As the workforce begins to return to (a version of) its pre-pandemic normalcy, advancements in business are happening faster than ever before. Teams and businesses must keep up with our world’s fast-paced environment in order to survive and stand out amongst the competition. The key to survival is investing in innovation. Explore disruptive innovation and/or sustaining innovation in your organization to create impactful and unconventional results and outshine competitors.
“Managers are often told they must ‘innovate or die’ but are given little useful guidance on how to go about it.” -Greg Satell, Mapping Innovation
In this article, we’ll explore the difference between disruptive innovation and sustaining innovation and how to incorporate them into your own organization.
There are variances between disruptive innovation vs. sustaining innovation, but there is also a time and place for both. Disruptive innovation and sustaining innovation don’t need to be alternative to one another, but rather can and should be leveraged as complementary measures.
According to the developer of the disruptive innovation theory Clayton Christensen, disruptive innovation means to reinvent a technology, business model, or simply invent something new altogether. Disruptive innovation generates new products, markets, and values in order to disrupt existing ones. Company examples of disruptive innovation are Waze, Airbnb, Uber, Netflix, and Doordash. This type of innovation drastically changes and/or improves a product or service in ways that the market did not expect. Disruptive innovation is accomplished through a combination of uncovering new categories of customers and lowering costs and enhancing quality in the existing market. This is done by utilizing new technologies and business models, and/or exploiting old technologies in new ways. Disruptive innovation is about identifying areas that haven’t been fully explored previously.
In comparison to disruptive innovation, sustaining innovation seeks to improve existing products and processes. It does not create new markets, but rather develops existing ones with better value. Sustaining innovation happens on an incremental basis, often in response to customer or market demand, or technology improvements. Sustaining innovation occurs within pre-existing markets that customers and consumers have demonstrated they value already. An example of sustaining innovation is the smartphone market – every year, cell phone manufacturers (i.e. Apple, Samsung, Huawei, Amazon, LG, etc.) release updated and improved products to meet consumer demand and to integrate new technology. Maintaining open channels for feedback and communication allow businesses to constantly improve and provide greater value to customers and the market.
A Time and Place for Both
The “innovator’s dilemma” is the choice a company faces when it has to choose between holding onto an existing market by doing the same thing but better (sustaining innovation), or capturing new markets by embracing new technologies and adopting new business models (disruptive innovation).
However, many companies today recognize it doesn’t need to be simply one or the other when it comes to disruptive innovation vs. sustaining innovation. In order to achieve cutting-edge innovation within a company while also creating long-term growth, both disruptive innovation and sustaining innovation should be included in the overarching strategy to achieve a combination of revolution and evolution. In other words, there is a time and place for both disruptive innovation and sustaining innovation. They do not necessarily need to be alternative to one another, but can and should both be leveraged. Great benefits will also be realized when the two are integrated well. For example, Apple utilizes both disruptive innovation and sustaining innovation through producing net new products and services, while also constantly improving upon and updating their existing ones.
Identify Your Needs
Organizations should be very intentional about their various needs when it comes to disruptive innovation vs. sustaining innovation and utilize each accordingly, with purpose.
Larger, established companies tend to be more successful when it comes to sustaining innovation. They have the resources, time, and an existing audience to be able to rely on more incremental change. More agile companies (often smaller companies and/or start-ups) tend to have the advantage when dealing with disruptive innovation. They may struggle to compete with larger corporations in more established markets but may be able to successfully challenge them in a new marketplace.
Christensen advises managers to follow four rules to avoid falling into the trap of trying to force disruptive innovation to happen the same way as sustaining innovation:
- Give responsibility for disruptive technologies to organizations whose customers need them so that resources will naturally flow to them.
- Set up a separate organization small enough to get excited by small gains.
- Plan for failure. Think of your initial efforts at commercializing a disruptive technology as a learning opportunity.
- Don’t count on breakthroughs. Move ahead early and find the market for the current attributes of the technology.
If you are a large organization that is looking to create disruptive innovation, consider finding a way to try it separately and autonomously from the main part of the business. This way, potential progress isn’t unnecessarily inhibited by any existing resources, processes, habits, or priorities. If you are a small organization that wants to sustain innovation, utilize your existing customer base for feedback and data on the most impactful improvements you can make to provide greater value.
Viima, the innovation platform, explains why both disruptive and sustaining innovation are important but must also be approached with the right intent:
“If all focus solely lies on developing sustaining innovation, being replaced by disruptive innovation is a bleak question of when, not if. Especially for large companies, investing in disruptive innovation is always necessary for long-term success, although it probably doesn’t pay off for a while. If you only start investing when a disruptive technology has already gained significant momentum, you not only have to invest increasingly more to catch up with the competition but also do so from a base of declining revenue for your existing business, which usually proves to be impossible. Keep in mind, however, that moderation is key. If all attention is simply steered towards disruptive innovation, revenue and profit will usually start to decline, which in turn increases the risk profile dramatically.”
There are massive benefits to both disruptive innovation and sustaining innovation approaches as well as many negatives to neglecting innovation altogether. Sustaining innovation is typically an incremental approach with long-term growth benefits, whereas disruptive innovation (which can also take time) has the opportunity to create new values and markets for something consumers didn’t know they needed, wanted, or were missing.
There is no silver bullet to innovation, but utilizing resources like innovation training will help provide insight into effective strategies that teams can pursue to dramatically increase their chances of success.
Here at Voltage Control, we help enterprises disrupt, sustain and accelerate innovation through custom workshops that transform the way your organization works. If your organization is facing innovation challenges, let’s chat about your specific situation and how we can help.