The Problem with Disruption
Connecting the classical & colloquial
It won’t have escaped your notice that ‘disruption’ has been the de rigueur term for many people in business, technology and innovation for a while now. The danger of an increased popularity and visibility of such a term is its dilution and misappropriation. As a person seemingly genetically opposed to business-speak and buzzwords, and as Managing Editor of D/SRUPTION, it is especially important to me that we keep a close eye on it.
Talk of disruption and disruptive technology first appeared in a 1995 article by Clayton M. Christensen called, ‘Disruptive Technologies: Catching the wave’. He developed these ideas further in his now well known book, published in 1997, ‘The Innovator’s Dilemma’. Christensen’s theory started the revolution in business thinking that we can call ‘classical’ disruption.
What is disruption?
Disruption is the process that happens when an upstart company with few resources is able to successfully take on an incumbent company, and win. . . It goes a little something like this:
– The incumbent tends to focus its efforts on improving products and services for its most profitable customers. Due to this, it pays less attention to its less profitable customers (or ignores them and other potential new markets entirely).
– As the incumbent business has spent all its effort focusing on its higher value customers, it has ignored the lower value segments, these present an opportunity for the potential upstart disruptor.
– The upstart can become the disruptor of the large company by successfully catering for these ignored or untended groups, providing them with similar products or services to the incumbent, or by answering similar needs and often at a cheaper price.
– The incumbent may not acknowledge or even know about the threat because initially the upstart is just meddling in a small section of its least profitable market. So the upstart may be operating under the radar or written off as piffling, and it often will be – not all upstart businesses go on to succeed let alone be disruptors.
– Notably, the disruptor will often find a way to take people from these less tended segments who aren’t much of a customer for the incumbent (or indeed a customer at all) and turn them into one for themselves.
– Once the upstart has established itself by fulfilling the needs of the people ignored or untended by the incumbent, it will be working hard to grow and expand upwards.
– As a result of this growth, its products and services begin to improve and will start to include more of the qualities and features that the more high value customers of the incumbent company demand or expect.
Ultimately this results in some of those customers shifting from the incumbent to the upstart. Once that number is significant – that is disruption.
Disruption in Christensen’s model has the clear and specific definition that I’ve outlined above. Many uses of ‘disruption’ today are not in keeping with this model at all. It is perhaps due to the availability of the word in everyday speech that there is a significant gap between Christensen’s definition, and the more colloquial uses of the word.
Understandably, like anyone with a good theory, Christensen is keen to preserve his own, and to make sure the terminology used stays tight to his definitions to ensure his theory remains as specific as it is. He has himself expressed regret about choosing the term ‘disruption’ to denote this precise meaning because of this potential confusion – between the specific and the colloquial. Many baulk at putting even a toe outside of Christensen’s definition – but I’ve encountered many more that use the term ‘disruption’ seemingly without any awareness of the theory, perhaps other than in name, at all.
Although it may prickle some, language and terminology will always evolve. Despite the inevitable frustrations, the term has come to mean other things to other people – or more accurately, it continues to mean what it had always meant long before Christensen arrived with his dilemma.
Colloquially, we tend to use ‘disruption’ to describe when an event, system, or process, is interrupted and prevented from continuing or operating in its usual way. It is this definition that many have in mind when they say they, or their businesses, are ‘disruptive’, and there is certainly nothing wrong with that provided we keep in mind the clear distinction between this and Christensen’s model.
Classical vs colloquial – Airbnb vs Uber
You can’t go far into a conversation about disruption these days without someone mentioning Airbnb or Uber. What’s interesting is that by Christensen’s ‘classical’ definition – Uber’s taxi business is not actually disruptive at all (although other aspects of Uber’s wider business may prove to be). Christensen has pointed this out. In terms of his theory, we can see that Uber did not create a new market nor did it begin at the low end of an existing market. Airbnb on the other hand does indeed fulfil the ‘classical’ definition of disruption.
However, in terms of colloquial disruption, both Uber and Airbnb are widely, and rightly, regarded as disruptive for a combination of sheer impact, speed of growth, and the use of technology to radically change the way the world works.
A significant marker for both ‘classical’ and colloquial disruption is that these businesses often appear to come out of nowhere – although this is an illusion – no business or innovation whether disruptive or not comes from nowhere – but often the shock impact and exponential growth will indicate something major has happened, and quickly – and that is usually disruptive in one sense or the other.
Symptom & Cause
If we understand the model as intended, we can also be free to explore other concepts; even if unfortunately they are forced to share the same name. Christensen points out that broadening the definition of disruption in relation to his theory undermines it, and in this he is correct. But, so long as we understand that we are holding two different things in mind that share a name – but not a definition, we are capable of gaining a lot from each.
While acknowledging the theory and definition put forward by Christensen, there are some wider uses of disruption that are also worthy of consideration. Outside of what I’ve named, ‘classical’ disruption, the term has come to signify a range of approaches to business and innovation and often indicates a radical change to traditional ways of working, thinking and doing.
Disruption in a ‘classical’ sense is a symptom of a serious problem that incumbent businesses have experienced due to an upstart, it is retrospective and an indicator that a major shift has occurred from them to the upstart. Disruption in the colloquial sense, that of ‘disruptive thinking’ and ‘disruptive approaches’ is a cause.
Colloquial disruption is an approach, both a fire starter and a rallying cry to create new futures and explore the possibilities, opportunities and hazards. By considering these possibilities we are able to inform strategies and mitigate risks. The exact nature of the future is unknown, but that doesn’t mean we can’t know anything about it.
If we use foresight in an informed and intelligent way, we can identify possible threats and opportunities and use these to our advantage in our businesses. An awareness of the potential threat of disruption in Christensen’s sense, and a disruptive approach to innovation in the colloquial sense can both be essential parts of business planning. While they are certainly not strategies in their own right, the potential threat posed by Christensen’s disruption, and the opportunities opened by colloquailly disruptive approaches can tangibly and helpfully influence how we plan for our future when faced, (as we always are), by a complex world of constant change.
Satisfaction is stagnation
Applying decent futures thinking to a business is a smart move. A business doing well would doubtless like to stabilise and maintain its position but digging ourselves in and holding hard isn’t an option when faced with unavoidable change. It may work for a time but it is not sustainable in the longer term.
Recognising the constant state of flux, exercising foresight, and understanding and incorporating what disruption means in all senses are all prerequisites to putting businesses in the best position to be adaptable in the face of change, and to give the best chance of survival and success.
Merely stating, ‘we are disruptive’ is just not good enough. This thinking must influence planning, strategy, culture and brand as part of an ongoing process if it is to mean anything useful at all; and those that understand disruption both colloquially – (as an approach to be used), and classically – (as an indicator of a threat to be avoided), by far stand to gain the most.