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By Wes Ball. Wes is a strategic innovation consultant and author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success (Westlyn Publishing, 2008) and writes for Leadership turn every Tuesday. See all his posts here. Wes can be reached at www.theballgroup.com.
Why can’t every innovation be “disruptive?” Why can’t more companies come up with disruptive innovations? And why is it that many innovations that are disruptive only lay the groundwork for another competitor to take control and become the leading innovator?
I believe the answer is in the focus we place upon innovation.
All useful innovation starts with an idea that addresses an unmet functional need. Without that initiative, the idea will have little value to customers. ”Good” innovations also create future growth potential by pointing the way to a “thread” of future innovations — a logical progression of innovations that build upon and improve the original innovation. Those that change the way much of an industry works are considered to be “disruptive.” But the most desirable innovations also allow the original innovator to maintain control over the innovation “thread,” rather than just creating opportunities for many other competitors, who may take control and become the leading future innovator. Maintaining control ensures the innovation thread will be sustainable for the original innovator.
Harley-Davidson was able to achieve this—until recently, no other competitor was able to overcome the hold H-D had on customer aspirations.
Apple may have with its iPod and iPhone. In fact, Apple seems to be making its innovation thread expand to encompass its entire product line with new products like the MacBook Air that share many of the characteristics of both the iPhone and the iPod.
BMW and Mercedes have been able to do this, as well.
In fact, most companies I refer to as Alpha companies do this to some extent, although most could do it even better.
We are talking about much more than functional innovation or branding or advertising or new distribution models or any of the typical things innovators might think to use to expand attractiveness and build loyalty and longevity to their innovation threads. We are talking about things that go beyond the traditional factors addressed in innovation, yet create significant and dramatic shifts in loyalty, aspiration to purchase, and willingness to pay more to own.
Almost any smart group of people can come up with a potentially disruptive idea that addresses unmet functional needs. Customers are certainly under-satisfied in most categories. The key is in understanding how to make that innovation yours, and not something others can improve upon, taking the lad away from you.
Here’s the problem: innovation is almost always too focused upon functionality, price, and delivery of benefits rather than the real core factors that create long-term, sustainable success.
What if Apple had decided to introduce the iPod in a traditional way, using functional performance as the sole innovation criteria? It still would have been new. It still would have made getting and listening to music easier and more “personal.” It still would have had iTunes. It still would have been a breakthrough that changed the way people buy and listen to music. It still would have made Apple the initial leader, but almost any competitor could have come out with a cheaper and perhaps better performing product that would have put Apple on the defensive. And isn’t that what we see happening to too many “good” ideas?
Luckily, Apple did not stop there. It also made its product with visual and tactile appeal — a seemingly superfluous addition, but the key to generating ego-satisfaction: the real key to sustainability. With those ego-satisfaction factors, it has been able to hold off numerous attacks and charge significantly more.
The “intelligent” cell phone is another great example. Blackberry was really the disruptive leader. Apple, however, “improved” upon it with ego-satisfaction factors that gave them the real leading position. They now have the opportunity to control the innovation thread from this point forward, IF they protect what got them there. The iPhone’s functionality was different, but not really “better” than that of the Blackberry. It just appealed to the ego-satisfaction side better and more fully that RIMM’s Blackberry product did. Now Blackberry, the original innovation leader, is on the defensive.
Alpha learning shows that disruptive innovation is only of value to the originating innovator, if ego-satisfaction becomes part of what is “proven” by the functionality of the disruptive innovation.
Every human needs three sets of things: physical minimums (safety/security), a sense of being cared for and valued (affection), and a purpose for being. For purposes of innovation, the Alpha model breaks them into Function, Self-satisfaction, and Personal significance. The reality of life is that humans cannot fulfill the satisfaction and significance elements easily, because they are typically based upon how they feel about their interactions with other people.
By understanding and focusing upon fulfillment of emotional satisfaction and personal significance, however, once functional performance has reached at least the minimum level required, the Alpha innovator dramatically magnifies the impact and value of innovation.
The result? Control and dominance over the future thread of innovation. After all, what good would be a disruptive innovation that just gets taken over by a competitor?
Don’t misunderstand: this is not suggesting that functional innovation is a waste of investment. You cannot create sustainable innovation by only addressing ego-satisfaction. It is just the way you dramatically enhance whatever innovation you create. It is also the way to filter ideas to make sure they will be sustainable, whether they are truly disruptive or not.
Almost all of the disruptive innovations we can think of are most obviously functional innovations. But the innovations that will really make your company’s future (and do it at the lowest initial and on-going investment) will come from adding the ego-satisfaction element to them. Such innovation is truly disruptive, because it changes everything in your favor, while competitors wonder what happened. In fact, in most cases, competitors are caught flat-footed for months, because they can’t understand what you even did to create such successful change. They are looking at the functionality but miss the ego-satisfaction elements as the really critical ones.
It also doesn’t just create a new functional solution that everyone can copy or improve upon. It creates a highly-defensible platform from which you can control much or all of your category, while competitors scramble to even come in second.
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