What is Disruptive Innovation?
Disruptive innovation is not about having some breakthrough innovation. Disruptive innovation has a very specific definition. It refers to basically redesigning an expensive, inaccessible product to make it affordable and accessible for the masses.
The easiest example is the computer. Mainframes initially cost several million dollars. Only governments and the largest companies could afford them. Then innovation set in. We went from the mainframe to midrange to desktop to smart phone to smart watches and VR goggles. We democratized computers so that now they are available to almost everyone. Often companies are trying to develop ground-breaking, new, better, more expensive products. But disruptive innovation is practically the opposite. It answers the question, “How can we take what we already do and make it cheaper, more accessible, more pervasive, more popular?”
As the saying goes, innovation is 1% inspiration, 99% perspiration. Have you ever had what you thought was a brilliant idea but never did anything about it? Back in the 1990s just after having my two kids, I started playing tennis with neighbors. I had a ‘brilliant idea’ around manufacturing women’s tennis clothes that basically had a girdle in them to flatten my new post-partum shape. (Note: almost 30 years later, I still blame that extra padding on my now-grown kids!) But back then, a friend and I even started looking into materials and manufacturing, but that is as far as the idea went. Honestly, it was just too much work to pursue – I already had two kids, a pretty demanding job, and of course I wanted to have time to actually play a little tennis! Often, too much time is focused on coming up with new great ideas and not enough time is allotted making them happen.
So how do you actually implement a good, disruptive idea?
Every innovation is an experiment. And a lot of them fail. If you find a way to make the experiments cheap but meaningful, you can fund many more experiments, which increases the likelihood of at least one of them being successful.
Lay the Groundwork
But before you even explore a way to come up with the great ideas, I believe there need to be certain values and norms in place. You need to build the groundwork for innovation. Teams need time, space, trust, safety, and a learning mindset to innovate. Why is this?
- Innovation is hard to achieve in organizations that are constantly “fighting fires”.
- Make way for innovation by building an environment of quality. When you inject quality from end-to-end, you spend little time having to correct errors.
- Injecting quality is part of the Agile Manifesto in Agile Principle #9: “Continuous attention to technical excellence and good design enhances agility.” It also enhances the ability to innovate.
- Use Lean Thinking to slim down operations, remove waste, and automate ‘automatable’ tasks so that time is freed up to innovate.
- Leaders need to dedicate time for innovation. In SAFe environments (Scaled Agile Framework), for example, there is time set aside for Innovation and Planning.
- Innovation is hard to achieve in organizations that don’t foster trust and where failure is punished.
- I’m using Patrick Lencioni’s definition of trust from the Five Dysfunctions of a Team: within teams, trust is the confidence that everyone’s intentions are good and that we can be open and honest within the team. We can be vulnerable. We can admit when we are wrong.
- This definition of trust helps teams experiment more easily because they aren’t afraid to fail in front of their teammates. They don’t point fingers; they work together to achieve greater results.
- This all points to other Agile Principles around incremental and iterative delivery of products.
- Innovation is hard to achieve in an organization that doesn’t promote constant learning.
- A learning organization is one which promotes continuous increase in knowledge, expertise, and competence. One which understands the skillset needed to continuously improve and innovate and actively pursues people with those skills. To me, a learning organization is also diverse in both culture and thinking. This diversity keeps us from getting stuck in GroupThink and curbs the idea that “that’s the way we’ve always done it” is a good reason to continue doing it that way.
- Teams need to find ways to learn from each other, share knowledge, and problem-solve together.
Innovate for What? The Benefits
Know Your Customer and Stay Ahead of Their Needs
Whether I love or hate Apple, I must admit it’s an innovative company! Consider these quotes from Steve Jobs: “The people who are crazy enough to think they can change the world are the ones who do,” and, “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”
Successful businesses don’t just respond to the current needs of their customers; they are able to predict and respond to future trends. They come up with an idea, service, or product that can meet the current and future demand quickly and effectively. And if you are already ahead of the curve, you have a better chance of beating out your competition as trends and markets shift.
