Sunday, July 2, 2017

Disruptive Innovation

Good morning.
"And the beat goes on.................."

In an article by Greg Satell in the Harvard Business Review on innovation he notes:

"...every innovation strategy fails eventually, because innovation is, at its core, about solving problems — and there are as many ways to innovate as there are types of problems to solve. There is no one “true” path to innovation.
Yet all too often, organizations act as if there is. They lock themselves into one type of strategy and say, “This is how we innovate.” It works for a while, but eventually it catches up with them. They find themselves locked into a set of solutions that don’t fit the problems they need to solve. Essentially, they become square-peg companies in a round-hole world and lose relevance."

He goes on to describe four types of innovation:

  1. Sustaining innovation:  Most innovation happens here, because most of the time we are seeking to get better at what we’re already doing. We want to improve existing capabilities in existing markets, and we have a pretty clear idea of what problems need to be solved and what skill domains are required to solve them.
  2. Breakthrough innovation:  Sometimes, as was the case with the example of detecting pollutants underwater, we run into a well-defined problem that’s just devilishly hard to solve. In cases like these, we need to explore unconventional skill domains.
  3. Disruptive innovation
  4. Basic research 
It is the third category that caught my attention.

"When HBS professor Clayton Christensen introduced the concept of disruptive innovation in his book The Innovator’s Dilemma, it was a revelation. In his study of why good firms fail, he found that what is normally considered best practice — listening to customers, investing in continuous improvement, and focusing on the bottom line — can be lethal in some situations.

In a nutshell, what he discovered is that when the basis of competition changes, because of technological shifts or other changes in the marketplace, companies can find themselves getting better and better at things people want less and less. When that happens, innovating your products won’t help — you have to innovate your business model."

And I wonder if that might not apply to our sector and our efforts to stem the tide of audience decline, and even public valuation.  I think it may be possible that we are getting better and better at things people want less and less. 

While we have made some strides in trying to innovate in response to the challenges of high tech and other changes in the marketplace (by, for example, experimenting with other delivery forms of our performances and exhibitions), we have largely kept at improving what we have long done.  And despite the attempts to innovate in response to the challenges by continuing to improve what we do, that may not be innovation at all.  What we may need is innovation that has more to do with our business model than innovation related to our core offerings.  The offerings may not be the entirety of the problem.  We may need to disrupt our whole approach to innovation.

Innovation in changing our business model is, of course, more difficult than innovation in changing our offerings or how they are delivered, in part because there are government and other constraints on the nonprofit model itself.  But therein may lie the crux of the challenge to how we innovate.

Have a great week.

Don't Quit
Barry




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