Disruptive innovation was a theory introduced by Harvard Professor Clayton Christensen in 1995. “Disruption” describes a process whereby a smaller company with fewer resources can successfully challenge established incumbent businesses. I consider it very important for business students as well as the industry at large to develop a mindset of innovation that could lead to disruption of current revenue models and systems. I would like to share four themes to create disruptors for an ever-changing business environment.
The first is to study trends. Which new business models are giving way to new ones? A trend, though somewhat futuristic, is actually taking place here and now. The US elections being influenced by Facebook is a good example of how companies can influence and persuade customers through the power of social media. This is a trend that is likely to grow. How digital media is more powerful than print. People are searching for what they want and not compelled to read for the general public. So, how could companies create products for this new age? A good example is Hotjar, a tool that reveals the online behaviour and voice of your users. By combining analysis and sentiment, Hotjar gives you the big picture of how to improve your site’s user experience and performance/conversion rates.
Another trend is the use of artificial intelligence (AI) in your business model. AI and machine learning can use real-time analytics to detect fraudulent transactions. PayPal is using machine learning to fight money laundering. AI is increasingly being used in healthcare. For instance, Medecision developed an algorithm that was able to identify eight variables to predict avoidable hospitalizations in diabetes patients.
The second theme is – study people. Get inspired by entrepreneurs who have created successful novel businesses. Study their backgrounds and understand what led to such breakthrough innovation. Though each person is different, you will discover that entrepreneurs (and innovators) have one trait in common. Oodles of passion and a single-minded focus. You may also notice that you end up reading of more billionaires under the age of 30. This leads me to my next theme.
My third theme is technology – the biggest disruptor of this decade. Seven of the ten largest companies in the world today are technology companies. So, if you want to be a disruptor, and are in a tearing hurry, tech innovation might be your golden key. Technology itself is a vast and growing field, and combining technologies or combining one technology with another field could result in innovation unlike anything you’ve seen before. One cannot get away from new cutting technologies like Big data, AI, Blockchain, IoT, and AR/VR. Just like how we learnt English and Math in school as core subjects, one must embrace, learn and be well-versed un technology to succeed in today’s dynamic digital world.
My fourth and final theme is – be curious. Challenge the status quo. Ask difficult questions. Nobody became a disruptor by focusing on solutions. You need to figure out the problem first. Here’s an example – target customers your company doesn’t want or wouldn’t traditionally think of. These could be customers at the very bottom of the market or even those not in the market. Spend time with them understanding what they need/want. Also, aim for 10X not 10%. If your solutions aren’t radical, throw them out and move on. Get a mentor. Get a team. The more diverse the better.
I end by saying that anyone can be a disruptor. All you need is passion, clarity of thought and courage. Go for it and good luck!
By Mr Nitish Jain – President, S P Jain School of Global Management