Many people may consider that they are familiar with the term disruptive Innovation. Before attempting to discuss this topic, it would be prudent to first define what is innovation.

Definition of Innovation

The process of translating an idea or invention into either goods/products or services that creates value or for which customers will pay. Here customers can either be external customers or internal customers for example the ICT team can come up with an innovation which allows finance – accounts payable department process payments faster and efficiently reducing the number of people and time spent in processing.

To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.


Definition Disruptive innovation
Disruptive innovation, a term of art coined by Clayton Christensen, who describes it as a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors

This definition is what derives The theory of disruptive innovation which if applied by an organization, will reduce/eliminate complicated, expensive products and services with simplier and affordable ones.

The Theory of Disruptive innovation demonstrates that thre are actually two different trajectories of performance improvement in every market.

Trajectory one – Sustaining Innovation
This is the trajectory of continual improvement of a product or service that is introduced by companies over time. Although these innovations can be either small and incremental or dramtic breakthroughs they tend to sustain the existing trajectory of performance improvement. Sustaining innovation results in better products that can be sold for higher profits to the best customers.

Trajectory two – Disruptive Innovation
The trajectory of disruptive innovation is made possible because innovation gets started through two types of markets that incumbents overlooks

Low-end footholds
This exists because incumbents typically try to provide their most profitable and demanding customers with ever improving products and services, and they pay less attention to less demanding customers. This opens the door to a disrupter focused(at first) on providing those low-end customers with a “good enough” product.

new-market footholds
This is where a disrupter creats a market where none existed ie they find a way to turn nonconsumers into customers.


Impact of Disruptive Innovation on Value
With disruptive innovation, upstart companies, in an effort to deliver more affordable and accessible solutions are maode to away once dominant firts with alarming regularity, often before the incumbents and their leaders realize that their days are numbered.

Disruptive Technologies And Business-Model Innovations
The starting point of a successful business model is its value proposition: a product or service that helps customers get a job done more effectively, conveniently, and affordably. The role of the managers in this process to bring together a set of resources (people, suppliers, intellectual property – IP, equipment, budget) required to deliver the value proposition. As employees and other resources repeatedly work together to generate the product, processes emerge and become ingrained in the business model. Finally, a profit formula materializes, which defines the pricing, mark-ups, gross and net profit margins, asset turns, and volumes necessary to profitably cover the costs of the resources and processes that are required to deliver the value proposition. Over time, an established business model begins to determine the types of value propositions an organization can and cannot deliver. In other words, once the pieces of a business model have coalesced to deliver a particular value proposition, the causality of events begins to work in reverse—only value propositions that fit the existing resources,processes, and profit formula of the organization can be successfully taken to market

A Typology Of Business Models
In general, business models can be categorized into three types: solution shops, value-adding process businesses, and facilitated user networks.

Solution shops
Solution shops are institutions built to diagnose and solve unstructured problems. Consulting firms, advertising agencies, research and development organizations, and many law firms employ this type of business model. These solution shops deliver value primarily through the people they employ—experts who draw upon their intuition and problem-solving skills to diagnose the cause of complicated problems and recommend solutions—and successful firms are those that can attract the best talent. Solutionshop work tends to be unique for each customer, who is often quite willing to pay very high prices in return.

Value-adding process businesses
These businesses transform inputs of resources, such as people, equipment, raw materials, energy, and capital, into outputs of greater value. The business model is built to do this in repetitive ways so that the organization’s capabilities are embedded more in its processes than in its resources. Although some value-adding process businesses may be more efficient than others, as a whole they focus their attention on process excellence that can deliver high-quality services and products consistently at a lower cost, and they are less affected than other types of businesses are by the variability that occurs when outcomes depend on people’s intuition. Often, results can be guaranteed or redone free of charge. Retailing, restaurants, automobile manufacturing, and petroleum refining are examples of this type of business model.

Facilitated user networks.
User networks are enterprises in which the same people buy and sell and deliver and receive things to and from each other. In these types of businesses, the companies that deliver value and make money are those that facilitate the effective operation of the network and its user transactions. Mutual insurance companies are usernetwork businesses—customers deposit their insurance premiums into a collective pool, and they take claims out of it. Telecommunications companies, which facilitate calls and data transfers among their customers,as well as the online auction site eBay, stock exchanges, and many activities of banks are also user-network businesses.

Conclusion
When moving towards the Disruptive Innovation in an organization, the appropriate solution is to encourage the development of disruptive business models that can assume a greater share of the workload. By coupling technological advances with appropriately matched business models, disruptive innovation can bring about affordability and accessibility to industries ranging from steel making to personal finance. It is also worth pointing out that some organizations have achieved Distruptive innovation through Lean Six Sigma. Lean Six sigma has been the key driver for performance improvement for many companies, including more than 50 percent of the Fortune 500 companies. One CEO from a Fortune 500 copmany pointed out that his company used tactical innovation within the DMAIC methodology to generate the savings needed to fund the strategic or disruptive innovation that was launched at the corporate level.

