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.

23,896 Comments

  1. I really love your blog.. Excellent colors & theme. Did you make this website yourself?
    Please reply back as I’m wanting to create my very own website and want to learn where you got this from or
    just what the theme is named. Appreciate it!

  2. Hi, just wanted to say, I loved this article. It was funny.

    Keep on posting!

  4. You’re so cool! I don’t suppose I’ve truly read through anything like
    that before. So great to discover somebody with unique thoughts
    on this issue. Seriously.. many thanks for starting this up.
    This website is one thing that is needed on the web, someone with a little originality!

  5. Good info. Lucky me I recently found your website
    by accident (stumbleupon). I have saved it for later!

  9. Greetings! I know this is kinda off topic but I was wondering if
    you knew where I could get a captcha plugin for my comment form?
    I’m using the same blog platform as yours and I’m having difficulty finding one?
    Thanks a lot!

  10. Hey there just wanted to give you a quick heads up.
    The text in your article seem to be running off the screen in Firefox.
    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 and style look great though!
    Hope you get the issue resolved soon. Cheers

    Also visit my web page: prodentim probiotic candy

  11. What i do not realize is actually how you are now not really a lot
    more well-liked than you might be now. You are so intelligent.

    You already know thus significantly with regards to this matter, made me for my part imagine it from
    so many various angles. Its like women and men aren’t fascinated until it’s something to accomplish with Lady gaga!
    Your personal stuffs nice. All the time handle it up!

  12. I am sure this article has touched all the internet users, its really really nice paragraph on building up new webpage.

  13. 10 Healthy Sofa 2 Seater Fabric Habits fabric sofa 2 seater (Vaughn)

  14. I know this if off topic but I’m looking into starting my
    own weblog and was wondering what all is required to get setup?
    I’m assuming having a blog like yours would cost a pretty penny?
    I’m not very web smart so I’m not 100% certain. Any tips or advice would be greatly appreciated.

    Many thanks

  15. Post writing is also a excitement, if you be familiar with
    afterward you can write otherwise it is complex to write.

    my blog post provadent cvs

  18. See What 1kg Coffee Beans Price Tricks The
    Celebs Are Using 1kg coffee beans price (Frieda)

  19. Good post however I was wondering if you could write a litte more
    on this subject? I’d be very thankful if you could elaborate a little
    bit further. Thank you!

  20. continuously i used to read smaller content which as well clear their motive, and that
    is also happening with this post which I am reading at this time.

  22. After looking at a handful of the blog articles on your blog, I seriously like
    your way of blogging. I bookmarked it to my bookmark site list and will be checking back soon.
    Please visit my website too and tell me your opinion.

  24. Howdy just wanted to give you a quick heads up and let you know
    a few of the pictures aren’t loading properly. I’m not sure why but I think its a
    linking issue. I’ve tried it in two different
    browsers and both show the same results.

  26. Hi! I know this is sort of off-topic however
    I had to ask. Does managing a well-established website such as yours require a large amount
    of work? I’m completely new to blogging however I do write in my journal every day.
    I’d like to start a blog so I can share my own experience
    and views online. Please let me know if you have any ideas or tips for brand new aspiring blog owners.
    Thankyou!

  29. Pretty nice post. I just stumbled upon your weblog and wished to say that I have really enjoyed
    surfing around your blog posts. After all I’ll be
    subscribing to your feed and I hope you write again very soon!

  30. What’s up to every , because I am truly keen of reading
    this website’s post to be updated on a regular basis.
    It carries pleasant data.

  31. Double Glazing Companies Near Me Techniques To Simplify Your Daily Life Double Glazing
    Companies Near Me Trick That Everyone Should Know companies

  34. I like the helpful information you provide for your articles.

    I will bookmark your weblog and take a look at once more right here frequently.
    I am rather sure I will learn plenty of new stuff proper here!
    Best of luck for the following!

    My homepage … what’s in prodentim

  35. Hello to all, how is everything, I think every one is getting
    more from this site, and your views are fastidious
    in favor of new viewers.

    my web blog: testoprime review

  37. Hello! I just wanted to ask if you ever have any trouble with hackers?
    My last blog (wordpress) was hacked and I ended up
    losing months of hard work due to no back up. Do you have any methods to protect against hackers?

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

  41. Introducing to you the most prestigious online entertainment address today. Visit now to experience now!

  42. Great post however , I was wanting to know if you could write a litte
    more on this topic? I’d be very grateful if you could elaborate a little bit further.
    Cheers!

  44. Hi there! This article could not be written any
    better! Looking at this article reminds me of my previous roommate!

    He continually kept preaching about this. I most certainly will send this post to
    him. Pretty sure he’s going to have a good read.
    I appreciate you for sharing!

    Also visit my web page HERPESYL

  45. Heya i’m for the primary time here. I came across this
    board and I find It truly helpful & it helped me out a lot.

    I’m hoping to give something again and help others like
    you aided me.

  49. Introducing to you the most prestigious online entertainment address today. Visit now to experience now!

  50. I am really impressed with your writing skills as well as with the format in your blog.
    Is this a paid theme or did you customize it your self?

    Anyway stay up the excellent quality writing, it’s uncommon to look a nice weblog
    like this one nowadays..

Add a Comment

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