Disruptive Innovation

The Implication of Path-dependence on Industrial Survival

by Klaus Oestreicher

The emergence of new radical technologies demands innovative answers of an established industry. With reference to the... more The emergence of new radical technologies demands innovative answers of an established industry. With reference to the threat of obsolescence, research in the Home Entertainment Industry’s innovation strategies presents a paradigm, which suggests that due to path-dependence, this particular industry suffers from a lock-in effect in its core technology, which is enhanced by deep roots in monocultures of product, infra-structure and client base. Long-term research argues that these three causes effect a holistic lock-in, globally expressed in declining demand. Industrial experts expect the obsolescence of the manufacturing part of this industry in the near future. The conclusion is that the path-dependent innovations made are too marginal for survival on radically changing markets.

Key Words: Declining industry, Home Entertainment Industry, marginal innovation, monoculture, path-dependence

Disruptive Innovation and the Lock-in

by Klaus Oestreicher

Disruptive innovation creates new values, but destroys established industries at the same time. In the 1970s,... more Disruptive innovation creates new values, but destroys established industries at the same time. In the 1970s, Abernathy et al.’s path-breaking research in the automobile industry identified that innovation has two strong forces, technology and market linkages. In the following decades researchers have detected many reasons, why incumbents were unable to find strategies to avoid their obsolescence. No valid and reliable explanation exists yet, as to why established organisations frequently fail, when confronted with disruptive technologies.
Platform innovation on the Internet has emerged as a major contemporary driver for Schumpeter’s concept of creative destruction, which Moore relates in this context to Darwin’s law of the survival of the fittest.
In their struggle for survival, incumbent organisations tend to react in a way, which Redding suggests as technological lock-in. This can be seen as one key for the obsolescence of a number of established industries. Despite empirical evidence supporting this view, it could not explain the full picture of incumbents’ insufficient innovations. I argue that further lock-in effects do exist, influencing organisations’ capabilities to innovate in decline.
Own long-term research argues that three major strands of lock-in effects are essential: Technology, market linkages and a combined organisational and individual experience pattern of managers. The argumentation is that each lock-in is an interdependent cause, effecting an organisational environment, which may result in fatal outcomes.
This argument is suggested as a missing link, which helps to explain the failure of incumbents’ innovation in decline.

Key Words: Lock-in, disruptive innovation, market linkages, path-dependence, captivity

The Social Innovation Process: Themes, Challenges and Implications for Practice

by Fiona Lettice

Lettice F and Parekh M. 2010. International Journal of Technology Management, 51 (1), pp 139-158

The purpose of this paper is to better understand the process of social innovation, as well as exploring what lessons... more The purpose of this paper is to better understand the process of social innovation, as well as exploring what lessons can be transferred from general business innovation theory and practice. We have conducted interviews with ten innovators in the UK who have each taken an unusual approach to a social or environmental problem and created solutions that were initially seen as peripheral and unlikely to work. The interviews were transcribed, coded and analysed to identify recurring patterns in the data. The innovations researched have diverse social benefits and outcomes, ranging from creating employment for the homeless through to designing electric sports cars. The data revealed four themes: changing the lens, building missing links, engaging a new ‘customer’ base, and leveraging peer-support. We also identified techniques to address the problems associated with each theme, including scanning the periphery, taking a reflective and systemic approach, identifying niche segments and joining or creating networks.

SEEDFEED: the Interactive Marketing & Design of a Digital Video Ecosystem

by Joel Flynn

Written for an applied MBA project with Teradici Corporation, Burnaby BC

SEEDFEED™ is an interdisciplinary work that explores the business and strategic use of emerging interaction design... more SEEDFEED™ is an interdisciplinary work that explores the business and strategic use of emerging interaction design (IxD) methodologies for understanding the interactive production, use and value of archives of digital media – i.e. digital ecosystems. It attempts to apply non-traditional IxD methods to a developing prototype of digital, non-professional concert video content, a mix of Standard Definition and High Definition content captured with consumer-level equipment. Through the project’s sponsor, Burnaby’s Teradici Corporation and its PCoIP™ remote video protocol, this archive of recorded live music events will be opened up as an interactive online ecosystem for use in an industry co-op program for digital video production. The project’s goals are to investigate emerging IxD methods as ways to better understand the complex and interactive dynamics of digital ecosystems, particularly their sustainability and the role of disruptive innovations in evaluating PCoIP™’s market potential and marketing strategies for higher education and the entertainment industry.

