Harvard Business School professor, Clayton Christensen, is
credited with coining the term "Disruptive Innovation". It's
an innovation that is originally birthed at the bottom of the market, usually
as a substandard product, but moves rapidly up-market, eventually overtaking
and obliterating the established competitors.
Think of it this way: a manufacturer of camera film finds out
about a competitor who has a new digital photo development process (requiring
no film, just some sort of digital media). This large film manufacturer
investigates the new technology, but finds it an absurd investment: the
equipment to manufactur is extraordinarily expensive; the digital cameras are
outrageously priced; and the photo quality is laughable. All in all, a
distinct step down from the relatively high picture quality and reasonable
price of their current film products. And, frankly, it makes no sense
to spend a great deal of money to invest in a product that's a step down in
every way from your current product, right?
You tell me; should our hypothetical film manufacturer have made a
complete strategy shift, and embraced this new digital technology, even
though it was substandard? In hindsight the answer is painfully
obvious; and if our hypothetical manufacturer failed to embrace digital
photography, he's likely out of business today. Think of disruptive
innovation as something that seems substandard in every way, but comes from
nowhere and, over time, takes over the staid, tried and true methods and
products, turning entire industries on their proverbial ears.
Now consider with me, for a moment, a management innovation--like
Self-Management. It's a revolutionary way of organizing that can bring
enormous benefit to the organization that embraces it. But imagine a
large organization, with detailed organization charts, chains of command and
reporting structures. To a leader in that organization, moving to a
structure with no hierarchy, no rigid chains of command and fluid job
descriptions, must feel like taking something that is neat and organized and
making it messy, murky and difficult to manage. To that leader,
embracing Self-Management isn't a sound strategic course of
action.
But place this organizationl tool in the hands of an
entrepreneurial firm, an innovative company eager to embrace any meaningful
competitive advantage and they'll trade rigid chains of command, multi-page
organizational charts, multiple layers of management, and bureaucracy for
something difficult to describe in a picture, with a complex network of
bidirectional reporting relationships, but which makes for a lean group of
colleagues who can execute in a blink of an eye. And our
entrepreneurial firm will overtake the professionally managed organization,
all else held equal, by the strength, flexibility and power of their
organizational model.
That's disruptive management innovation.
