It’s not just the machines that are changing with the times – they are changing the world itself – and businesses will need to change, too.

Disruptive innovations – how do we label them?

For this we always need to think bigger and better. A disruptive innovation creates a new market and changes the value network involved. As a result, existing technology is replaced, a new set of consumers emerge and when it becomes a popular commodity, prices drop. Unlike sustaining or evolutionary innovations, which offer neither influence nor improvement, disruptive innovations change a lot of things when they appear on the scene. In fact, the ‘scene’ itself changes.

Tech nostalgia: disruptive innovations for businesses in the 80s and 90s

Looking back, we had to start somewhere with the digital revolution at work. Remember when these not-too-distant transitions occurred?

  1. The typewriter was replaced by the PC – goodbye to the typist pool.
  2. Secretaries and personal assistants were less in demand and often replaced by Windows Outlook’s email, scheduling and calendar functions.
  3. Letters and greeting cards became obsolete once email became popular, reducing postal revenue.
  4. Mobile phones single-handedly rendered phone booths irrelevant and curbed landline usage (except in very rural areas where reception was poor).
  5. Amazon.com turns wide-scale book sales into a digital practice and shuts down both independent booksellers and international chains.

What disruptive innovations means for businesses now

We’ve seen a number of innovations transform the working world in the last few, short years. Laptops and smart devices enable corporate networks connection just about anywhere and people in offices around the world can attend meetings through Skype.

In one fell swoop we’ve been able to say goodbye to the desk computer, open-plan office, meeting rooms and daily commute – not that this is a universally accepted dismissal by any means but the capability is there. All-singing and dancing smartphones have also erased the need for separate cameras, PDAs, GPS devices, cell phones and a number of machine functions performed by mobile apps.

On the other side of the table, businesses need to evolve rather than be disrupted and thrown off course by such innovations, both when it comes to incorporating new technology and identifying new markets that will be affected by it. Clayton M Christensen, Professor of Business Administration at the Harvard Business School and an early commentator on innovation in commercial enterprise, warns that disruptive innovations can have ill-effects on even the most successful and well-run businesses. A company that focuses only on their own research and customers while disregarding markets affected by disruptive innovations is missing a key piece of the puzzle. In short, customers focus on the here and now of current products and services, but by definition a disruptive innovation usually creates a new customer base. It’s not the only view to take, of course, but the implications of Christensen’s argument are striking.

As the Internet of Things gets closer to realization and interconnectivity increases, we’ll see tech advancement occur more rapidly. From the driverless Google car changing the way companies ship products to 3D printers taking business out of the hands of manufacturers, disruptive innovations are quickly taking hold. Cloud computing is disrupting tech in the business world, displacing resources conventionally located in-house or provided as hosted services. Social networking is changing the way we communicate for personal use (disrupting telephone, email, instant messaging and event planning) but it has also become a powerful way for companies to reach new consumers, share research and generate publicity. On top of that, social networks now host content, which eliminated a number of steps and transactions previously needed to share material – a user wanting to share photos had to set up a website, pay for hosting services and go about finding an audience. Today social networking sites allow photo-sharing for free.

Can a business afford to miss out? It’s doubtful. Disruptive innovations’ markets are the markets of the future. You can join them as customers or producers, but no one wants to be the Grand National champ when the first Model-T Ford pulls up.

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