Established companies have typically achieved their success by focusing on “sustainable innovation:” continuous delivery of new features related to the core business. What’s needed today, however, is “disruptive innovation:” creating products and services adjacent to the company’s core business and shifting the market dynamics for the rest of the playing field.
In recent years, this has been the game of start-ups and digital natives that have boldly trampled into incumbents’ territories by identifying an overlooked niche market, offering customers a good-enough product or service, using the feedback to mature the offering and ultimately flipping the market in their favor.
Even when incumbents have had the resources to innovate, many have been toppled by this recipe. Some shy away from disruptive innovation because products and services built with new technology don’t produce shareholder-worthy growth rates. Salespeople might deem the new products unworthy of their time. In many cases, the existing culture can shield the core business from “pesky invaders” (new products that current customers don’t necessarily know they want) that — they fear — will steal resources or cannibalize the existing business.