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I’m on an airplane, and as I listen to my iPod I’m looking at my seatmate’s MacBook Air. These products show what an innovative company can do when it listens to a market demanding not just new editions of existing products, but new products altogether.
Competition is relentless, and can come from anywhere, at any time, no matter the industry. In high tech, Saleforce.com became a threat to once market-leading Siebel in just a few years; more recently, MySpace owned the social networking space for what seemed like a few minutes, when Facebook came along. In the fashion industry there used to be four seasons; now apparel manufacturers compete in up to 18 seasons. In consumer electronics, the competitors themselves change; former television manufacturer Motorola is now known for cell phones, and when Dell broadened its offerings to include televisions it began competing not just with HP and Lenovo but with Circuit City and Best Buy.
Consumers, rather than being confused, embrace this type of change. They adopt earlier and faster, creating bigger, faster successes out of wholly new products, such as the iPod or iPhone. Their expectations around new products are higher than they have ever been, and their demand for innovation is constant. And they talk about it – in blogs, forums, online communities, podcasts, twitters, et. al. A recent survey I read showed that the most trusted source for consumer product information and insight, after family and friends, was strangers with product experience. They beat out teachers, TV, news, advertising, and other media. In 1997 this same survey placed strangers near the bottom of the list. The result: A business environment in which the need for companies to innovate is constant.
But all innovation is not the same. Some types of innovation are disruptive. Some types are sustaining. Companies need both to thrive, but must treat each differently. Disruptive innovations typically are products or services or methodologies (such as business models) that can open up whole new markets for organizations. Disruptive innovations generally form not from a single idea, but rather from a collection of ideas and thoughts that often appear in online community conversations or idea portals that provoke or spark the innovation. The new bicycle developed by Trek Bicycles (cited in a Productologist blog post, which is what sparked me to write the post you’re now reading) came about as a result of conversations carried on with current and prospective customers. Trek gathered and analyzed the requirements of casual bicycle riders to come up with a whole new design.
Sustaining innovations, meanwhile, helps organizations maintain or grow their market share typically by adding innovative new features or capabilities to existing offerings. My iPod? Disruptive. That MacBook Air? Sustaining.
But at what point do you determine you need a new product, as opposed to enhancing an existing one? To get to that point, companies first must understand that disruptive and sustaining innovations are not the same, and should not be treated the same. Each goes through different gates and takes a different path down along the new product development process. It’s very important that companies put in place an innovation process that enables them to look at and analyze innovation with an eye towards disruption as well as toward determining how to continuously improve their current products with innovative new features. Listen to the voice of the market, and you’ll hear demands not just for better products, but for new (i.e. disruptive) products.
Do that, and you just may also disrupt the revenue goals of your competitors.