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Self-Disruption

Innovation basically refers to a change in ideas, products or processes to create more effective ones. It is our ability to create something different that leads to innovation. All the technologies are the result of continues innovations on the previous inventions. Innovations act as a catalyst for the growth of the market and with the more innovations, expectation of market becomes more and more. To satisfy this expectation, companies need to innovate continuously so as some other competitors does not do so. Thus from a company perspective innovation from others is a threat to their business and this threat is named as disruptive innovation.

Innovation can be resembled with “The Theory of Evaluation” which states “Changes that allow an organism to better adapt the environment will help it to survive in better ways”. The same goes with innovation; the ones that help the technology to adapt the market will survive and will disrupt the previous ones. As the environment and the market are becoming more uncertain, companies who do not innovate are prone to disruption. Disruptions can be big-bang disruption or self-disruption. When a new innovation wipes out the old technology and makes the old one’s product life cycle shorter is known as big bang disruption. On the other hand, when a company innovate themselves and replaces their own old technology, this is known as self-disruption.

With the digital era, every business is moving to digital platform to enhance their business and trying to self-disrupt. A decade ago, not many people could say that hotel and taxi business will turn on innovation with the digital platform but now we do have a one of the biggest taxi and hospitality company that owns no taxi or hotel but a digital platform extensively. Uber and Airbnb’s innovation is totally driven by technology and has disrupted the traditional business model of local taxies and cheap hotels. To avoid this type of disruption from newcomers, an existing company needs to self-disrupt so as to gain a competitive advantage and survive in this digital era.

Further, Self-disruption can be explained as launching a new innovative product that disrupts the company’s existing one. Adobe is one the best example of self-disruption. Being a traditional physical software provider with big market share, they disrupted themselves by switching to cloud service software. With the emergence of the digital era, cloud being adopted by people and organizations, adobe decided to turn their business and completely switched to providing software subscription on the cloud platform and most importantly it provided customer more satisfaction with up to date software tool on the cloud. According to vice president of adobe, their recurring climbed from 19% in 2011 to 70% of overall revenue today after this move.

To embrace disruption or to have self-disruption, one and the most important trait that a company should possess is agility. A company being flexible to changes and adapting and evolving according to changes can survive disruption. Business environment being dynamic in nature, companies needs to pose constant change and high level of flexibility. To understand the importance of flexibility, I would like to cite an example that is of before digital era. Lotus, being google of 80’s got acquired by IBM in 1995 and completely lost its product line. The reason for this is the rigidity of the organization. When Microsoft was developing windows and excel, lotus saw a coming threat and didn’t built any software for windows, so that everyone else will be away from it. Eventually, with success of Microsoft excel, their all customers started moving towards Microsoft and the company got failed miserably and could not survive the disruption. The reason for this is their rigidity.

Thus a company must perform continuous iterations on its product and services in each component of the market to have adaptability. They must focus on each and every aspect of product and service, and should always try to innovate. With the era of digital world transforming or integrating to different platforms, changing the business and revenue model would help in embracing disruption. Also, company should keep an eye on current and upcoming market trend. They must forecast the emergence of new technology that can impact their current product line up. Rethinking on agility, growth and innovations would not let others to impact the company.