Innovating User Value: The Interrelations of Business Model Innovation, Design (Thinking) and the Production of Meaning – A Status-quo of the Current State of Research

by Jan Schmiedgen

Masters Thesis - 2011

We live in a hyper-competitive world, where whole industries either shift towards services or become obsolete due to... more We live in a hyper-competitive world, where whole industries either shift towards services or become obsolete due to new market entrants, technologies or even social practices. A world, where permanent interactions with customers, fast time-to-market, and the ability to innovate »right« (e.g. the right thing or value) are the key to corporate success. On that score the business sphere isn't getting tired of emphasizing the need for strategic innovation (which means »creating superior customer value«, business model innovations or even the disruption and creation of new markets).

This paper uncovers some of the often overlooked links of design (design thinking, design- driven innovation and service design) to strategic innovation through the lens of »customer value«. It will do so by ...

1) Disenchanting the big corporate rhetoric on above claims by showing that prevailing and too one-sided understandings of strategy and innovation, rather reinforce than escape old industry paradigms.

2) Examining designs still undervalued contributions to strategy-making by approaching business challenges with a user/value-centric and radical service logic.

3) Showing that every dimension of strategic innovation culminates in the concept of perceived user value and meaning, which gets reviewed in detail (dimensions, forms, proper- ties), especially with regards to constructing value propositions.

4) Arguing that the current service design and business model innovation discourses cannot be negotiated separately, as they may be good methodological complements.

So when speaking about the innovation of value for the customer, the paper argues, the above stated and seemingly separated fields intersect. Therefore their most apparent systemic connections and the facilitation of value creation by design are outlined and discussed.

The Power of "the Few": A Key Strategic Challenge for the Permanently Disrupted High-Tech Homeland Security Environment

by Rodrigo Nieto-Gomez

This article argues for a new organizational approach to homeland security, designed to confront the challenges of a... more This article argues for a new organizational approach to homeland security, designed to confront the challenges of a highly disrupted environment in a more efficient way. Initially, it explains how the accelerating pace of innovation creates a set of homeland security challenges that empower small groups or individuals – "the few" – in new and unpredictable ways. Next, it demonstrates why the current organizational model for homeland security is systemically insufficient to respond to this permanently disrupted environment, despite the best efforts of its members. This is done by dividing the homeland security duties into two distinct missions: an incremental or "systemic mission" and a disruptive or "future shock mission." The current institutional model is seemingly well adapted to respond to the needs of the first mission but ineffective to address the second. Lastly, the article proposes a new homeland security institutional model, better adapted to confront the negative effects of disruption by fostering and harnessing the positive ones. This is accomplished by adapting Alvin Toffler's concept of "adhocracy" to homeland security's needs and using DARPA as an example of a successful "adhocratic" and disruptive security and defense institution.

ASSESSMENT OF INNOVATION: THE GEOMETRIES OF STRATEGY

by Klaus Oestreicher

Innovation as a core driver of industrial development needs careful consideration, since not each innovation holds the... more Innovation as a core driver of industrial development needs careful consideration, since not each innovation holds the same degree of novelty and impact on the market place. Additionally, innovation is too often taken as a synonym for imitation and amongst many authors Trott complains about the ambiguous use of the term innovation (2007). As evidence provided by own research has shown, there is no clear and precise taxonomy for the field of innovation, which is considered a major disadvantage, since the gaining of mutually accepted knowledge and understanding is deprived (Oestreicher. 2011).

An opportunity of assessing innovation arises by using Keidel’s framework of geometries of strategy, in which triangular thinking is considered as the most robust tool of assessment (2010). In a three dimensional approach a variety of determinants can be used, but three logics seem to be favourable, when considering the following research findings (Keidel. 2010):

§ Dimension 1 Collaboration: Innovation is rarely an isolated novelty, usually it consists of inputs of various parties (Hargadon. 2003); innovation consists (frequently) of product/service, infrastructure and ecosystem (Adomavicius et al. 2008).
§ Dimension 2 Autonomy: Innovation is formed by two forces, technology and market linkages leading to the thesis that any commercial innovation in technology is ultimately only as good as its impact on the marketplace (Abernathy et al. 1983, 1984).
§ Dimension 3 Control: Control can represent various meanings; one of the explanations is presented by Christensen et al. in their resources, process and values theory, another explanation is market control, which is executed by domination or patents [e.g. domination by Microsoft applications or industrial control by Sony with its patent of the Blu-ray technology] (2004).

