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The wheel was an early disruptive technology. How will radical innovations affect your business?
© iStockphoto/mikkelwilliamalxpin
"There is no reason for any individual to have a computer in
his home."
– Ken Olsen, founder, Digital Equipment, 1977.
Disruptive technologies are technical innovations that have the potential to change and restructure whole industries.
They replace existing ways of doing things, and, in the process, create both threats and opportunities for existing organizations.
To manage their impact, you first need to be able to spot them, and then think about how they will affect your industry and your organization. Once you have an idea of this, you can decide if and how you can make them part of your business.
Currently (and among others) we can consider self-driving cars, 3-D printing, and gesture-based computers to be potentially disruptive technologies. They are all gaining customer appeal – albeit initially in niche markets – and all could change key industries forever.
You don't have to look far back through history to find examples of business decision makers who failed to react effectively to disruptive technologies. We've all seen, for example, how the Internet has changed the music, travel, and retail industries.
Many business leaders have blind spots when it comes to recognizing the impact of new technologies. Perhaps they're highly skilled at seeing how mainstream technologies meet their customers' needs, but lack the specialist knowledge needed to assess the impact of a new technology.
They may also have spotted these technologies, but have judged them to be too niche or too risky to be worth bothering with. After all, disruptive technology projects can absorb a lot of money in the short term, and often don't generate much money in their early stages. As a result, they can appear to be high risk, and can often fail to get budget approval, unless they have strong executive support.
In this article, we'll look at a five-step process for identifying and working with disruptive technologies.
Harvard Business School professor Clayton Christensen originally coined the term "disruptive technologies." Later, with his colleague Professor Joseph Bower, he developed a five-step process for assessing and cultivating potentially disruptive technologies. The two professors published the process in the January/February 1995 edition of the Harvard Business Review.
The five steps are as follows:
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Bower, J.L. and Christensen, C.M. (1995) 'Disruptive Technologies: Catching the Wave', Harvard Business Review, January 1995 [online]. (Available here.) [Accessed 17 January 2013.]
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