16,975 Comments

  1. Howdy! I simply wish to give a huge thumbs up for the good information you have here on this post. I will be coming back to your weblog for extra soon.

  2. Hi there, I enjoy reading all of your post. I wanted to write a little comment to support you.

  5. Pretty element of content. I simply stumbled upon your website and in accession capital to claim that I acquire in fact loved account your weblog
    posts. Any way I’ll be subscribing on your feeds and even I success you access consistently fast.

    My site :: Czech names

  6. Greetings! This is my 1st comment here so I just wanted to give a quick shout out and tell you
    I genuinely enjoy reading through your posts.
    Can you recommend any other blogs/websites/forums that go over the same topics?

    Thanks for your time!

  7. Saigon Cable

    DISRUPTIVE INNOVATION- Technological advances through business models – Thomas Gachie

  8. Привет, друзья! Приятно быть частью этого сообщества.
    Я являюсь менеджером на сайте, который ориентирован на торговле планкена.
    У нас есть отличный планкен, который прекрасно подойдет для любого
    строительства. В нашей коллекции вы найдете
    большой ассортимент планкена, включая прямой планкен.
    Мы обещаем, что наши клиенты будут довольны качеством нашего продукта.
    Спасибо за ваше внимание. Если у вас есть вопросы, я готов ответить.

  9. Паркур – это направление спорта, которое становится
    все более популярным среди подростков и
    молодежи. Это не просто движение,
    а целый стиль жизни. В настоящее время в каждом
    городе есть несколько школ, мы ждем вас
    школа паркура москва для детей в Москве мы являемся одной
    из лучших. Давайте разберемся,
    что представляет из себя паркур:
    какие виды этого спорта существуют и
    какие из них наиболее популярны
    в России.
    Что такое паркур?
    Паркур (от французского «parcour» – бег) – это не только движение, но и искусство.
    Впервые это направление появилось в конце 20-го века в Париже.
    Французские и американские уличные танцоры использовали
    в своей практике элементы борьбы, акробатики и
    прыжков через препятствия. Годом рождения этого спортивного направления считается 1987, когда
    француз Давид Бель основал команду Yamakasi.

    Паркур начали использовать в качестве средства для преодоления препятствий и самозащиты, а затем – и для развлечения.

    Сначала занимались одиночки,
    пытаясь преодолеть препятствия,
    но по мере развития направления оно стало
    коллективным, и появились новые участники.
    Ребята стали передвигаться группами.
    Первые соревнования по паркуру
    прошли в Париже в 2007 году, а через год был открыт первый официальный клуб паркура.

    Сегодня паркур – это вид спорта, который
    включает в себя искусство преодоления препятствий,
    выживания и общения. В этом направлении
    спорта присутствуют элементы единоборств и спортивной
    гимнастики. Поэтапно паркур стал популярным, и мы делаем все возможное для его развития в Москве.

  10. Howdy! This article couldn’t be written much better! Looking through this post reminds me of my previous roommate! He constantly kept preaching about this. I will send this post to him. Fairly certain he’ll have a great read. Thank you for sharing!

  11. Please let me know if you’re looking for a writer for your
    weblog. You have some really good posts and
    I think I would be a good asset. If you ever want to take some of the
    load off, I’d absolutely love to write some articles for your blog in exchange for a
    link back to mine. Please blast me an e-mail
    if interested. Kudos!

  13. Your means of telling the whole thing in this article is actually fastidious, every one be capable of simply understand it, Thanks a
    lot.

  14. Very soon this site will be famous among all blogging and site-building people, due to it’s fastidious content

  15. Thanks for your submission. I would love to remark that the first thing you will need to complete is determine if you really need repairing credit. To do that you will need to get your hands on a duplicate of your credit history. That should never be difficult, ever since the government makes it necessary that you are allowed to receive one no cost copy of your credit report per year. You just have to request that from the right individuals. You can either read the website for that Federal Trade Commission or contact one of the main credit agencies immediately.

  16. Thanks for your article. One other thing is the fact that individual American states have their particular laws of which affect property owners, which makes it very difficult for the the legislature to come up with the latest set of rules concerning property foreclosures on homeowners. The problem is that each state features own regulations which may work in a damaging manner in relation to foreclosure plans.

  18. You really make it seem so easy along with your presentation but I
    in finding this matter to be really one thing that I think
    I might never understand. It seems too complicated and extremely vast for me.

    I’m looking ahead on your next put up, I’ll attempt to get the hold of it!

  19. I like the valuable information you provide in your
    articles. I will bookmark your weblog and check again here regularly.
    I am quite certain I’ll learn many new stuff right here! Good luck for
    the next!