Oestreicher and Oestreicher et al. have presented their research findings in two earlier papers, which addressed the Home Entertainment Industry as an exemplary study about product failure with regard to the jobs-to-be-done theory and why – due to the TRIZ theory – the Blu-ray disc is not the Ideal Final Result for the consumption of Home Entertainment content (2009, 2010, Christensen et al. 2004, Domb cited in Oestreicher et al. 2010). The research presented in this paper is based on this earlier argumentation. It constitutes a concluding assessment of the Home Entertainment Industry’s innovation, or better survival strategies in its battle against the disruptive invader presented by new entrants into an established market. With reference to its present structure we use data collected in a long-term qualitative research for the assessment that managers of the Home Entertainment’s replication industry made substantial strategic mistakes, which will, as even industry insiders expect by now, lead to this industry sector’s obsolescence in the near future.

With regard to the assessment of innovation, as interviews state, the replication industry has missed the opportunity to innovate itself.

The geometry of strategy provides a research-based three-dimensional insight into the problematic of fighting with marginal tools against a radical invader. Keidel’s strategy framework is extended by Kim et al’s framework of conventional logic and value innovation logic offering a denser assessment particularly with regard to market impacts (2010, 1998, 2005).

Key words: Geometry of strategy, innovation assessment, conventional logic, value innovation logic, Home Entertainment Industry, path-dependency

Converging Technologies: The Future of the Global Information Society

by Christopher Altman

First Committee chair report to the UN General Assembly, RSA Information Security Award for Outstanding Achievement (2004).

"Christopher Altman, Chairman of the UNISCA First Committee on Disarmament and International Security, was recently selected as recipient of the RSA Information Security Award for Outstanding Achievement in Government Policy for his report to the General Assembly, "Converging Technologies: The Future of the Global Information Society."

"The RSA Conference and Awards is the world's most prestigious international information security conference for organizations that deploy, develop or investigate security or cryptography."

"Previous RSA Keynote speakers and Awards Recipients include Bill Gates, Microsoft Corporation, US Congressman Tom Davis, and Richard Clarke, former White House Security Advisor. "

The complex web of the global information grid will undergo explosive changes over coming decades. As advances in... more The complex web of the global information grid will undergo explosive changes over coming decades. As advances in science and technology converge, a myriad array of discoveries in biotechnology, nanotechnology and information technology will produce unpredictable effects that must be accounted for in any estimate of what the world will look like in this future. A strategically important feature of this world will be the emerging trend of information warfare. Though still immature at present day, this trend will become increasingly dominant in the years to come. The information warfare of tomorrow will be radically different from its prototype today. No longer will it be confined to the mainframes of the Internet or to corporate databases: the battleground of the future will draw into its scope the scientific advances being made today in bio and nano technologies. The divisions between man and machine will blur. When networked technologies are ubiquitous, a state-sponsored attack on electronic networks can have far-reaching, and devastating, physical consequences.

Disruptive Innovation Explored

by Fiona Lettice

Disruptive innovation is a term used to describe innovation that is of highly discontinuous or revolutionary nature,... more Disruptive innovation is a term used to describe innovation that is of highly discontinuous or revolutionary nature, which is the opposite of evolutionary or incremental innovation. The term is becoming more widely recognised, but a consistent view of what disruptive innovation is or how it is defined is missing. This paper explores the different dimensions of disruptive innovation put forward by different authors and
proposes a working definition as a key building block for an European Commission (EC) co-sponsored research project (“DisruptIT”). The working definition will be used to guide the development of the tools and methods that will help organisations enable and manage disruptive innovation as a key competitive strategy.

Allocating Resources to Disruptive Innovation Projects: Challenging Mental Models and Overcoming Management Resistance

by Fiona Lettice

This research, based on four in-depth case studies, probes an overlooked unit of analysis in innovation management... more This research, based on four in-depth case studies, probes an overlooked unit of analysis in innovation management literature, namely management action and cognition, and offers a new qualitative contribution into resource allocation approaches that support radical innovation. The interpretivist approach revealed that a management team’s resource and path dependencies and prevailing mental models underpin resource allocation routines, which prevent managers from pursuing radical innovations. Of particular interest, were innovations that disrupt and re-shape the exiting terms of economic engagement in established industries. It was found that managers with restrictive mental models will adopt up to five disruptive innovation rejection strategies: rewarding incrementalism; ignoring the positive aspects of disruptive innovations; focusing on historical perceptions of success; creating perceptions of success with high effort; and holding beliefs in the face of disconfirming information. Initial longitudinal data suggests that rejection strategies can be overcome with holistic portfolio approaches.