False Strategic Desire For Novelty
You don't need to be disruptive to be successful
I have two friends. They are very different. One of them is a co-founder and CEO of one of the largest private companies in their industry. Another one is a physiotherapist.
Both are successful. And they have one thing in common.
The first one founded his manufacturing company with his roommate almost 30 years ago. Now they own more than 40 factories in 9 countries. They produce insulating materials for construction. When they began, they had two product groups in their lineup. Now, 30 years later, they have six. And he believes it is more than enough.
They are market leaders because of their exceptional efficiency. They can offer their customers both perfect quality and low prices. And he believes that if he decided to widen their product range, it would have been difficult for them to keep such a high level of efficiency.
The physiotherapist is not a millionaire. He works in a local hospital, but he is so popular that people must wait weeks to see him. His professional repertoire is also quite limited. But he's so good at what he does that he doesn't need more.
When I conduct strategic workshops, business founders often get upset if their teams don't invent something groundbreaking, another "game changer" or "big thing. "They believe that strategy implies disruptive innovation.
But does it?
You can survive without disruptive innovations
Apple has been criticized for not having disruptive ideas since Steve Jobs's death in 2011. It doesn't mean the company stopped innovating. On the contrary, every new iPhone generation works faster and offers more features than the previous one. But these devices don't change the world. And nevertheless, in 2022, Apple became the most valuable company in the world once again.
Innovation is essential. You can't sell the same device, piece of furniture, or software year by year. You need to upgrade your products and add some useful functions. But disruptive innovation is a fad created by the media.
According to Statista, there are an estimated 334 million companies worldwide. It's safe to assume that most of them are successful enough to keep working. How many of them have ever deserved an article in Forbes or Fortune? Few of them will ever experience the thrill of victory through disruptive innovation. And there is nothing wrong with it.
Five stakeholder groups
Any company must fulfill the needs of five groups of stakeholders:
Customers
Employees
Shareholders
Business partners
Society
So, if a company does it well, if the company's leadership knows how to increase value for these five stakeholder groups day by day and has a strategy, disruptive innovations are not an end in themselves.
Disruptive innovation brings a lot of risk along with great opportunities. And not always a company that invites a technology benefits from it.
1. In the 1970s, Xerox PARC (Palo Alto Research Center) developed the first computer mouse and demonstrated its potential as a convenient input device. However, Xerox failed to assess the potential of this technology and commercialize it adequately. As a result, other companies such as Apple and Microsoft incorporated the mouse into their computers and earned significant profits from this invention.
2. Kodak, a leader in analog photography, developed the first digital camera as early as 1975. I believe you know the end of the story.
3. Nokia was a leader in the mobile phone market and had technologies that could have formed the basis for smartphone development long before they became popular. However, Nokia focused on traditional mobile phones and failed to adequately adapt to the rapidly changing trends in the smartphone market.
So, sometimes to keep walking is better than trying to walk fast.