  20. Great delivery. Outstanding arguments. Keep up the good spirit.

    Also visit my blog post … mint

  22. We stumbled over here coming from a different website and thought I may as well check things out.
    I like what I see so now i am following you. Look forward to exploring your web
    page yet again.

    My site :: euro

  24. I am extremely inspired along with your writing abilities and also with the layout for your
    blog. Is this a paid subject or did you modify it yourself?
    Anyway stay up the excellent high quality writing, it’s rare to look a
    nice blog like this one nowadays..

    My webpage: gold bullions

  25. Excellent post. I was checking continuously this blog and I’m impressed!
    Very useful info particularly the last part 🙂 I care
    for such info much. I was looking for this particular information for a very long
    time. Thank you and good luck.

  26. Normally I do not read post on blogs, but I wish to say that this write-up
    very compelled me to check out and do it! Your writing taste
    has been amazed me. Thanks, quite great post.

    my web page silver medals

  27. You actually make it seem so easy with your presentation but I
    find this matter to be actually something that I think I would never understand.
    It seems too complicated and very broad for me. I am looking forward for your next post, I’ll try to get the
    hang of it!

  28. Howdy just wanted to give you a quick heads up. The
    words in your post seem to be running off the screen in Internet explorer.
    I’m not sure if this is a format issue or something to do with web browser compatibility but I thought I’d post to let you know.
    The design look great though! Hope you get the issue
    fixed soon. Thanks

  29. Pretty section of content. I just stumbled upon your
    site and in accession capital to say that I get in fact
    loved account your weblog posts. Any way I will be subscribing for your feeds or even I success you get right of entry to constantly rapidly.

  30. If you are going for most excellent contents like I do, only go to see this
    web page every day because it presents quality contents, thanks

  31. It’s remarkable designed for me to have a web page, which is valuable in favor of my
    experience. thanks admin

    Here is my web blog – medals

  32. I am regular visitor, how are you everybody?
    This article posted at this web page is genuinely fastidious.

    Visit my webpage :: medals

  33. Hi there, all is going sound here and ofcourse every one is sharing data, that’s in fact fine,
    keep up writing.

    my web site: Czech names

  34. Terrific work! That is the kind of info that are supposed
    to be shared around the internet. Shame on the seek engines for no longer positioning this submit upper!
    Come on over and visit my website . Thank you =)

    My site … Moravia coin

  35. Thanks for finally talking about > DISRUPTIVE INNOVATION- Technological
    advances through business models – Thomas
    Gachie < Liked it!

  36. Do you have a spam issue on this blog; I also am a blogger, and I was curious about your situation; we have created some nice procedures and we are
    looking to trade techniques with other folks, why not
    shoot me an e-mail if interested.

  38. This is the right website for anyone who wishes to find out about this topic.

    You understand a whole lot its almost hard to argue with you (not that I actually would want to…HaHa).
    You certainly put a fresh spin on a subject that has been discussed for years.
    Excellent stuff, just excellent!

    Visit my blog post; euro

  39. I like the helpful info you provide in your articles.

    I’ll bookmark your weblog and check again here frequently.
    I’m quite certain I will learn a lot of new stuff right here!
    Good luck for the next!

  40. Link exchange is nothing else but it is just placing the other person’s
    weblog link on your page at proper place and other person will also
    do similar for you.

  41. Hey There. I found your blog using msn. This is a really well written article.

    I will make sure to bookmark it and come back to read more of your useful info.
    Thanks for the post. I will definitely return.

    my web blog coin auctions

  42. Wow, that’s what I was seeking for, what a stuff!
    present here at this blog, thanks admin of this web site.

    Feel free to surf to my homepage … Ancient coin

  43. Hey there! Quick question that’s totally off topic.
    Do you know how to make your site mobile friendly?
    My web site looks weird when browsing from my iphone4.
    I’m trying to find a template or plugin that might be able to
    fix this issue. If you have any suggestions, please share.
    With thanks!

  45. Great post. I was checking constantly this blog and I am impressed!
    Extremely useful info specifically the last part 🙂 I care for such info much.
    I was looking for this certain information for a long time.
    Thank you and good luck.

  46. I must thank you for the efforts you have put in penning this blog.
    I’m hoping to view the same high-grade content by you later on as well.
    In truth, your creative writing abilities has inspired me to get my very own website
    now 😉

  47. With havin so much content and articles do you ever run into any problems of plagorism or copyright infringement?
    My site has a lot of unique content I’ve either written myself or outsourced but
    it appears a lot of it is popping it up all over the web without my
    permission. Do you know any methods to help reduce content from being ripped off?
    I’d truly appreciate it.

  49. Thank you, I’ve recently been searching for information approximately this subject for a while and yours is the greatest I’ve found out so far. But, what concerning the bottom line? Are you sure about the source?

Add a Comment

Your email address will not be published. Required fields are marked *