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Disruptive Innovation: Moving at the Speed of People

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More-with-less is our mantra for innovation. But these three simple words are
dangerous because they push us almost exclusively toward efficiency.
On the surface, efficiency innovations sound good, and they
can be, but more often than not efficiency innovations are about less and
fewer. When you create a new technology that does more and costs less the cost
reduction comes from fewer hours by fewer people. And if the cash created by
the efficiency finances more efficiency, there are fewer jobs. When you create
an innovative process that enables a move from machining to forming, hard
tooling and molding machines reduce cost by reducing labor hours. And if
the profits fund more efficiency, there are fewer jobs.
When you create an innovative new material that does things
better and costs less, the reduced costs come from fewer labor hours to process
the material. And if more efficiency is funded, there are less people with
jobs. (The cost reduction could also come from lower cost natural resources,
but their costs are low partly because digging them up is done with fewer labor
hours, or more efficiently.)
But more-with-less and the resulting efficiency improvements
are helpful when their profits are used to fund disruptive innovation. With disruptive innovation the keywords are still
less and fewer, but instead of less cost, the product's output is less; and
instead of fewer labor hours, the product does fewer things and satisfies fewer
It takes courage to run innovation projects that create
products that do less, but that's what has to happen. When disruptive
technologies are young they don't perform as well as established technologies,
but they come with hidden benefits that ultimately spawn new markets, and
that's what makes them special. But in order to see these translucent benefits
you must have confidence in yourself, openness, and a deep personal desire to
make a difference. But that's not enough because disruptive innovations
threaten the very thing that made you successful ' the products you sell today
and the people that made it happen. And that gets to the fundamental difference
between efficiency innovations and disruptive innovations.
Efficiency innovations are about doing the familiar in a
better way ' same basic stuff, similar product functionality, and sold the same
way to the same people. Disruptive innovations are about doing less than
before, doing it with a less favorable cost signature, and doing it for
different (and far fewer) people. Where efficiency innovation is familiar,
disruptive innovation is contradictory. And this difference sets the pace of
the two innovations. Where efficiency innovation is governed by the speed of
the technology, disruptive innovation is governed by the speed of people.
With efficiency innovations, when the technology is ready it
jumps into the product and the product jumps into the market. With disruptive
innovations, when the technology is ready it goes nowhere because people don't
think it's ready ' it doesn't do enough. With efficiency innovations, the new
technology serves existing customers so it launches; with disruptive,
technology readiness is insufficient because people see no existing market and
no existing customers so they make it languish in the corner. With efficiency,
it launches when ready because margins are better than before; with disruptive,
it's blocked because people don't see how the new technology will ultimately
mature to overtake and replace the tired mainstream products (or maybe because
they do.)
Done poorly efficiency innovation is a race to the bottom;
done well it funds disruptive innovation and the race to the top. When
coordinated the two play together nicely, but they are altogether different.
One is about doing the familiar in a more efficient way, and the other is about
disrupting and displacing the very thing (and people) that made you successful.
Most importantly, efficiency innovation moves at the speed
of technology while disruptive innovation moves at the speed of people.
This post was brought you by InnovationExcellence,
the online home of the global innovation community, building a growing network
with thousands of members from over 175 countries ' thought leaders,
executives, practitioners, consultants, vendors, and academia representing all
sectors and industries. Its mission is to enhance innovation by providing a
forum for connection and conversation across this community.
Like this topic?
Attend BEI Back End of Innovation 2013 with InnovationExcellence in Santa
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About the Author: Mike
Shipulski brings together people, culture, and tools to change engineering behavior. 
He writes daily on Twitter as @MikeShipulski and weekly on his
blog Shipulski On Design.

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