Why Disruption is Not the Goal

Written by Lane Harbin 02/08/2017 Category: Strategy

Disruption. It's a revered concept in the tech industry these days, but the obsession with “disrupting the industry” can be a detrimental distraction.

By its very definition, disruption starts from a negative point-of-view. The stated purpose is to get in the way of something. When disruption is the goal, it takes attention away from the real market need and focuses it on the incumbent. Focus is drawn from the ultimate pursuit: Creating something remarkable.

Creation is generative. It holds the potential of bringing something new and meaningful into the world. For a business endeavor to be worth pursuing, it must fill a real void in the market. Smart innovators begin with a clear picture of that void and aim to create something beautiful to fill it. The market may recognize the gap already or they may not know it until they see it — but if your solution is sophisticated, has integrity, and solves the problem better than anyone thought it could be solved, people will stop, take notice, and embrace it. That change is disruptive but it is in response to a well-conceived creative movement.

Uber’s ride-sharing technology is a classic example of a creative approach.

Mini Creation Case Study #1: Uber

Uber is cited as the poster child of “disruptive technology,” but let’s look a little closer. Riders (many of whom had never even taken a taxi) now use Uber’s services for their commute, to avoid paying parking fees, in lieu taking public transportation, as their designated driver, and in numerous other ways. Drivers can now work on demand, set flexible hours and use their own cars. Uber did not just replace traditional taxis; they now serve a much bigger market than yellow cabs ever did. By making transportation more flexible and inexpensive, Uber created a “new and better way” and transformed the way we travel.

As we have experienced with Uber, the most exciting companies give us new and different ways of living, thinking, or doing business. Many times, says the author of Play Bigger, they solve "a problem we didn’t know we had or one we didn’t pay attention to because we never thought there was another way."

Focusing solely on disruption rather than creation will also limit your potential growth to just the size of the current market: those customers who are already using alternative solutions to their problem, rather than those who aren’t being served at all. Disruption leads you to think of improvements to current products; creation leads you to come up with something completely different. Remember: “The electric light did not come from the continuous improvement of candles.”

Creators aren’t making products or services that just incrementally improve on whatever came before. They transform the market and make previous alternatives seem outdated, clunky, inefficient, costly, or painful. They find a group of customers that aren’t being served and offering them a better way. Let’s look at Lucro as an example of creation in the B2B technology space:

Mini Creation Case Study #2: Lucro

Healthcare providers are swamped. The number of vendors vying for their business continues to expand exponentially, while providers’ resources and processes for vetting them have essentially remained the same. A group of healthcare leaders got together and, based on their firsthand understanding of the problems surrounding the hospital buying cycle, are creating a unique solution: a platform that allows hospitals to identify their needs, vendors to share their innovations, and stakeholders to make fast and informed decisions.

Lucro's platform isn’t aiming to merely improve how hospitals interact with vendors; it is creating an entirely new ecosystem in which hospitals are able to connect and communicate throughout the process of discovering, evaluating and choosing suppliers. The resulting paradigm shift will be disruptive, but that isn’t the intention of its creators. They are designing a solution to a specific problem in the space, based on what leaders knew hospitals need. Disruption will be a byproduct.

Companies that focus on creating — rather than disrupting — design, develop, and dominate entirely new ways of doing things. They end up spawning new categories of business. In doing so, they set themselves up to generate tremendous value over time by capitalizing on untapped potential. In fact, research shows that category creators usually comprise 70-80% of that category’s profits and market value. In terms of brand recognition, category leaders often earn icon status because they come to represent the whole category. These are the companies whose brand names now double as verbs: ones like Xerox, Google, and Uber.

By being the first and best at identifying the problem, category creators are able to own the solution to that problem. When you focus on creating, not disrupting, you will likely end up with a more creative solution, a larger total market size, and a group of customers that is excited about a better way of doing things.

Categorized in: Strategy

This post was written by Lane Harbin