When Joseph L. Bower and Clayton M. Christensen wrote Disruptive Technologies: Catching the Wave for the Harvard Business Review in the January-February 1995 edition, they debuted a new term, disruptive technologies, which challenged the so many large companies business practices about innovation. While some experts in the business community lauded their theory, others found the disruptive technology model too limiting.
This paper then will first explore what disruptive technology means through the different case studies analysed by both Bower and Christensen. What the model is and what steps can be taken to spot and harness disruptive technology in a company follows. Shortly after, this paper examines the models strength and weaknesses using other experts and researchers take on disruptive technologies after its publication. A short conclusion follows.
Defining Disruptive Technology
Disruptive technology is a term that was coined in 1995 by Christensen and Bowen in their now influential Harvard Business Review piece, aimed at describing new technologies or innovations that make seemingly infallible technologies or innovations forgotten in only a few years. Their article can be summed up into why do large corporations lose to smaller emerging startups, the risk of only listening only to your loyal customers, and how to spot what disruptive technology to exploit.
The disruptive technology model echoes the seminal book The Innovators Dilemma published by Christensen, and has been explained through the case studies of companies falling and rising to the pinnacle of success. As soon the publication of their Harvard Business Review article, it never took long for Christensen to expand disruptive technology to cover business models and other fields. New set of criteria were also developed that would help identify what qualifies as disruptive technology other than previously suggested. The aim could be to his response to growing clamor about the limitations of the model.
The Disruptive Technology Model
To discuss their conceptualisation of disruptive technology, Bowen and Christensen first delve into the long history of management and large corporations with strategic initiatives for their technological development. They noted why companies never go astray from pleasing their customers and getting as much as possible to meet the latters demands and needs. For larger companies, the approval of customers the safest bet are regarded as the key to stay competitive in the marketplace. In this regard, managers are expected by their senior peers to avoid the risky routes and instead follow what their customers voice out for them to do or execute because this is the surest way to succeed. As a result, companies and managers are failing in producing disruptive technologies, which in fact are detrimental to their companys future in the long-run if they are envisioning to create an innovative company (Bower & Christensen 1995).
Furthermore, Bowen and Christensen keep asking the same question on why big companies allocate big resources in the technologies necessary to retain their customers while neglecting to invest in emerging technologies that will be demanded by future customers. The purpose is to drive their judgment on why big companies find it unattractive to focus on coming up with new products and services that would cater to an unavailable (and probably not large enough) market or customers because they are still not existing in the present time. But they argue that managers given their situations are not at all doing the wrong choices because they too have data-backed basis for their actions (Bower & Christensen 1995). Then nearly before the end of their article, both authors have elaborated on the tactics that companies may be able to spot and pursue a disruptive technology. Before hand, it is a prerequisite that the perspective be changed from a larger companys to a smaller companys to evaluate the technologys promise.
However, further research and related works must accompany reading the Bower and Christensens works to further understand the rationale of the model. Uninformed readings may lead some to thinking that disruptive technology is a fad, a trend and an event. The clarification has been made by Christensen on this assumption on later works of his, stating that disruption is a process it might take decades for the forces to work their way through an industry but [they] are always at work (Christensen and Raynor 2003). The message then for the currently leading companies in this market in order to respond is for them to accept the new model and find ways to exploit it.
Approaches to Cultivating Disruptive Technology
Disruptive technology can be viable only if it reaches a sustaining technology mode. However, as Bowen and Christensen (1995) observe that sustaining technology is achieved when a product is duplicable and cheaper than its initial prototype in the commercial environment. However, both authors did not merely mention about turning a disruptive technology into a sustaining technology because they provided ways through which managers can employ in order to assess or pursue a disruptive technology.
First, they underscored that it pays to evaluate whether a technology is disruptive or sustaining. To do so, a smaller companys point of view must be employed when evaluating the nature or potential of a technology for its present an future foray in the market. They advised that while the market may initially be small for the technology, it may outgrow its existing or current market position in the future. The second step is to define the strategic relevance of the disruptive technology, which can be done through asking the right people about the fresh technology. They warned that current customers are not the right persons to be asking about the technology since their grasp of the usefulness and relevance of the technology for their present need will not match to the intended crowd of the innovation.
