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.

Disruptive Innovation

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.

Sustaining Innovation

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.

The post Disruptive Innovation vs. Sustaining Innovation: a Time & Place for Both appeared first on Voltage Control.

This is part of my series on thought leaders in the innovation space.

It’s natural to think — “It must be an edtech thing” — when you first hear about Michigan State University’s Hub for Innovation in Learning and Technology. But, as the Hub’s Director, Jeff Grabill, shares: “What surprises people is how little of our work focuses on, or leads, with technologies.”

The Hub’s mission is to help MSU reinvent itself as a learning institution. The mechanisms that Jeff’s team employs to collaborate with the school and faculty for this reinvention take many forms, including, yes, technology, but also strategies like organizational design and classroom learning methodologies.

Origins of the Hub

Now in its third year, the Hub was formed as part of MSU’s student success initiative. Student success initiatives — which focus on student retention and graduation rates — are a hot topic in higher education right now. As Jeff shared, that’s because of low graduation rates at institutions across the board: “Only about half of students graduate in six years, which is the federal standard. At Michigan State, our graduation rate just got to 80%, which is good. But we still have some persistence issues, and we still have some gaps for students of color and first-generation students.”

The Hub is helping the university transform itself and the student experience by partnering with faculty and departments within the university on critical projects. In the three years since they formed, Jeff’s been working on building the Hub’s project portfolio. The need for innovative thinking and transformation could be endless at such a large state school.

Therefore, Jeff has concentrated on finding projects that will have a considerable impact: “We partner with our colleagues that we think have impact because they touch a core operating system of the institution, or they impact large numbers of students. Or, they’re compelling enough as a model that it’s worth doing because the model can be shared around campus for others to replicate.”

Innovation is a Four Letter Word

One of the fascinating threads throughout our conversation was how innovation is perceived in higher education today. “Innovation in higher education is kind of a dirty word,” Jeff said. Because of that, the Hub’s team approaches things from a different angle. And, that angle is definitely not about bringing cookie-cutter start-up culture and innovation cliches to East Lansing. “We think about innovation not as a bright and shiny thing or from Silicon Valley, but as a sustainable change in behavior or practice.”

“We to think about innovation not as a bright and shiny thing or from Silicon Valley, but as a sustainable change in behavior or practice.”

Phrases like “disruptive innovation” can be off-putting for faculty and may distract from the less flashy ways that meaningful change happens at universities: “There are certain things that we do at MSU and in higher education that deserve to be disrupted. We look for those things, but maybe in more mundane ways. We’re very interested in things that may not be seen as disruptive, but really will have a substantial change in how students experience the institution.”

At the Hub, it’s not about innovation or technology for the sake of turning things on their head or keeping up. Change is something that authentically benefits MSU students. That might be as deceptively simple as redesigning the student orientation or the first-year experience.

The Benefits of Slowness

We dug a little deeper into why innovation and talks of disruption may meet with skepticism on campus. First, Jeff talked about “cultural fatigue.” The faculty has seen it before. They’ve witnessed both good and bad ideas come and go. They’ve been involved with design consultants who have tried, sometimes unsuccessfully, to facilitate design thinking or innovation at the university.

More intriguingly, Jeff thinks there is an upside to the fact that universities are often slow-moving. There is a “virtue” in this slowness, which stands in stark contrast to our current obsession with speed. That’s part of why their insider’s approach to innovation is working at the Hub. They know the culture and how it operates. It’s about being open, rather than resistant, to how faculty work and think. Sometimes important change takes time, and often for good reason.

“Slowness is both a virtue and a vice of higher education.”

“If you’re going to get involved in the innovation business in higher education, you have to know what you’re talking about. You have to be able to marshal a fair amount of evidence to help faculty learn to trust you and listen and participate in the process,” Jeff said. “Slowness is both a virtue and a vice of higher education. We can be very slow. But one of the virtues of being slow is we tend not to jump on bandwagons very quickly. And faculty know that sometimes going slow means that they make the right decision.”

This more measured stance also translates to how the Hub approaches their projects and partnerships. Jeff talked about how they spend a fair amount of time in the upfront stages of their project, or what they call the chartering process. “The charter is not that interesting, but the chartering that we do with people is very interesting. That’s where we make sure we get to know each other. We make sure that we’re using the same language, that we have the same understanding of the words we use, and that we have the same goals. Having these fundamentals in place and solid from the get-go has been key to success.”

Education Not Transmission

The Hub has several ways to engage with university groups, including assessments and educational technology engagements. But, one of the most “tricky” aspects, according to Jeff, has been the work they do with learning design. Learning design is essentially how classes or courses are taught — i.e., are they interactive lectures, a talk accompanied by a PowerPoint, or purely conversational? In the age of technology and online education, there is an opportunity to rethink how learning happens both in the digital and physical classrooms. And, as Jeff has found, learning design is an emerging discipline: “It’s something that a lot of institutions are inventing.”

