Disruption vs. Innovation: Is there a difference?
In recent years, the term “disruption” has been ubiquitous both in and out of business contexts. You’d be forgiven for dismissing the term as the Silicon Valley jargon equivalent of “innovation”. Despite the increased use of “disruption” and “innovation” interchangeably, these terms have different meanings and consequences for your business. I break down what the difference is between innovation and disruption, and why you need both to future-proof your business.
Innovation: better, faster, cheaper
Innovations are incremental changes that address existing needs. Innovation relies on sustained technological improvements to make existing products and services better, faster, and cheaper for the existing consumer. The banking sector anticipated major disruptions as the world shifted to a digital landscape. And although banking looks very different than it did twenty years ago, the companies themselves have largely remained the same. This is because big banks incorporated new technologies such as online and mobile banking into their existing business models – capitalising on their well-established foothold in the sector to expand their offering and improve their services. Innovation is an essential tool in remaining relevant in the market and staying abreast of consumers’ evolving needs.
Disruption: addressing needs you didn’t know you had
Where innovation creates sustained technology to better address current needs, disruption addresses needs we didn’t know we had. True disruption changes our behaviour and creates entirely new business models and value chains by leapfrogging trends and technologies in a way that is detrimental to the current establishment.
Introduced in 2004, Facebook was not the first social media platform, but it was certainly the most impactful. Without Facebook, there would be no Instagram, Twitter or Snapchat. It revolutionised our behaviour by changing the way we connect, how we think, and how we speak. As of 2018, Facebook has over 2.18 billion active monthly users – none of whom could have predicted that they would one day need this platform to make friends, stay in touch and keep updated with local news. Together with Google, Facebook also disrupted the advertising industry by creating an entirely new value chain. Now a constant companion, personalised online advertising via programmatic strategy would not be possible without the large deposit of data and sophisticated algorithms created by Facebook and Google.
In short, MySpace and Yahoo! were innovative; Facebook and Google are disruptors.
Future-proofing your business
With potentially disruptive businesses starting up every day, how do you protect your business from going the way of Kodak or Blackberry? Motivational speakers may have you believe that you need to “disrupt or be disrupted”. The truth is that as long as you provide customers with what they want, and provide it well, you will remain relevant.
In his TEDx talk The Art of Innovation, Guy Kawasaki, best known for marketing the Macintosh computer line in 1984, remarks that “When you think about your company, don't define yourself in terms of what you already do. Think about the benefits that you provide". When Netflix was first introduced in 1997, it wasn’t immediately disruptive. At the time, it provided mail-order DVD’s which the customer would return via the USA postal service. The process was lengthy and inconvenient when compared to Blockbuster. The service was largely resigned to dedicated movie buffs seeking obscure titles. But with the introduction of a subscription pricing model and the advent of video streaming, Netflix shook up the entire value chain of Hollywood as we know it.
So what set Netflix apart from its once superior competitor, Blockbuster? Netflix heeded Kawasaki’s advice and defined itself in terms of what benefit it provides (accessing movies and series at home) and not by what it does (providing mail-order DVD’s). By redefining its outlook in these terms, Netflix remained flexible enough to innovate its benefits, which ultimately led to true disruption.
Disruption is not infallible
While innovation and disruptive start-ups receive wide acclaim in the media, disruption for disruption’s sake can sometimes lead to failure. Snapchat could easily represent the most disruptive social media platform of the decade – market share among Gen-Zedders continued to grow despite this generation’s general social media usage declining. Facing strong competition from the likes of Instagram, Snapchat introduced a redesign it hoped would be disruptive. Instead, the redesign diminished the benefits that the app once provided, and alienated its celebrity clientele (a key draw for the app) such as Kylie Jenner, Rihanna and Chrissy Teigen. At the time of writing Snapchat’s stock continues to drop – only time will tell if it will recover.
Disruption and innovation have been part of business for as long as business has existed. Whether its innovations that build on what came before or entirely new disruptions that seemingly come out of nowhere, new technology is the backbone of progress. By looking forward and not losing sight of the benefits your business provides, innovation and disruption become part of the business culture.