“Disruptive innovation” (1) isn’t all about Uber, and (2) exemplified by new virtual workforces

Maybe it’s due to my experience within the tech/IT and advertising industries and frequent exposure to entrepreneurs and startups, but over the last few years, I have been inundated by people using “disruptive innovation” to describe many new business ventures, to the point that it has become an annoying and meaningless buzzword that I actively avoid and resent. Whether on “Shark Tank” or at conferences I’ve attended, everyone wants to be a “disruptor” and their pitch tells how they’re “the Uber of industryXXX”.

I’m so pleased to have read this HBR article and to share in what I interpret as frustration by Christensen, Raynor and McDonald over the (mis)use and misunderstanding of “disruptive innovation” as a term and theory.

(1) What is disruptive innovation?

I believe most people have a similar, broad definition in mind: a “disruptive innovation” is a new “game-changing” product or service offering that “disrupts” a market by overtaking established industry leaders, usually in a quick/ surprising manner.

Through this lens, we frequently cite Uber, AirBNB, Netflix as examples. There’s also a shared sense of disruptive innovators as entrepreneurs, scrappy nerds and loners who were overlooked and neglected by traditional corporations and who chose to defy, persevere and prevail in their pursuits.

Like most, this is also what I picture when I hear the term, which is why I liked how the article provided a more academic discussion of the theory of “Disruptive Innovation”. The authors remind us that the theory has evolved and improved as a result of two decades of refinement through research, cases and study, so we shouldn’t hold it to 1995!

Then, they provide two important criteria negating Uber as a good example. “Disruptive innovations originate in low-end or new-market footholds” and they “don’t catch on with mainstream customers until quality catches up.” With these qualifiers, Uber doesn’t qualify and should stop being held as the pillar or reference point for this theory!

(2) Give an example of a disruptive innovation that has affected your industry or another industry that you are familiar with.

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As a recent employee-turned-owner and consultant, I see the growing acceptance and adoption of a virtual, remote workforce as a disruptive innovation.

Where companies traditionally sought out “regular” full-time employees who would work on-site during “normal” business hours, multiple industries (in particular, professional services and consulting) are embracing a virtual workforce either as a replacement or complement to existing teams.

Enabled by increasingly advanced communications technology and platforms, virtual and remote laborers now easily offer their expertise and services on an “any time, anywhere” basis.

Following the points raised in the HBR article, I believe this qualifies as a “Disruptive Innovation” true to the theory. First, it originates in a new market, creating one that didn’t previously exist (most virtual workers are individuals who wouldn’t otherwise hold traditional jobs: stay-at-home parents and caregivers, part-time professionals).

Second, it was initially slow to “catch on” due to concerns of inferior quality, but is now increasingly popular as technology has improved the experience to compete with traditional employment. (Studies now show that their productivity exceeds that of traditional workers.)

References

  1. Christensen, C. M., Raynor, M. E., McDonald, R. (2015). What is disruptive innovation? Harvard Business Review, 93(12), 44-53.
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