One of the recent trends in the so-called disruption of higher education was the arrival of MOOCs — Massive Open Online Courses. (Think: Khan Academy or EdX.) “When they first started, the proponents thought that they were going to disrupt higher education absolutely.” Yet, the radical dissolution of the university and college model has not happened, despite the explosion of free, or inexpensive, online courses and training.

According to Jeff, that’s because much of the edtech industry has misunderstood how education works as a business. “They want to apply business practices to universities, but education is a business, and it has values. It has a political economy.”

Part of that misunderstanding has been assuming that education is simply the transmission of information. In other words, if you make a lecture available on an online platform, we have made it possible to successfully transmit information between teacher and student. Jeff continued: “They think that the way humans learn is a function of a professor transmitting content via a lecture or a video to a student, and the student will consume that content and learn. That’s not how education works.”

“If that’s really what education is, and that’s how simple it is, then the television really would have transformed everything about how we learn.”

He went on: “If that’s really what education is, then the television would have transformed everything about education and how we learn. The fact is, television hasn’t disrupted anything about education or how we learn. Neither will computers or computer networks if that’s how people understand education and how they understand learning.”

“Learning is complex and humans learn in different ways. Humans often learn best in conversation with each other. This is why the Socratic method has been a persistent method, because it’s a method that’s grounded in conversation and questioning.”

Relationships and Conversations

Jeff has found that conversations and strong personal relationships have been fundamental to success at the Hub. It’s what he says has allowed them to do meaningful work: “The best work that we do is grounded in effective relationships. Being an internal design group, that’s also advantageous to us because we know our colleagues well.”

They’re building these relationships by, “designing conversations. That’s fundamentally what our design practice is.” By this, Jeff means that, as designers, they facilitate ways for colleagues to talk, think, and decide. They create the circumstances for important debate: “If we’re doing our job well, we design ways for our colleagues to have conversations with each other. Conversations that they wouldn’t have without us. Conversations that they couldn’t have imagined having, conversations which are (and I’m going to use a word that I said is ‘bad’) disruptive, which are creative, which change the context in which they thought they were working. We reframe the conversation, and we reframe the problem for them, and it opens up new possibilities.”

“We reframe the conversation and we reframe the problem for them, and it opens up new possibilities.”

Additionally, it’s important to note — for Jeff, these conversations are about listening, not talking. “Part of designing conversations is making sure that we are expert listeners. One of the areas of expertise that we have to bring to our design practice is listening. Listening is hard, particularly the nuance. Listening to engineering faculty members, for example, is very different from listening to French faculty members. We have to figure out how to listen. And we’re trying to figure that out. The biggest failures come when we don’t listen. And when we fail to appreciate the cultural dynamics of the university fully. They are complex and run deep.”

“The biggest failures come when we don’t listen.”

If you want to read my other articles about innovation experts and practitioners, please check them all out here.

The post Don’t Call It Disruption appeared first on Voltage Control.

This is part of my series on thought leaders in the innovation space. Check out the other articles here.

Brett Richards, author of the book Growth Through Disruption, is focused on demystifying innovation and providing leaders with a clear path to drive innovation within their organizations. After years of studying cognitive styles, Brett believes that organizations have mindsets or thinking styles that are distinct from individual or team mindsets.

“Understanding a mindset within an organization is really, in my view, extremely important because it strongly affects the way in which an organization goes about responding to the challenges it’s facing in its operating environment.”

Driving growth through innovation often requires some level of transformation within the organization. For Brett, that transformation must start by understanding the current mindset — something he views as distinct from explorations of organizational climate and culture — to determine where change is needed. “A mindset influences how we view things. It influences what we pay attention to and what we don’t pay attention to, how we filter, how we interpret, how we ascribe meaning to competitive threats or changes in regulations that are happening in the market.”

Assessing innovation readiness

Inherent in the concept of organizational mindset is the idea that organizations function as a system rather than a collection of individually functioning parts. With that in mind, Brett’s research on organizational development has culminated in a new, quantitative tool to assess an organization’s ability to create new value called the Organizational Growth Indicator (OGI). The OGI begins with an online assessment completed by a broad array of leaders and key contributors within the organization. “The power of the tool is that it provides an organization with a number which [describes] their current level of capability to drive and create new value and support effective transformation.” Organizations are evaluated for how they leverage four mindsets and eight orientations and receive a score from 0–100%.

“Much of what happens and influences an organization’s actual ability to innovate and grow are invisible dynamics that we can’t always see underneath the hood. What the OGI does is shine a light on these intangible yet vital factors that influence the extent to which the organization can activate its strategy and vision successfully.”

By providing leaders with quantitative metrics to back up what many good leaders intuitively know, the OGI fosters objective conversations with teams around strengths and what may be getting in their way.

Brett has heard the adage “culture eats strategy for breakfast,” and, while he believes culture is a crucial factor, it doesn’t present the full picture. Qualitative tools like culture surveys “describe what your culture is. That’s helpful, but it’s not telling the organization what their actual ability is to affect change or to shift culture. The OGI not only describes and gives a mirror to what your cultural mindset is, but it simultaneously speaks to the ability.”

