Managers know their companies must grow. Investment capital is not easy to come by. Firms are reluctant to take risks. Your clients are economically stressed.  Growth is hard, especially given today’s economic environment. Today’s managers have a problem. The status quo is not acceptable. They need innovative thinking to change the game. But not all innovations are the same. Sustaining innovation targets existing, high-end clients or customers demanding better performance than previously available. Disruptive innovation helps create a new market and value network. The types of innovation that you require will depend on the circumstances.

Established competitors usually win competitive battles over sustaining technology. Year over year they grind out incremental improvements. On occasion, they develop products that leapfrog beyond the competition. It doesn’t matter whether the innovation is technologically advanced. This strategy works for the incumbents because it results in better products that they can sell for higher margins to their best customers. Established competitors have the resources to maintain a pipeline of sustaining innovation. For many incumbents, sustaining innovation is like fixing defects – a cost a business as usual.  But even for masters of this approach, there can be times when sustaining innovation is not enough. Customers or clients and the business environment may change (e.g., COVID) requiring managers to reassess their business models. 

Disruptive Innovation

The term “Disruptive innovations” means inventing or reinventing business models. A technology that enables market disruptions is a disruptive technology. It is the business model and not the technology that enables and creates the disruptive effect. The market is the thing that is disrupted by innovation.

To change from sustaining to disruptive innovation, your focus should not be on the product or service currently being delivered. Rather, your attention should be redirected to the clients’ needs that the product or service attempts to meet. Disruptive innovators significantly alter and improve a product or service in ways that the market did not expect. This is innovation by thinking outside the box of existing product or service offerings. The effects of your successful disruptive innovation can be seen in two dimensions – the market structure and the product features. By discovering or segmenting a  new category of customers or clients, the innovator disrupts the market structure.  By altering the product or service features and quality the innovator disrupts industry cost structures.

Disrupters tend to focus on getting the business model, rather than merely the product, just right. Usually, this requires a maniacal focus on clients’ needs. Market segmentation then proceeds not merely on the basis of demographics, but also using psychographics based on clients’ goals in a particular context. As Zig Ziglar once opined, “You can have everything in life you want, if you will just help other people get what they want”. By market segmenting on the customers’ or clients’ needs, and the contexts in which those needs arise, marketing messages can be more precisely delivered.   By refocusing on the customers’ / clients’ needs and context, new technologies or processes for satisfying those needs can be developed. To change from sustaining to disruptive innovation, you first need to resegment the market based on your clients’ needs and context, before working through the solution details.

Your first step to change from sustaining to disruptive innovation, then, is capturing the clients’ needs in a clear, unbiased, problem statement. Talking to clients and customers can provide insight into their perceived needs. Your discussions here are, unfortunately, often biased. The inherent bias comes from many sources – existing offers in the market, the clients’ or customers’ world view, etc. Additional observation approaches can help to develop a broader perspective. Refining these inputs into a  clear problem statement can be a challenging, often iterative process. The iterations happen in conversation with clients or customers, but also in the analysis with reframing perspectives on the observations. With business model innovations, in particular, iterating through technical, legal, and business perspectives, can provide a broader perspective on the clients’ needs and context.

We can help!

Framing and reframing the problem from different perspectives can enable you to see past constraints. These constraints may not exist from a different perspective. Developing a client-centric, solution-agnostic problem statement can enable the needed creative thinking. You need a broader perspective of the clients’ problem to expose a wider variety of potential solutions. Our free Guide to Writing Problem Statements can help you get your clients’ needs problem statement right.  

Whether you are a researcher, business professional, or social entrepreneur, the solutions you develop to the problems that you face matter!  We’d like to hear your thinking on the most important challenges so you can think outside the box for your clients. We have a brief survey that should take less than 2 minutes of your time to complete. You can start right away by going to this link. I look forward to sharing these insights and resources with you.

A course on the use of perspective to refine problem statements is now available.

  Problem Perspectives Course

If you need help bringing the power of perspective to your clients’ needs problem statement contact me.

