Netflix disrupted Blockbuster.

eBay disrupted the classified-ad business.

Craigslist disrupted newspaper classifieds.

Apple disrupted the music business.

Salesforce disrupted Oracle.

Pandora disrupted radio.

And of course, there are the many disrupters that disrupted entire industries, from the makers of the first personal computers to the makers of the first cars.

The theory of disruption is critical to understand, whether you’re a disrupter, an incumbent, or a customer. It can help you recognize and understand the disrupters in your industry and the opportunities they represent. It can help you figure out whether a disrupter will succeed. It can help you decide what to do if a disruptive innovation is succeeding against you. And it can help you decide whether to try to disrupt a competitor. The theory of disruption is a powerful tool for making strategic decisions. But it’s a tool—a powerful one—and it must be used carefully. In the wrong hands, it can lead to disastrous decisions. Don’t just use the theory because it sounds cool. Think critically about the situations in which it applies and the situations in which it doesn’t.

Disruptive innovations can indeed be strategic, but it’s important to have a purpose in mind. How might your business benefit from disrupting an incumbent? What will be your disruptive strategy? What are your key assumptions?

The purpose behind the disruption is to create a leapfrog opportunity that gives you the chance to change the game. You may find that your leapfrog idea needs to be altered or even abandoned as your strategic thinking evolves. But if you’ve framed your purpose correctly, you’ll have a good sense of when to push on and when to pull back.

Many managers believe that there’s a big difference between pursuing a disruptive strategy and following an existing disruptive innovation. In many cases, they’re right.

There are four reasons to pursue a disruptive strategy:

1. To create a leapfrog opportunity.

Consider Airbnb and Uber. By capitalizing on people’s willingness to share resources, these companies have created a new experience that is valued by customers and profitable for providers. This is the kind of disruptive idea that can create a leapfrog opportunity, in which the company that disrupts gains a strategic advantage over its competitors. Disruptive innovations help you to leapfrog the competition, creating an experience that is different from your competitors and valued by customers.

2. To create a niche.

Disruptive innovations can be used to create a niche, which may be profitable and can help you to differentiate your offering.

3. To reduce costs.

Disruptive innovations can help you to reduce costs, either by lowering the costs of producing a product or reducing the costs of serving customers.

4. To create a defense.

Disruptive innovations can help you to defend your business from a disruptive attack.

Think critically about your own organization. Does it have the capabilities to become a disrupter? If the answer is no, then you’re probably in trouble.

GamdAi Media
Contact us at: [email protected]

  Photo by Bruno Scramgnon.