The assessment can be taken by employees across an organization. Brett emphasizes 100% participation from senior executives and director teams as well as at least 80% participation from management teams. Once the assessment is completed, Brett analyzes the results and reviews them with the leadership team to identify remedies. The insights discussed can be broken down by senior executive team and leadership level or location for precise and informative feedback on where teams are strong and where there are opportunities for improvement. Brett has found the tool to work across a variety of industries, with organizations large and small, and in Europe and Asia as well.

In practice, Brett has observed how the OGI links to actual performance metrics. “Drawing on theory and then through application, I’ve created five tiers that relate an organization’s score to real revenue growth rates within organizations.” For example, a tier three organization (one with a score of 48–56%) can expect revenue growth of 1–9%. A tier four organization moves to 10–24% growth.

Innovation isn’t effective in isolation

Viewing an organization as an integrated system, Brett sees innovation viewed and conducted in isolation as a misguided approach. Counterintuitively, even companies with large research and development teams and budgets can still struggle with growth through innovation. “The great ideas that come out of R&D have to be socialized and integrated and transformed into the broader organization. If the organizational system is not supportive of that, then the organization’s ultimate ability to drive value into the market will be compromised despite having a tremendously powerful R&D wing within the organization.”

To mitigate problems where innovative efforts languish from lack of integration, Brett says the first step is acknowledging and understanding the nature of organizations as systems. “It gets to a very basic root cause of failing to [see] just how important understanding an organization as a system is to supporting organizational transformation and growth.” This is why Brett views ad-hoc programs as ineffective in driving change.

Organizations seeking change often resort to hiring outside consultants for training initiatives focused on leadership teams. “This is a classic example of an ad hoc solution, a mechanistically-minded thinking process which fails to understand that, for all intents and purposes, you’re throwing away your money.” The training often serves as a band-aid and organizations are left wondering why they don’t see improvements as a result. “A lot of organizations throw training at stuff because it’s easy to do. It can be excellent training, but if it’s not integrated within that organizational system, then we’ve got a problem.”

While organizations understand that leadership is important, the apparent working equation that leaders plus training equals improved organizational performance is lacking. Once leaders complete the training and return to the organizational system they realize that, despite their investment, they’re not seeing a big impact. “You get frustration [from] the leaders who are going through this awesome development. They go back into the organization, but it’s not supported in the broad sense. The new organizational performance equation must start with organization — it’s organization plus leaders plus training equals improved performance.”

Innovation for survival

When it comes to measuring innovation efforts specifically, Brett seeks to identify metrics that matter to the organization’s survival. One aspect of a company’s survival relies on innovation itself. “The problem is that organizations don’t understand that innovation is probably the most significant predictor of an organization’s ability to thrive successfully into the future. Organizations that don’t innovate — they’re dead.”

“Organizations don’t understand that innovation is probably the most significant predictor of an organization’s ability to thrive successfully into the future.”

In his book, he calls out thirteen inconvenient truths related to organizational innovation — namely, “an inability to break the bonds of short-term thinking at the leadership level will kill innovation.” Reluctance to set aside funds exclusively for innovation can rob organizations of their future survival.“What happens is that because of short-term thinking they build a system where they can borrow money from the pool of unsecured money for innovation so that they can satisfy some of their short-term operational requirements. It’s really just because a slush fund to move around.”

To support and increase the ability to innovate, organizations must ensure they have a clearly articulated innovation strategy that is integrated into their overall business strategy.

“Until you have your innovation strategy fully embedded and linked to your overall business strategy, you’re setting yourself up for less effective action.”

The OGI measures the extent to which an organization’s innovation strategy is articulated and understood as well as whether it is adaptive and responsive enough to meet the needs of the changes occurring in the market. For example, in the case of hospitals, innovation may look different. Innovation requires risk and a hospital’s goal is to reduce risk as much as possible to save lives. “What becomes important within a hospital system is to be extremely clear and articulate about what we mean by innovation in the hospital system. Innovation within a hospital context has to do with things like patient experience or efficiency, driving efficiencies within the organization.”

Not only does measurement through tools like the OGI serve to provide valuable data on an organization, but it also serves as a means for necessary conversations. Those conversations can help elucidate where key problems lie. For example, is the executive team in agreement on what the organization needs to do to drive innovation? What do leaders think innovation looks like at the company? “If you’re truly serious about improving your organization’s ability to grow through new value creation and adaptive transformation, you have to take a serious look at the organizational system and what are the factors that are influencing and/or constraining your organization’s ability to do that.”

In addition to establishing benchmarks and areas to focus improvements, Brett says the OGI can be used in successive iterations to evaluate those improvements. “The organization can add in ten custom questions to the OGI analysis and that enables the organization to evaluate the impact of certain training or organizational development initiatives.” OGI scores are correlated with people’s participation in the training to see if there has been any lift in the scores for those groups. By measuring mindsets and the effects of organizational development initiatives, Brett seeks to provide a tool to organizations for understanding the nature of their system and identifying actionable ways to increase their ability to innovate and thrive into the future.

If you want to read my other articles about innovation experts and practitioners, please check them all out here.

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