What are Disruptive Technologies?

Disruptive Technologies (sometimes called Disruptive innovation), because of management master Clayton Christensen, this concept is not so much a technical challenge as a marketing challenge. It is a "post-mortem Zhuge Liang" style summary theory, and it is also sufficient to explain the root cause of the ultimate failure of many successful large enterprises. After the theory was put forward, companies guided by this theory achieved greater success. Such cases are not uncommon at home and abroad. But at the same time, it can be observed that failed giant enterprises still follow this theoretical law.

Disruptive technology

Unlike the "disruptive technology" = "disruptive technology" as understood by the general public, disruptive technology does not refer to disruptive technology. Conversely, when disruptive technologies draw attention, mature technologies are often used instead of breakthrough technologies.

These misunderstandings stem from the inconsistency between the meanings of Chinese synonyms and English synonyms. And some people look at the meaning, which also leads to misunderstanding.

If the technology is divided into qualitative change and quantitative change, it can be named "breakthrough technology / breakthrough technology" and "progressive technology", respectively. General technical improvements start with progressive technology and occasionally breakthrough technology.

From the perspective of corporate strategy, there is another division method: Sustaining Technologies and Destructive Technologies. Continuing technologies can be either progressive or innovative. But when destructive technology draws people's attention, it is often not the most breakthrough technology at present, but may be a technology that existed a few years ago (a few months ago).

Why are good companies always struggling at difficult times? Why is it always repeated?

Is the manager not working hard enough? Not smart enough? Not brave enough to take risks? Or is it just bad luck?

If it is for the above reasons, why in the hard disk industry, six structural technological changes, each time, the industry's leading outstanding companies (except for individual ones) always fail in batches? Why did Nokia and Motorola lose in the mobile phone market as benchmark companies?

Three discoveries ^[1]

In the process of management decision-making, we will find six steps that have been staged repeatedly ^[1]

A technology's leadership in the first value network does not imply its status in the second value network.

Therefore, when mainstream customers migrate from the first value network to the second value network, mature companies that fail to detect early and develop in advance may quickly lose out in the competition. Such as Nokia mobile phone business.

1. The resource distribution of an enterprise depends on customers and investors (or the board of directors and directors)

2. Small markets cannot solve the growth needs of large companies

3. It is impossible to analyze the non-existent market. Similarly, human beings can never accurately predict the market direction, so that the enterprise will never be defeated.

4. Technology supply may not be equal to market demand: because technological progress often exceeds the requirements of mainstream customers, or is beyond the ability of mainstream customers to digest, therefore, the products in the current mainstream market will eventually overly satisfy the mainstream market During the same period, due to R & D / production costs, pricing will also be higher than what mainstream customers demand. At this time, although the current performance of disruptive technologies is relatively behind the expectations of the mainstream market, they may become Very competitive. Once two or more products can meet the performance requirements of the mainstream market, customers will refer to other standards to select products. (Remind managers: customers no longer use the original selection criteria! The market has changed) These standards will gradually be biased towards reliability , convenience and price , all of which are areas where emerging technologies usually have advantages (and Advantages of mainstream products under non-mainstream technologies)

The more managers work harder, manage smarter, invest more actively, and listen more carefully to customer suggestions, the more likely they are to fail in dealing with disruptive technologies, in line with "Successful companies fail because of success. The experience and accumulation of the company when it was successful that year. "

Assign responsibilities to agencies where customer needs do exist

To ensure that resources can flow to these agencies, the responsibility for developing disruptive technologies should be assigned to agencies where customer needs do exist.

Survival through suicide. In the past, there were Hewlett-Packard inkjet printers and laser printers, and now Tencent's WeChat and QQ.

Set up an independent small agency

Or acquire many small institutions and let them compete in the market independently, rather than "only adopt a unified approach to competition."

It must be independent, otherwise its resources will be crowded out by other supporting institutions of mainstream customers.

Letting small organizations take advantage of small opportunities is, in some cases, a suitable and appropriate way to deal with "disruptive technology."

Neither of these strategies will "succeed until the market has reached a certain size" or "promote the growth rate of emerging markets". The reason is that the current mainstream customers cannot support the rapid growth needs of large enterprises.

Prepare for failure

Don't run out of resources the first time, because you can't catch the right market direction on the first try.

Among all the uncertainties about disruptive technology, managers can always follow the rule that experts' predictions are always wrong.

It is almost impossible to accurately predict the usefulness and market size of disruptive products.

From this, it can be inferred that due to the unpredictability of disruptive technology markets, the strategies adopted by companies when they initially enter these markets are often wrong. (So, in a sense, the Deming Cycle PDCA has an irreplaceable role-all plans are based on strategic assumptions, and strategic assumptions must be changed based on market changes / technical changes).

Mature companies face double dilemmas: 1) the unpredictability of the future; and 2) it is extremely difficult to move downstream.

The main difference between successful and failed companies is not how perfect their initial strategy is, and analyzing what is the right strategy at the initial stage is not a necessary condition to ensure success. It is more important to retain sufficient resources or Supporters and investors who can count on building a good relationship, so that new business projects can find the right direction in the second and third attempts.

Projects that run out of resources or credibility before turning directions and adopting viable strategies are failing projects.

Be alert:

1. Comparison between failed ideas and failed businesses.

2. Comparison between failed ideas and failed managers: Managers tend to be conservative and enter mature markets, rather than make decisions and take risks to support emerging markets, because discovering emerging markets is necessarily a process associated with failure. At the same time, failure will be a stain on their careers.

3. Comparison of learning plan and implementation plan: Managing disruptive technologies should be a learning plan, not an implementation plan. The following assumptions must be followed: No one-including us, and our customers-can understand whether a disruptive product can be put into use, how it is used, or how much it is before it is actually used. Think of the initial efforts as learning opportunities (paying tuition) and make adjustments after obtaining relevant data.

Don't pin your hopes on a technological breakthrough

Start early and find a market for the current attributes of disruptive technology, and you will find its market outside of the current mainstream market. Moreover, you will also discover that the disruptive technological attributes that are not attractive to mainstream markets are precisely the attributes upon which emerging markets are built.

When an organization encounters change, managers must first determine the first question, "Do we have the resources we need to succeed?" Few managers ask the second question: "Does our organization have the necessary resources to succeed?" Processes and Values, "because instinctively you don't need to ask this question, past success has answered the second question in history.

1. Simpler, cheaper, and lower performance. (Especially when it first appeared and lasted for a while)

2. Profit margins are usually lower and higher profits will not be achieved.

3. The customers who can bring the most profit to the leading companies usually do not use it and do not accept it.

4, first in emerging markets, or in less important markets, put into commercial operation.

5. Most people believe that executives have made important decisions regarding the direction of the company's development and the way in which resources are invested. In fact, the real power lies in the hands of middle managers, who have the power within the enterprise to decide which proposals to submit to senior management. Out of fear of failure, middle managers are more willing to suggest the development of continuity technology rather than disruptive technology.

6. Disruptive technology should be viewed as a marketing challenge, not a technical challenge.

1.The Dilemma of Innovators

2. "An Innovator's Answer"

3.The Gene of the Innovator

Bill Gates: "Every proposal that has appeared on my desk since Christensen's destructive theory has claimed to be 'destructive.'"