Disruption Vs. Innovation: What's The Difference?  

It's been over a decade since Harvard professor Clayton Christensen created the concept of disruptive innovation, but ever since, the terms innovation and disruption have frequently mixed the two concepts. Understanding the difference between disruption and innovation is essential for businesses looking to identify opportunities for growth and remain competitive in an ever-changing market. Here, we'll explore what separates disruption from innovation and provide examples. 

What is disruptive innovation?  

Disruptive innovation refers to introducing a product or service into a well-established industry that outperforms the competition and, in most cases, at a lower cost. 

Harvard Business School professor Clayton Christensen first used the term "disruptive innovation" in his study of the disk drive industry. He later introduced it in his book "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail." 

Disruptive innovation is a widely used term today. It's a term thrown around whenever a cutting-edge piece of technology causes a seismic shift in an established business, industry, or market. 

The two types of disruption  

Clayton Christensen classifies disruptive innovations into two types: 

Low-end disruption  

Low-end disruption occurs when organisations enter the market at the lower end with a "sufficient" product or service at a lower cost. Christensen describes this disruption as conveying organisations with fewer tools and assets moving upmarket and gaining customers from incumbents who had previously embraced the norm. Larger organisations might not recognise small businesses as a threat rather than developing new strategies to defend their current market position. 

New-market disruption  

New-market disruption occurs when organisations create new segments in existing markets to serve underserved customers. They make more affordable and accessible alternatives for a significant portion of their customer base. Low-end disruption does not generate new markets. It simply acquires a new sector of the overall industry. New-market disruption competes with leaders by addressing new clients that industry leaders have overlooked.  

Disruption vs Innovation: Key Differentiators  

1. Product Quality and Performance  

A key distinction between sustaining and disruptive innovation lies in the product's performance relative to existing offerings in the market. Sustaining innovation aims to create products that outperform and surpass those already on the market in terms of quality and performance. 

In contrast, disruptive innovations seek to meet customers' needs in low-end and emerging market segments by offering "good enough" products in terms of performance and functionality. They may not be the same high quality as existing offerings, but they are often more affordable and accessible, making them appealing to a wider range of customers. 

2. Target Audience  

Sustaining innovation typically focuses on customers paying a premium for high-quality products with advanced features. In contrast, disruptive innovation targets customers currently underserved by existing products in the market. These customers are typically found in low-end and emerging market segments and seek products that meet their needs without the high price tag. 

For these customers, a "good enough" product that provides the necessary functionality at a reasonable price point is often more attractive than a high-end product with additional features they do not need or cannot afford.  

3. Business Model  

Disruptive innovations typically rely on a low-cost, low-profit business model, while sustaining innovations rely on a high-profit business model. 

This difference is critical because if a disruptive innovation were to yield a higher profit margin, established players in the industry would be motivated to fight for a share of the segment, effectively nullifying the disruptive innovation. 

What are some examples of disruptive innovation?  

To be considered disruptive, a technology must change a habit or behaviour and be accessible to a large segment. Let's provide some examples of today's disruptive innovations. 

Artificial Intelligence and Machine Learning 

AI is already a big part of today's processes, but it hasn't fully realised its capabilities or widespread use. Despite significant advances in the customer service industry, AI carries out actions that until now were carried out by humans, such as learning from data analysis or planning. 

For instance, ChatGPT, powered by artificial intelligence (AI) and machine learning, provides a more natural and efficient way to find what we're looking for, whether a question or a search and produce high-quality results.  

Self-Driving Vehicle 

Automated vehicles are an example of a disruptive innovation that is expected to be future transportation. Automatic vehicles can drive themselves by sensing environmental factors with built-in features like motion sensors, blind-spot detectors, and enhanced cruise control. 

Furthermore, several states have passed legislation and jurisdictions allowing these vehicles to operate on public roads. With the implementation of these regulations, it is expected that by the 2040s to 2060s, these automobiles will have significantly replaced human-driven cars on roads. 

