How does a small young company beat an industry giant on it's own turf? A great question to ponder as we begin a BOLD! 2014. Disruptive Innovation could be the answer, says Clayton Christensen the 2013 World’s number one management thinker awarded by Thinker’s 50.
Sustaining innovation as big players tend to do, where they continue servicing and upgrading existing products and services, while trying to stay focused on more profitable higher paying customers, they begin to over serve. They also begin to ignore those customers needing one simple low cost alternative. Here is where the entrepreneurial company can jump in with that basic offer. No bells and whistles rather the disrupter improves their product quickly and therefor can appeal to more people. Therein lays the disruption!
Disruptive Innovation as theorized by Clayton Christensen provides insight to the growth of small businesses in the large business arena. As Christensen’s theory suggests disruption occurs when a small business gains control of a large company’s market.
The more agile and entrepreneurial companies are now focused on targeting the markets that are overlooked by larger companies and providing simpler products and services. Take for example, Toyota and Hyundai, both of these more economic car companies are widely produced in comparison to their luxury vehicle counterparts. In the same light, larger companies have products that are more specialized, creating an environment of constant improvement and expand on these existing products and less room for true innovation. They either can continue expanding and adapting with a smaller shrinking target market or they lower their standard to attract a larger target market and stay competitive.
The BOLD! truth is that successful entrepreneurial companies are selecting to develop low cost solutions to get the job done and attract more of the population that can afford their products. As these companies are growing in innovation and creativity, the goal seems to be, not one to compete but rather to find unique and disruptive solutions while perfectly positioning themselves as the only option to a target audiences problem.
Meanwhile, those giants are not so slow to take on new ways and begin fostering innovation in a different and sometimes successful manner. Specific examples include:
- Launching their own disruptive innovations
- To succeed they treat the project as a separate unit, with a different business model and growth expectations.
- Ask what job customers need done
- Segment customers by job, not by product market size or demographics
This article seems quite timely here at BOLD! as in many ways we can relate to the unique opportunities available. As disrupters and innovators ourselves, we can appreciate agility, flexibility and that a Minimal Viable Product as being necessary to both our clients and our own products, platforms and services! While the processes and example of larger companies can also provide consistency, care and quality.
In conclusion, we believe that there might be lessons learned from both sides and we are thrilled to be positioned well to choose the best of both the startup communities and the fortune 1000 companies we serve! What plans have you established to ensure your company is innovating, disrupting, growing in 2014? Comment below as we are always interested in continuing these BOLD! conversations on all things: Technology, Education, Community (TeC!)