Employee Satisfaction and Overall Improvement in Culture
Talented people want to work for innovative companies. It’s hard to attract and retain innovative people if you don’t have a culture of innovation. They will be bored. Innovators want to be challenged and need space and time to be creative. You need the culture and reputation of innovation in order to recruit that talent.
The cool thing is that if you can recruit that talent, you become even more innovative, which helps recruit even more talent. It’s like that shampoo commercial from the eighties: and they’ll tell two friends, and so on…
Another benefit is that innovation practically requires collaboration. It brings people together to solve problems, which also leads to better learning within the organization. A culture of collaboration that gives teams space and time to innovate feeds on itself to produce even more innovation. It’s a non-vicious cycle!
Beat Out and Stand Out from Your Competition
Customers will view your innovation as something which makes you more attractive. It can help you stand out commercially and help your product market itself in social media.
In a Deloitte Innovation Survey from 2015, 66% of companies reported that innovation is important for growth. Innovation, when successful, leads to growth, which allows you to hire more innovative people, which leads to more innovation, etc. See where the cycle kicks in again?
Myths and Antipatterns Around Innovation
Before I dive into how to innovate, let’s dispel some myths and some things that might inhibit innovation (antipatterns).
- Innovation comes from the top. Myth. Innovation is a group effort, based on divergent thinking, which I will discuss later.
- Innovations ‘sell themselves’. Myth. Customers do not automatically come to you to buy your innovations. It still takes good marketing and sales work.
- Customers have the answers. Myth. Eric Ries, author of The Lean Startup, says “We must learn what customers really want, not what they say they want or what you think they should want”.
- Innovation is Expensive. Myth. Most world-changing innovations were low-tech. Adding wheels to luggage, for example.
This all sounds great right? You know what innovation is and myths around it. Now, you just need to be innovative. Let’s explore some things to help simplify and target the innovation.
You need to understand that products, businesses, and markets have a life cycle. Continuous improvement helps break this cycle, but where does innovation come into play? Start with Design Thinking.
Design Thinking is a human-centered approach to innovation that balances feasibility, viability, and desirability with user empathy. In its infancy, John Dewey presented us with the idea that science, people, and objects are connected in the 1930s. However, today’s Design Thinking definition probably came from the Stanford School of Design and IDEO (see IDEO’s design thinking method that I will present below): “Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.”
Design-driven companies outperform the S&P 500 by 219%!! But how do you get to be a design-driven company?
At the time when investment for a new solution is needed, there typically aren’t any sales to offset the cost. Things can get expensive quickly if you spend a lot of time (and therefore money) coming up with what you think is the right solution and then building it out to perfection. If you do all this up front, how great is the risk? Will the product even succeed? Let’s break down this upfront work and test it.
Design Thinking is a proven and very structured technique for innovation. It helps us develop innovative products based on customer needs by:
- Reducing cost
- Reducing risk
- Improving efficiency
- Increasing employee engagement
The Double Diamond of Design Thinking
Design thinking’s “double diamond” model shows the divergent and convergent pieces of a design process. It may look a bit linear, but the process is typically incremental and iterative. You don’t have to be perfect the first time. You can create smaller chunks of value, test your hypotheses, and then adjust based on what you learn.
Research and Discover
What problem are you trying to solve? What is the need? Who is the real customer? These are the things you need to understand, discover, research, and explore. What are the real needs and behaviors in order to discover new opportunities and frame the problem to be solved?
Use quantitative and qualitative analysis to investigate. Let’s take Uber Eats as an example (it’s a fairly famous case of the use of Design Thinking). Uber Eats instituted ‘walkabouts’ as a way to understand their customer needs. Their designers observed and talked to restaurant workers, delivery partners, and customers. This is also called “Gemba” (現場, sometimes spelled Genba); it is a Japanese term meaning “the real place.” In business, it refers to going to where the value is created. If you sell merchandise in stores, go to the stores to see how the customers act and react. If you sell software, watch your users use your products. Get their feedback.
