Binomial Innovates -
Binomial is an innovation consulting firm helping clients be disruption-ready
April 14, 2020
“People are usually afraid of change because they fear the unknown. But the single greatest constant of history is that everything changes.” ― Yuval Noah Harari, Homo Deus: A History of Tomorrow
We are accustomed to a life that is fast-paced. Innovative ideas are springing up all across the world. New products and services are being rolled out. There’s news about a tech startup ending a new round of funding every day. Hugely enabled by technology, the constant change happening in our world has become faster and wider to the extent that we easily overlook its impact — because change has become the new constant. Change can be either small or huge. When a change alters the way things normally work on a fundamental level, we say it’s a disruption.
Moore’s law explains it well. Named after the co-founder of Intel, Gordon Moore, the law states that processor speeds or the overall processing power for computers will double every two years. There have been periods when the exponential technological advancement has been shorter than a 2-year span (However, even Moore’s law is facing stagnation, and potential ground-breaking change may come to chip design: see the article here for more details. Still, change always happens!).
Our adoption of technological devices showcases the accelerating speed of technological change. From clicking to touching, from black-and-white pixels to high-quality display, from heavy desktops to palm-sized smartphones, all of the amazing progress took less than a hundred years. Do you still remember the first personal computer that you owned? It would be hard to imagine the days when a computer machine took up the whole room when nowadays access to mostly any information is sitting inside our pocket. There were doubts about these disruptions, of course, like this one:
“I think there is a world market for maybe five computers.” — Thomas Watson, president of IBM, 1943
Speaking of smartphones, it has become a norm that new models and generations are launched by brands every year. Doing a simple search of “new smartphone models” on Google can lead you to an overwhelming ocean of reviews and best-buy tips, while consumers seem to never escape from terms such as “plus”, “pro”, “wide” and “ultrawide”.
Accenture’s Disruptability Index 2.0 looked at 18 industry sectors during 2011 and 2018 to decode the disruption landscape. The result is unsurprising: most industries are either experiencing disruptions or are vulnerable to it. Meanwhile, the duration and levels of disruption have both increased since 2011, which proves that disruption is indeed the new constant.
Even the traditionally hard-to-change industries are undergoing noticeable change. Look at the healthcare industry. On one hand, in 2019, there were 39 digital health startup unicorns that reached a combined worth of $92.8B. On the other, big tech companies are also not foregoing this golden opportunity to disrupt a market that is sensitive and heavily regulated. Microsoft is trying to win its place in the healthcare cloud market. Apple is pushing its continuous effort on wearables to tackle personal health. Alphabet is utilising its AI expertise to drive precision medicine. Amazon is building its strength to disrupt the pharmacy, virtual care, and telehealth sectors.
Are disruptions perceivable? The short answer is yes. The long answer is that it requires a holistic view of the market and the business landscape. Here, we introduce two ways to look at disruptions that could potentially give you some insights about how you can view your business. One focuses on the lifecycle of products, while the other looks at it from a customer segments perspective.
Also referred to as the technology life cycle, innovation S-Curve depicts the different levels of maturity of the industry/product. Generally, there are four phases in every S-Curve: Introduction, Ascent, Maturity, and Decline. Disruption emerges in the mainstream when the previous S-Curve enters its Decline phase. From the Maturity stage to the Decline stage, much of innovation is process innovation, when competitors try to steal the user base from each other by making things cheaper. This signals a void that disruptive innovations can fill, which is the second way to look at disruptions.
Introduced by the great business thinker Clayton Christenson, the Disruptive Innovation Model describes how solutions that seem undesirable or even inferior first in the view of the mainstream market can gradually ascend and disrupt the high-end market. They start by targeting the low-end market, which is often overlooked by the upper-market incumbents. Once they entrench themselves in the low-end market, the disruptor’s continuous improvement in performance allows it to quickly climb up and shake up incumbents’ dominance.
With the awareness that disruption is the new constant and there are systematic ways to look at it, what can companies do to be disruption-ready? We offer three concise tips that should stand the test of time:
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