Disruption and innovation are buzzwords today. Yet, much like the flavour of tofu, which doesn’t taste like anything unless you add sauce on it, disruption and innovation don’t mean anything unless you supplement these words with explanations and examples. Before you can become innovative, you need to understand what it means to be innovative.
The best and most concrete definition of innovation is from a McKinsey report that I read many years ago and it says that innovation is about doing the same thing, just better. When you innovate, you’re essentially taking a product in the market and are making it better by enhancing a specific dimension of its property. Innovation could also be that you create something new that the market hasn’t seen yet and this new invention is an alternative to an existing product. However, this new invention hasn't become disruptive for the simple reason that people can choose between other options, but this new invention doesn’t make the current item obsolete.
Let’s use Procter and Gamble’s Tide washing powder as an example. If you enhance this washing powder by changing the concentration of the powder, creating Tide Ultra-White which helps users to use less powder and get the same washing results, that’s innovation. If you then created Tide liquid, a new washing product that isn’t powder anymore, that’s still innovation because it’s complementary to what’s in the market. Now, if you were to create a washing machine that doesn’t need powder or liquid and uses ultrasonic waves to shake the dirt off your clothing, then you have created something disruptive. This new invention causes washing powder and liquid to be completely obsolete.
It’s important that the disruption makes other alternatives obsolete. Just causing a buzz may be disruptive but it’s not a disruption.
An excellent example of disruptive innovations that are not disruptions is Uber. Uber can appear to be disruptive because taxi drivers are raging about how they’re out of a job and that Uber has disrupted their livelihood. However, when we look at Uber from a macro view, it does the same thing that a taxi does. It’s the same mode of transport, the same person sitting at the front and driving passengers around. What Uber has done differently is that they have connected all these cars to the internet so that people can easily book rides on their phones. Essentially, the ride-hailing service is shifting from a yellow Mercedes Benz (in Germany most taxis were yellow Mercedes Benz) to a green Toyota Prius. This innovation isn’t considered to be disruption unless Uber created pods for people to travel in, and these pods can be turned into offices. That’s disruption. As it is now, while Uber is disruptive to taxi drivers and taxi companies, it is an innovation and not a disruption.
In fact, Skype is more disruptive to ride-hailing than Uber.
With Skype, you don’t have to travel to meet someone anymore. You could do a video call and meet with the person, interact and even conduct meetings. Skype disrupts the ride-hailing industry because the video call replaces the journey they would have taken on those automobiles.
Currently, Skype is also disruptive to the airline industry. In the old days, without Skype, if you wanted to have a face to face conversation with someone you had to fly to them. With Skype, you don’t need to fly to other countries to have such discussions unless you wanted to meet with them physically.
Another disruptive product to taxis would even be virtual reality. If you have virtual reality, you don't need to drive across town for a meeting. You can just put your headset on in front of a desk at home. It seems as though you’re at the meeting and you don't need to travel anymore. Your Oculus Rift headset has disrupted the Uber and the taxi industry because you don't need to use them to go to meetings anymore.
The reality is that some of the most significant disruptions are not even that obvious. For instance, elevators have entirely disrupted real estate pricing models. In the past, when you had to walk up the stairs, the top floors were cheaper because they were harder to access. However, now that we have elevators, the top floors are the most expensive because they offer the best view.
While disruptions cause significant impact, innovation alone is also very valuable to consumers and companies. Innovating to meet the underlying needs of people more could potentially cause you to develop something disruptive.
So what can you do as an individual to become more innovative and perhaps even create disruptions?
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Chair, Singularity University & Co-Founder