There is an episode of the vintage TV show “I Love Lucy” where Lucy works wrapping candies on an assembly line. The candies keep coming closer together as the line speeds up. Lucy, and her sidekick Ethel, scramble harder to keep up, though they keep getting further behind. Then Lucy finally says, “I think we’re fighting a losing game”.  Your business initiatives may have you feeling like that – working harder and harder to keep up rather than working smarter. In Lucy’s case, the increasing assembly line speed had some comedic value. It is no laughing matter, however, if your business initiatives are not seeing the results you need. Increasing costs (e.g. effort) and reduced value (e.g., customer traction, efficiency) are signs that it is time to change the game.

Automating a broken process (like Lucy’s) just accelerates the costs. Rather than fighting a losing game, recognize that it’s time to change the game to one that you can succeed at.  Analyzing your broken process may not help if you are working on the wrong problem. In every sector and region, reshaping our world,  are disruptive and innovative game-changers. These may be start-ups or larger corporates, or even social entrepreneurs. They are ambitious, stretching vision with enlightened purpose. Gamechangers see markets as kaleidoscopes of infinite possibilities, assembling and defining them to their advantage. They find their own space, then shape it in their own vision. Most of all game-changers have great ideas. They don’t believe in being slightly cheaper or slightly better. They out-think their competition. By thinking bigger and differently, game-changers are solving a different, better, problem to their competition.

Game-Changing : not just for sports

Lucy’s assembly line, and the sports arena, are not the only place game-changing plays are made.  Through innovation, and strategic vision, we can change the game in business deals, in our career, in relationships, and more. In the non-profit world,  “changing the game” can enable a path to relief for those that need it most. When we articulate the game we are playing, we can examine further with questions like, “what are the rules of this game?”, “how am I keeping score?” “Is this game serving the needs of my clients and myself?”

 Consider this thought experiment – suppose a  new entrant (e.g., a startup) is competing against an incumbent  (e.g. a large company). If the new entrant decides to offer the product (or some part of it) for free, (e.g., as open-source software)  and chooses to monetize its customer base through some other business model, this changes the rules of the game. Such action with a radically different business model changes customer perceptions. Thus changing the marginal return from existing competencies that the incumbent has. This reshuffles the market: winning no longer requires greater competencies along the status-quo dimension,  some new competitive dimension becomes the measure that determines the winner. In this new game, the existing incumbent company might have no real advantage compared to the new entrant.

Be the game-changer you need to see

The business model is just a type of model, and may not accurately represent the needs and purposes of your business stakeholders and most importantly, your clients. All models are wrong, but some are useful, (according to George Box). What is the model surrounding your business challenge? The rules are you are playing by? Parameters you think you need to follow? What beliefs do you have about the Client’s situation?  What would happen if you reversed or changed the old model’s beliefs? Is there a better foundation or structure or perspective would better serve your goals? your clients’ goals? What new perspective feels empowering? Whenever you feel stuck, see if you can’t find a new, more empowering perspective, and a bigger opportunity to serve your clients.

It’s easy to get distracted by the tools and processes in your current environment. This is especially true when you need to keep the current business running while finding a better way forward. But you won’t be thinking differently if you just focus on the same old tools and processes. Such a focus leads to merely incremental rather than disruptive innovation. To avoid such issues, a clearer statement of your client’s problem is needed before attempting to solve it.  Our free Guide to Writing Problem Statements can help you get your client program statement right.  

We can help you change the game

Whether you are a researcher, business professional, or social entrepreneur, the solutions you develop to the problems that you face matter!  We’d like to hear your view of the most important challenges in writing problem statements for your clients. We have a brief survey on the most important challenges that should take less than 2 minutes to complete. The survey takes less than 2 minutes and you can get started right away by going to this link. I look forward to sharing these insights and resources with you.

A course on the use of perspective to refine problem statements is now available.

  Problem Perspectives Course

If you need help bringing the power of perspective to your client problem statement contact me.