The third step is about finding the sweet market spot for the disruptive technology and to keep it there through building a small startup companies that are detached from the larger company. This is crucial in enabling the continued development and success of the disruptive technology, especially the drive of smaller companies and closeness to technology that it needs to succeed. But is merging the smaller entity with the bigger company the solution once success in finding the disruptive technology has been reached? Christensen warns about pursuing this easy and risk-free route as pre-mature merging may cost the life of the disruptive technology. Although it will be initially difficult when resource allocation is being considered, however, the bigger company must be vigilant when it comes to treating its smaller companies because all it needs is independence to experiment and pursue technologies it deem necessary to disrupt the market.
The final segment of the article convinces leaders and managers to curb their fear that a new technology will eventually swallow their existing business. The more important thing that companies must focus on is the future, which only these disruptive technologies can bring them there. Their present mainstream products will have an end sooner or later and by allowing disruptive technologies into the business cycle can provide them with even better lease for growth.
Are All New Innovations Disruptive?
Disruptive technological innovation may be one of the most celebrated concepts in the last 20 years and its actual definition continues to perplex many business experts and academics. When initially used, the term relates to mere technological innovation. Yet over time, Christensen widened the usage and application of the term to non-technological innovations but also products and business models (Markides 2006).
Further iteration of the term would later include as disruptive even essentially-different things apart from technologies, such as discount department stores, point-to-point airlines, mass market yet cheap products such as motorcycle and copiers, and more (Markides 2006). Hence, over time, those who use the term disruptive technology have misused it to cover all other innovations in reference to markets and economics. In the latter case, the result was teeming with numerous mistakes and misconceptions, which further confuses some of its ardent followers.
Opposed to the singularity in meaning of disruptive technology includes Daneels (2004) and Markides (2006) who argue that while innovation and disruptive product may arise in different ways, characterised by varying competitive effects, and requires different responses from incumbents, it will merely become too simplistic to be lumping all types disruptive innovations into a single category. The result can be negative whatever positive impact disruptive technology can provide.
The recent researches about disruptive technological innovation is a challenging work, not on the account of the length of its elaboration of its concept, but more so for established companies on how they will confront an unavoidable fact he new ways of playing in the marketplace of innovation are clashing with the established ways. Although both authors used the case studies of large companies, especially the ones with resources, that have been doing disruptive technological innovations, their criteria for success may simply not cover everything.
Different companies have different fundamental processes, discipline and core values. Adjusting to become an innovative company will thus require for them to develop a new mix of tailored efforts, as well as new complementary cultures and processes along the way. Trade-offs by these companies will be one of the main issue of concern, which Bower and Christensen, avoided in their discussion. For instance, how can large companies be able to compete in releasing a disruptive technology innovation against its smaller-scale peers when implementing new activities will not be compatible with the larger entrprises existing activities, such as value chain, internal processes, structures and culture. Third parties, such as suppliers, may also object once the larger company decided to push through with its innovative activities. The cost of trading off are huge straddling cost while inadvertendly degrading the value of its existing activities (Porter 1996).
This difficulty of competing with both low-cost and differentiation strategies, according to Porter (1980), is not impossible but only difficult. The scenario when new disruptive technology is released are two-fold: first, such model attracts new different customers from those that larger companies focus on; and second, it requires different and contrasting value chains from the ones established establishments presently have. Incumbent firms, who will view these, will see very little reward to imitate or adopt them. But once the new business model attracts more customers and their presence become undeniable not to be noticed even among estalished companies, it is where responding is a prerequisite among established businesses.
Since the introduction of the term disruptive technologies more than twenty years ago, it has attracted obvious reasonable support and criticisms. The reception overall has been positive because it challenges the way established companies manage their businesses while providing options on how they can exploit the process. However, the real party and audience of the model are the established enterprises, inviting them to consider the possibility of creating their own startup whose focus is creating disruptive technologies at all the criteria set by Bowser and Christensen. While it is tempting to j...
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