Are You Really Ready for Disruptive Innovation?
May 30 2013 by Patrice Murphy and Daniel Dworkin
Are we prepared to ask, not tell?
Leaders must determine their openness to a quest, not a particular destination. Disruptive innovation is not born of a 50-page business plan churned out in a snazzy template. It starts with questions, not answers. The need for a high degree of customer involvement, rapid cycle experimentation and learning, means leaders must be prepared to sanction counter-cultural or even cannibalistic activities. Testing assumptions demands being okay with the possibility that they are, well, wrong. Team members need to ask customers for feedback on rough prototypes – anathema to many executives who want customers to see only perfect product. If the leadership team is not willing to risk failure, disruptive innovation is doomed.
Salesforce.com drives the search process by listening to customers’ direct feedback, collecting data on how they interact with products and services, and observing what they are talking about with one another. In many cases, the engagement approach is passive. Salesforce simply provides a platform for information sharing, resisting the temptation to jump into every conversation in response to different customer insights.
Where will ideas for new business opportunities come from?
The suggestion box is alive and well. The stimulus to start a new business can come from anywhere, including employees inside the company, outsiders demanding to know why a product or process is broken, customers who are expert users of current solutions, and competitors ready to leapfrog into an empty market space.
Salesforce’s “IdeaExchange” is an excellent example of how to effectively crowd-source ideas, and engage buyers and influencers in the innovation process. This homegrown customer community enables not only the sharing of product and service enhancements, but also the ability to like and comment on the ideas of others. Comments that generate considerable likes, builds or questions are valuable stimulus fodder for disruptive ideas.
Some companies also encourage employees to run ideas through a fast-track development process – like Intuit’s 2-day “Lean StartIn” experience that allows teams to brainstorm, test and quickly pivot startup ideas. Others invest huge resources in skunk works to isolate innovators from the corporate mother ship – a better environment to imagine and build a new vision.
Once teams get out of the building, even more ideas emerge for different ways of answering customer pain or gain, sometimes spawning radical solutions disrupting the existing business model. As serial entrepreneur Steve Blank explains, “No new business model survives first contact with the customer.” Netflix CEO Reed Hastings was a customer bummed about a $40 late fee when he imagined a monthly movie subscription model, destroying the brick-and-mortar business of movie rentals, and shifting it to the mailbox and later the Internet.
The trick is accelerating business model evolution in partnership with customers and partners until a viable product or service emerges. Revenue may not be the best way to test concept validity. The leadership team’s role is to spot leading indicators – website hits, contracts signed, orders placed, viral buzz, etc. –pointing to the possibility of a scalable, sustainable and profitable future business.