3D Printing 

3D printing produces three-dimensional objects by successively layering materials based on a 3D model. This technology has numerous applications, including building houses from scratch. 

Numerous industries, from electronics, automobiles, jewellery, and architecture to the food industry, benefit greatly from 3D printing. This technology represents a significant shift in product development and manufacturing by allowing for rapid idea testing, continuous production, and decreased prototyping costs. 

Creating Disruptive Innovation  

1. Study the existing market and identify gaps or shortcomings.  

In-depth market knowledge is essential to create a product or service that can fulfil customers' needs and desires. By conducting extensive research, you can identify any gaps in the current market, which can be addressed with a new and innovative offering. This approach enables you to be proactive and foresee any upcoming changes, which can help you leverage the opportunities to gain a competitive advantage in the market.  

2. Identify potential opportunities or weaknesses in the current market.  

Disruptive innovation can arise from many sources, such as identifying an opportunity or exploiting a weakness in the market. For instance, a new business model or product may emerge, disrupting the current market landscape and providing consumers with a unique offering. Alternatively, you may identify a weakness in an existing product or service and capitalise on it by offering a superior alternative. 

It's critical to watch out for opportunities and weaknesses so that you can capitalise on them when they arise. Ultimately, this approach allows you to stay relevant, meet your customers' evolving wants and needs, and achieve disruptive innovation. 

3. Prototype your idea and get feedback from potential users or customers.  

An effective way to validate your idea and determine whether there is a viable customer for offerings is by testing it and obtaining feedback from potential users or customers. This approach allows you to identify any issues or shortcomings in your concept and make the necessary adjustments before investing your time and resources into development. 

Early feedback from early adopters is particularly valuable as it provides insights into what aspects of your prototype are most appealing and what areas need improvement. It can help you refine your product or service to better align with the needs and preferences of your target audience, ultimately increasing its chances of success in the market. 

4. Launch your product or service and continue to improve based on feedback from users/customers.  

Launching your product or service is important in the innovation process, as it provides an opportunity to obtain feedback from users and customers. This feedback is critical as it helps you identify gaps for improvement and make adjustments to meet your customer's needs better. Through this process, you can create a product or service that truly resonates with your audience, increasing the likelihood of success. 

It's important to note that success is never guaranteed, and many factors can impact the success of an innovation. However, by following best practices and being aware of your customer's needs, you can increase your chances of creating a truly disruptive innovation that can transform the world. 

Creating Radical Innovation  

Businesses must take a strategic approach to radical innovation, weighing the potential benefits and costs. Businesses must: 

• Create an innovative culture that values creativity, experimentation, and learning from failures. 
• Develop an innovation portfolio that includes both incremental and radical initiatives with varying levels of risk and return. 

• Create an innovation management system to identify, evaluate, refine, and implement the best ideas. 
• Use the resources, abilities, and insights from collaborating with external partners, such as customers, suppliers, educational institutions, and new ventures. 

Can you have innovation without disruption? gigCMO's Key Takeaway  

• Innovation doesn't necessarily have to involve shaking up the entire industry or market. However, small changes and tweaks can have a big impact and lead to growth and success for SMEs. 

• Focusing on incremental innovation and continuous improvement, SMEs can stay ahead and provide better offerings to their customers. By listening and addressing their pain points, you can identify areas where you can make meaningful changes and create value. 
• Innovation can also be about finding new ways to solve problems or meet needs that haven't been addressed before. This innovation may not be disruptive but can still be highly valuable and impactful for SMEs. 
• Ultimately, the key to successful innovation for SMEs is staying curious, continuing learning, and being open to new ideas and approaches. By embracing a culture of innovation and experimentation, you can find new methods to improve and grow your business. 

So if you're ready to start innovating and driving growth in your business, contact gigCMO today. Let us help you how to cultivate a culture of innovation within your organisation and harness the power of continuous improvement to drive success.