You are searching for empathy. Techniques like Personas and Customer Journey Maps are great tools to help really understand your customer and the experience they have with you and your product. Gain an understanding of their experiences, what they want, their frustrations, and their goals.
By looking at things from your customers’ standpoint, you can better understand what needs or challenges they are facing and what kind of solution might work for them. And, once again, they don’t always (or usually!) know what they want or need; you have to use observation techniques to figure it out.
Also endeavor to use divergent thinking at the research and discover phase. The more data you can uncover, the better informed our insights will be.
Define the Problem and Generate Insights
Generate insights based on the findings you learned in the Research and Discover phase. Now that you understand your customer needs, wants, problems, frustrations, and positive interactions, you can combine these findings to generate definitive insights that define the problem and your real strategy (exactly what problem are you trying to solve?).
Look at each step in the customer journey and figure out, what needs to change? What could be better or even eliminated?
There are so many ways to discover what problem you are really trying to solve, but it really comes down to root cause analysis: Symptoms (the “weed”) are obvious / Cause(s) (the “roots”) are not so obvious.
- The 5 Whys: This systematic questioning tool goes beyond the obvious solution to find the real cause of a problem. See our post, The 5 Whys That Can Solve Your Real Problem, for details on how to use this tool.
- Fishbone (or Ishikawa) Diagram: This is another tool to help drill down and find the root cause of a problem. It’s visual design facilitate brainstorming about not only the root cause, but potential solutions to solve the problem. The head of the fish is the problem whose root cause we are trying to discover (usually the symptom is the head). The diagonal lines radiating from the ‘spine’ are the major categories in which the problems can be grouped. The horizontal lines show the next level of detail or causes. Continue this drill-down until all factors are included.
Ideate and Develop
The next phase of design thinking is to ideate solutions for the problems defined in the earlier phases. When possible, the more diverse ideas, the better. Uber Eats involves people from different areas (marketing, sales, technical, customer support) to encourage ideation and creativity from different perspectives and experiences. Uber Eats’s virtual restaurants and pooled deliveries concepts came out of this diverse thinking work. When you broaden the pool of sources for ideas, you naturally get more, better ideas. The graphic below illustrates my point:
Ideation is best done using competition. The goal is to get many ideas from many people. The keys to divergent ideas are:
- Quantity of ideas
- Child-like approach
- Free thinking
- Crazy Eights: Everybody folds a blank sheet of paper in half three times, then unfolds it, so they get eight panels. Then you have 5 minutes total to draw eight sketches, one in each panel. About 40 seconds per sketch, which is crazy… but it’s a great way to crank out variations of ideas quickly. Don’t go for perfection or even pretty. Crazy Eights will also help loosen up your creative muscles and make you more productive in subsequent sketching exercises. If you get stuck, try repeating an earlier sketch with a small variation — this type of exploration is useful and keeps you moving. This is a great video to walk you through this technique.
- SCAMPER: stands for Substitute, Combine, Adapt, Modify, Provide other uses, Eliminate a part or all of it, Reorder. Get all the details on this technique in my SCAMPER Technique – Reduce, Reuse, Recycle… or Reinvent post.
- Telescoping: Once you’ve generated a lot of ideas (without judgement), start to discuss the ideas and their pros and cons as a group so you can target the best solution. This is not just voting; it is a productive discussion meant to gain consensus from everyone on the solution you should pursue.
Build something, maybe using paper or even LEGOs, to validate your idea. Test it and make adjustments. It doesn’t have to be an expensive, fully working model to start testing. You would be surprised at how low-fidelity prototypes will give you just as much information in most cases as a fancy, high-fidelity model.
Use the prototype to get feedback and adjust as needed. Like the shampoo commercial I referenced earlier, “wash, rinse, repeat as necessary”.
Design Thinking is a Powerful Tool
Using it will help you to win over your customers with sustainable solutions and unlock your team’s full creative potential. Answer:
- What does the customer REALLY need (whether they know it or not)?
- Can you fill that need?
- How do you BEST fill that need?
One of my favorite results of Design Thinking is below – what’s yours?