Where and how we do we start disruption and innovation?

Disruption and innovation is fairly straight forward in startups. No legacy to deal with. Come out with a great idea, build an offering and off you go. Today with the as-a-service model, this is all super simple to do.

However, disruption and innovation is a bit harder in companies that have a customer base. My formula actually contends that the longer the company has been in business the slower the rate of disruption and innovation. The formula looks something like this:

Length of Time in Business = Slower Rate of Disruption and Innovation

So why is that?

For a number of reasons. Two key reasons are inertia to change (resistance) and the fact that you have a long tail of existing clients that you need to think about when you disrupt existing business models. The latter is directly related to incoming revenue streams that folks don’t want to mess around with.

However, it seems that at some point we need to be willing to bring the disruption in big time! This does mean to be willing to change things around and yes, there is a risk. However, the risk of incremental revenue loss is minimal compared to not staying in business long term!

So, how do we do this? I am finding that the best way is to identify the areas of disruption and innovation which are core to our business and starting a genuine side project to start building the innovation, with a clear intention to change the direction of the product. At the same time preparing the market that things are changing.

If we do not do this and try to stick to our legacy business, things will fail. Think of RIM. In the smartphone revolution RIM missed the mark because if felt that the loyal RIMers (such as myself) would never abandon Blackberries and cross to the i-Side! Shortsighted. Think of how far RIM would have been if it elected to start a project looking at new phone designs instead of continuing the blackberry story… many examples like this. So we need to be willing to bring innovation in , even when painful.

Secondly, the resistance inside needs to be dealt with. I find that this is where the core of the problem lies! Folks that are not willing to change their views and their lens! In the How-to-ProVoke, we talk about how to overcome this inertia and resistance and be on the path to innovation.

Here is the huge surprise…Many time my clients will tell me that if they change there will be an uproar from the market. That is totally false. The market ‘wants’ disruption and innovation. Look at how the global market has embraced Apple, Google, Facebook and others. Claiming the market will not tolerate change is a convenient but irrational excuse. In fact the same ‘market’ will fail a company who refuses to evolve. Think of Motorola, Nokia, Kodak and many more examples.

Would love to hear your thoughts…What do you think?