simply does not see what is really happening. In this manner the disrupter can take over an
entire market as long as, at each level, they can deliver the product and meet
the standards the incumbent used to provide (Christensen, 2013).
Leading an organization that is focused on disruption would be
different than leading one focused on sustaining, but perhaps less than one
might think. In the sustaining
organization, the people are very familiar with the products and if the
innovation is incremental. most likely the innovation as well. The sustaining organization
would be back to business as usual almost immediately.
The disruptive organization routinely deals with uncertainty
and high-risk activities sustaining organizations may not have to endure. If the disrupting organization has always
focused on disruption they too would be back to business as usual. On the one hand, the leader guides people through
what the next increment will look like for the product and prepares the
organization for upcoming innovations. On
the other hand, the leader must guide people through the process of finding future
disruption and the work to get the project started.
Since innovation of any kind takes so long and the business is
back to normal the leader is responsible for remaining alert to changing
conditions that could affect or upset existing plans, being consistent, being
committed to the plan, and being patient while innovation slowly generates its results.
Now,
consider the likelihood of both occurring at the same time; would this change
the way you navigated or lead the organization through these scenarios?
I think it would be highly unlikely that both would occur
simultaneously. But if it did, I would take
on an even more active role because it could cause manning and expertise shortages. After, getting the dust settled and confidence
returned that things are under control I would withdraw and allow the
organization to run, but I would show up more often than normal to show support
and offer help.
~Pete
Reference:
Christensen, C. (2013). Disruptive innovation [Video file]. Said
Business School, University of Oxford, 2013 June 19. Retrieved from https://www.youtube.com/watch?v=rpkoCZ4vBSI
Mckeown, M. (2014). The innovation book: How to manage ideas
and execution for outstanding results. Edinburgh Gate, Harlow, United Kingdom.
Pearson Education Limited.
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