Self-Disruption: A strategy company can adopt to avoid Disruptive Innovation and Big Bang Disruption
Innovation is a change and improvement over the existing technology. Our curiosity of doing something new leads to innovation and it is the key to all the technological advancement we have been experiencing today since the Stone Age. As a consumer we always embrace innovation because it brings simplicity and advancements, but as a company, we perceive innovation as threat and name it disruptive innovation or big bang disruption if it take over the existing market. We should not expect innovation to be stationary.
In fact, innovation is a cycle just like nature. It destructs the old, create the new and the cycle continues. This is why most of the companies who were once in fortune 500 don’t even exist today. Why IT and Tech companies are prone to such disruptions? Because business environment is highly ambiguous, everyone is trying to innovate something that will eventually lead to either disruptive innovation or big bang disruption. The main difference in these two are that disruptive innovation gives some time to company for either acquisition or adoption but big bang disruption is uncertain and abrupt.
Current strategy adopted by companies for innovation is not able to sustain these disruptions. Companies are investing their time in augmenting and digitalizing different aspects of the existing product. But for true innovation companies must adopt strategy of self-disruption. It is a concept of becoming your own competitor. Instead of waiting for any other Internet company to take down Netflix’s business, it self-destruct its DVD rental service by adopting on demand streaming model. Amazon self-disrupted its physical book business by introducing the Kindle, but profit is still in Amazon’s pocket.
Self-disruption can be explained as launching an innovative product that disrupts company’s own existing product. Apple, Google, Microsoft and other giant IT companies also use the same strategy to rule out any possibility of outside innovation taking down their market. Google also created Google Plus by disrupting Orkut, instead of augmenting it. Thus self-disruption not only avoids the threat of disruptive innovation and big bang disruption, but also maintains the continuous cycle of innovation within the company.
Self-disruption can be combined with strategies like acquisition and adoption, which are mainly used by companies to sustain disruptive innovation. Take Facebook as an example. It acquired WhatsApp and Instagram because they were affecting market dominance of Facebook over social media. But after acquisition it did not integrate them to Facebook. They are running as an independent service and might distract customers from Facebook, but the overall revenue will remain the same. Keeping them standalone will also give competition to services like them.
A company must perform iterations to its products and services in every section of market adoption, but it should start seeking opportunity continuously for self-disruption when adoption reaches late majority section regardless of the profit it is making. If company will not self-disrupt, other company will disrupt them. Netflix used self-disruption for innovation even when it was successful and making profit. Companies should focus on every aspect of product or service innovation. This includes transformation or integration in different platform, changing the business and revenue model, changing technology or any other possibilities. But self-disruption may be critical, as risk is always there with it like in any innovation.
While seeking opportunity for self-disruption, a company should keep an eye on market activities and their capabilities. They must be able to predict how any new technology can affect their existing product. Companies should not immediately discontinue disrupted product, they should wait for majority to adopt the new product. Like Amazon did not discontinue selling physical books after introducing Kindle and Apple did not discontinue its iPod even all its feature are present in the iPhone. Once a innovation gets established and adopted by the majority, the innovation cycle needs to be continued.