A Common Sense Argument for Disruptive Innovation

Monday, 15 July 2013 06:30
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Greetings!

I recently read Kevin McFarthing's excellent essay arguing for the merits of incremental innovation: http://www.innovationfixer.co.uk/content/lets-hear-it-incremental-innovation.While Kevin wasn't arguing against disruptive innovation, he did make a sound argument that (I'll use a sports analogy) a series of "singles" can contribute to scoring runs and putting points up on the business scoreboard...while still contributing positively to customer experience.

He's right, of course. Still, I think it's important to be reminded why disruptive innovations can be of tremendous and even longer lasting business value and should remain an important strategic consideration.

Curious to learn more? Read on, dear friends.

A Common Sense Argument for Disruptive Innovation

While walking through my neighborhood grocery store, I spied a water flavoring product conspicuously similar to Kraft's Mio product on display under the store's brand. How could this award winning innovation have migrated so quickly to a private brand execution?
 
Walmart's Mio knock-off, one of the first in the market, has been described unflatteringly by some as a blatant case of reverse engineering. Others have since followed. While Kraft has quickly built a reported $200+MM brand behind its Mio platform, I imagine it still must be discouraging for them to have invested substantial resources to develop the product and launch it only to enjoy such a seemingly brief window of exclusivity before knock off artists began to chip away at their market share.  
 
While strong IP can provide developers with some measure of protection, some patents are more easily circumvented than others. The time period between product launch and the appearance of seemingly credible knock off intros is becoming increasingly brief, often within a year. Knock off artists are finding ways to emulate the first mover and to capitalize on the awareness and goodwill they have built during the launch period, even if their quality is somewhat lower.
 
Without commenting upon the technical complexity of Mio's development (I don't have this specific knowledge, and I also accept that it was as much a marketing innovation as a technical one), the execution, in a broad sense at least, strikes me as more vulnerable to competitive technical copying than say, Tide Pods, or Seventh Generation's compostable bottle. I have not observed credible technical knock offs of these two products as yet, which could support an argument that they represent disruptive innovations, which are more challenging to emulate and importantly, have the potential to fundamentally change the competitive playing field. As such, this should also provide these brands with a longer time window in which to reap the harvest of their respective innovation investments.
 
Net, incremental innovation can be smart as part of an overall product and brand strategy. Well executed disruptive innovation often represents a bigger bet for a company, with considerably greater risk, but with the potential for a larger and more sustainable return on investment.

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