Disruptive Vs. Nondisruptive Creation: No Business Exists In Isolation

When bees travel from flower to flower to collect pollen, their mission is to make honey. Yet in the process, as we know, pollen sticks to their spindly little legs and is dusted on other flowers as they buzz about, allowing yet more flowers to bloom and grow. Buckminster Fuller, a celebrated American systems theorist, called this the “precessional effect.”

No business or organization exists in isolation. Innovation and growth trigger precessional effects—or, in economic terms, secondary effects—on third parties. So, it is with both disruptive and nondisruptive creation. Both have precessional or secondary effects on their ecosystems or value networks, and these effects can loom large.

Amazon’s disruption of booksellers and retail, for example, led to growth in the ecosystem of package delivery as Amazon partners with hundreds of third-party courier companies nationwide that hire and manage their own fleets of trucks and vans to handle the company’s last-mile-delivery needs.

There’s also Amazon’s secondary effect on the packaging materials industry, with so many goods, once purchased in stores, now packed individually by Amazon and mailed directly to people’s homes. While Amazon knocked off thousands of booksellers and retailers, it has also had a secondary impact on growth by forcing still-standing players to rethink and improve their operations and by spurring innovation in others. The same can be said of nondisruptive creation. Think, for example, of the secondary effects on outside companies—ranging from aerospace technology to robotics, AI and astrophysics—that Space Force’s nondisruptive move is likely to trigger. It will probably also spur space-related private companies’ innovation, along with efficiency in design, manufacturing and operations.

But here there is a difference worth noting. Amazon’s secondary impacts on the ecosystems of packaging materials and package delivery come in conjunction with the decline in retail real estate values that Amazon indirectly triggered. That’s because ancillary industries attached to a disrupted industry tend to experience disruptive effects as well (as retail real estate has), while the disrupter’s new business model bolsters the growth of third parties (such as package delivery and packaging businesses) in its new ecosystem.

As a result, a net indirect impact, either positive or negative, is to be expected since few industries stand alone without supporting business ecosystems.

When it comes to nondisruptive creation, however, the secondary impacts are more akin to Buckminster Fuller’s precessional effect of bees, because nondisruptive creation tends to have primarily positive indirect effects and few if any third-party losers. That’s because few if any ancillary industry players or existing ecosystems would be displaced under nondisruptive creation. So whatever secondary impact it has on growth and jobs will tend to be positive from the start.

Whether the long-run positive impacts of disruptive creation on growth and employment are greater or lesser than those of nondisruptive creation depends on a host of factors, such as the nature of the innovation, its effect on people’s way of life over time, and the trajectory of industrial development. Hence it is nearly impossible to assess the impacts of disruptive and nondisruptive creations in relative terms. We do know, however, that social costs can be expected in at least the initial period of disruptive creation, whereas such costs tend to be largely absent with nondisruptive creation.

Driven by Hope or Fear?

Have you ever noticed how much in business is about aggression and fear? We all dislike such behavior and emotion, because they fill us with anxiety and make us feel that we are under threat and may be marginalized or destroyed if we don’t strike first. It’s a scarcity-based view of the world. While the world needs less of that behavior and that emotion, we have been conditioned to pursue them to achieve success and even to better the world.

What if we could instead shift our frame of thinking from fear to hope, from a scarcity-based mindset to one of abundance? Thinking that we can create and grow without disrupting or destroying others stands on the ground of hope that creation can be positive-sum rather than a destructive, fear-based win-lose game. It’s an abundance-based view of the world that nondisruptive creation’s distinctive role in creating brand-new markets outside existing industries allows us to start moving toward.

Nevertheless, we all know that in reality, fear and hope are equally compelling motivators for making people act and getting things done. Fear invoked by a competitive challenge or a threat like “disrupt or die” is a strong motivator for an organization to act. However, the hope of making a positive-sum contribution to both business and society is an equally strong mobilizer. So it’s fair to say that nondisruptive creation is based on a view of the world that is complementary to that of disruptive creation.

Reprinted by permission of Harvard Business Review Press. Excerpted from BEYOND DISRUPTION: Innovate and Achieve Growth without Displacing Industries, Companies, or Jobs by W. Chan Kim and Renee Mauborgne. Copyright 2023 Harvard Business School Publishing Corporation. All rights reserved.