One of the hallmarks of disruptive technologies is that initially they underperf
ID: 414877 • Letter: O
Question
One of the hallmarks of disruptive technologies is that initially they underperform the current technology on the attributes that matter most to mainstream customers. Can you think of any markets that are emerging today based on attributes or qualities that seemed unimportant to the mainstream markets when they were introduced? What older, mainstream products or companies are threatened? What are the corporate factors that lead mid-level employees to ignore or kill disruptive technologies? Should well-managed companies change these practices and policies? Professor Christensen argues that “disruptive technology should be framed as a marketing challenge, not a technological one.” As a manager, how do you decide when a technology—or idea—needs more development and when it's time to aggressively put it on the market?”
Explanation / Answer
Disruptive technology is something which has decided the future of many unicorns (successful start ups) in the last few years. What it means is simple - a company/organization introduces something which totally "disrupts", or challenges the status quo for a particular product or a service in the market. It brings in something which the customer never thought was needed/possible. It brings an angle to solving a problem which no one every thought of.
Let me give you an example - Uber. We are all used to hailing taxis, right? Earlier, we probably used to do it by raising our hands and whistling or calling out to a cab that we see on the road. Or, we used to call up our friendly neighbourhood cab service and wait for the cab to arrive. No one every thought that we could have a technology which could make it easier for both driver and customer by using location data. Uber did it. This is called disruption.
The technology behind hailing cabs today is completely different, no body every thought the smartphone could be the ubiquitous device behind getting a ride anytime, anywhere. This means older, mainstream companies which used to use conventional methods are now obsolete/going to get killed.
The corporate factors which led to conventional organizations killing disruptive technologies is simply governance and processes that slow things down. The reason why start ups succeed is because they get things done fast. In conventional organizations, you have a lot of bureaucracy and approvals to get, which itself kills the innovation process.
Hence, yes, well managed companies should make it much faster and also duly reward employees to continuously innovate. They should introduce an intrapreneurship kind of a culture within the organization.
As a manager, I would decide if a technology is worthy of putting into the market after multiple tests. First, I would like to see a Proof Of Concept. Next, I would like to do live testing with a sample set of customers covering all business scenarios - this would be my pilot. If this is successful, I would like to roll it out immediately into the market (time is crucial!)
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