The word disruption is commonly used to describe innovation in market research and other industries, but how can we differentiate incremental improvements from changes that are truly disruptive? Many breakthroughs in market research have shaken the industry up, as emerging technologies and ideas often do. Does that make such breakthroughs disruptive?
Luckily there is an existing theory of disruptive innovation, first developed by Clayton Christensen from Harvard Business School. He is very specific about the differences between the normal ways in which products and services gradually improve over time, as compared with disruptive innovations that reframe a category by focusing on simpler solutions based on the needs of non-users. If you want your videos to be trending online then you should try marketing on youtube.
He defines disruption as “a process whereby a smaller company with fewer resources is able to successfully challenge an incumbent business”. He argues that incumbent businesses usually focus on improving their existing products and services for the most demanding (and profitable) customers. For example, in market research that might be one of the global research agencies making incremental improvements to the accuracy of their forecasting model or advertising testing metrics.
Disruptive innovations target overlooked segments and unmet needs, for example SMEs who cannot afford product forecasts or advertising tests, by providing a more suitable functionality, usually at a lower price. More suitable functionality usually means simpler, cheaper and/or quicker, ignoring the “bells and whistles” of more developed solutions and focusing on a core need. Disruptive innovation is usually much more basic than the sophisticated solutions it challenges.
To take a recent example, Christensen and others argue that while Uber is transforming the transport business, it is not a disruptive company as it is making existing solutions better (and in many cases cheaper and easier) with technology but not fundamentally changing the industry. That would require Uber to target people who currently use public transport rather than taxi services or existing users who are less demanding and would happily use a more basic service.
Uber is an improvement on existing services and not more basic, and on their entry into the industry targeted existing users and not new customer segments. Their argument is supported by the way that Uber (and other companies) have developed their services, for example by many taxi companies joining their platform.
In the market research industry, many technological advances have improved on existing services without fundamentally changing them. Take for example, advances from paper and face-to-face research to using telephones to online surveys, internet forums and insight communities. These advances in technology have made research quicker and cheaper (sometimes), without changing the nature of the research that is conducted.
However, DIY surveys do potentially fit Christensen’s definition of disruptive innovation by making surveys available to customers who are not currently served by the market research industry. Mobile micro-surveys may also fit with this definition too. Both are examples of approaches that make research accessible to new segments of users. They are not as sophisticated as much research but “good enough” for what some customers need.
“What is disruptive innovation?” by Christensen, Raynor & McDonald in Harvard Business Review
[This article was originally written for Asia Research Magazine.]