Disruptive Innovation is an important weapon for organizations in the era of Disruption. But how many organizations truly understand Innovation?
“Not change Not survive”
About 2-3 years ago, an executive said, “In the business world, it will get harder and harder,” and “If you think about doing the same thing over and over again, you can prepare to close down your business soon.”
These two sentences are exactly right and they are true.
If we look back at historical data, we will find that more than 88% of the companies on the Fortune 500 list in 1995 have now closed down (data from www.aei.org).
The main problem was that the executives and companies at that time could not handle the changes that occurred in a timely manner, causing the giant companies in the past such as KODAK, NOKIA, Blackberry or Blockbuster or others to collapse due to the giant wave of change.
The key point that causes a giant wave of change is that traditional businesses are disrupted by the advent of Digital Technology, especially digital platform businesses that have emerged in large numbers, such as Amazon, Alibaba, Facebook, Netflix, which have replaced traditional businesses. And there are many more companies of this type that are ready to compete with current businesses.
The consequence is that if any organization is too slow to adapt or does not see a way to deal with these companies, they are in for the next big wave of change.
Disruptive Innovation is an organization’s weapon used to cope with the arrival of Disruption.
In this era, organizations that want to lead in a disruptive world must use innovation as a guideline in doing business.
But in reality, it was found that many organizations may not understand or may misunderstand about innovation. As a result, these organizations are not successful in creating Disruptive Innovation.
For example,
“Wrong Thinking”
Innovation is not just listening to the ideas of subordinates and selecting the best ideas to use. This is not true innovation because most of the ideas that are selected are the ideas that executives like or see as easy to do or have low risk.
The issue of products or services that are easy to make and have low risk should not be a condition for innovation because if they are easy and not risky, the result is that the products or services that are made will not be outstanding or different in any way when compared to the original or to competitors.
Moreover, sometimes, products that claim to be innovative do not sell because they never pay attention to or understand the needs from the consumer’s perspective.
This is a major problem that arises from misinterpretation of innovation, which causes companies to waste time, money and resources.
“Wrong Metrics”
Innovation is not a business-like process. Many organizations have set up departments specifically to look after innovation, but these departments have to be closed down after a few years.
The reason is that executives use the wrong evaluation method to evaluate innovation units, similar to the evaluation of units in traditional businesses.
Of course, the Innovation Unit in the early stages definitely has no way to generate income and profit in the short term (it will only cost more in the early stages). As a result, this unit is seen as a burden on the organization’s expenses, only using money, and finally having to close down this unit.
The company still has no innovation. It just waits for the day it closes down.
“Wrong Focus”
Innovation is not an additional job or a task for each department or unit. Many executives try to drive the organization towards innovation by having each of their units create an innovation project (perhaps as a special project or an additional goal) with the expectation that these units will be able to help the organization generate more income or profit (reduce costs).
But it has the opposite effect. The chance of disruptive innovation will be very difficult because the original team is accustomed to working in the old way because they are in a working context that requires income, profit or cost reduction in the production process, delivery or distribution. And another important thing is that they need to focus on maintaining the performance level in the original business because it is the main performance that they are measured and evaluated.
That is why various innovation projects have to become unimportant work in the end. Even though in some cases, there may be innovation projects that can occur, it may only be at the development or improvement level because it makes products and services or work processes better, faster, and cheaper.
Therefore, expecting to create disruptive innovation by using it as a deposit job would be difficult.
“Wrong Product”
Many organizations that have a clearly separated Innovation unit produce products that they believe are innovative products. But when they enter the market, it turns out that the market does not accept them, consumers do not understand them, and in some cases, worse, the products do not meet the needs of consumers.
The problem is the lack of understanding and consumer needs. What’s worse is that new products or services don’t sell because they were created based on the opinions of some people in the organization, not from the true needs of the users.
As Bill Burnett, a Design Thinking guru from Stanford University, said, “We don’t see what we are looking at, we only see what we are looking for.” This means that in creating innovation, we will find what we are looking for, but we will not find the important things around us.
This becomes a very big problem in creating Disruptive Innovation because we become accustomed to the image and to what we see, causing us to neglect other important things. Due to the familiarity and familiarity with the context in which the organization exists, it is very difficult to create Disruptive Innovation in the organization.
Therefore, it is impossible to expect disruptive innovation from within an organization.
Design Thinking is one of the processes that plays a major role in creating Disruptive Innovation because Design Thinking helps us find the true needs of consumers, as well as lead the organization on the path of systematic development and innovation.
However, Design Thinking alone cannot help organizations achieve Disruptive Innovation.
It all depends on the executives’ understanding of innovation, how much importance they place on it, and whether they really want Disruptive Innovation to happen.
If the executives’ understanding of these matters is still incorrect, the interpretation of the problem of creating innovation will immediately be wrong, and there is a high possibility that the organization will not have Disruptive Innovation.
In the end, it will just be an organization that follows the trend.
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