With disruption, be careful what you wish for

"Disruption" has become the goal du jour for many organizations today. However, if you really stop and think about it, disruption means eating into one's core business with low-end solutions.  Are the executives pursuing disruption ready for this?

In a provocative new post, Slate's Matthew Yglesias questions the pursuit of disruption in business. In one sense, the term "disruption" itself is being overused to the point it's becoming another "meaningless buzzword," Yglesias warns -- "a 'synergy' for our time."

On another level, disruption -- as defined by Clayton Christensen, author of The Innovator's Dilemma -- isn't the same thing as tacking innovation into an enterprise's portfolio. It means the long-term usurping of an established, money-making, high-margin business line with cheaper, often lower-quality offerings.

Unless they're new entries into a market, how many companies are really ready to do that?

Christensen's classic examples include Digital Equipment Corporation, which was making billions of dollars in the 1980s from selling mainframe and midrange-class computers. The company attempted to get into PCs, but how willing were they to funnel resources away from their bread-and-butter, high-margin business into building small, cheap $1,500 machines? And how would they explain that to shareholders? Likewise, American automakers around the same time ceded the low-end markets to Toyota and Honda with their cheaper cars. But Toyota and Honda worked their way into the high-end market from there.

Many of the companies claiming to be "disruptors" these days are really doing nothing of the sort, Yglesias states. They may be offering better alternatives to existing products, but they are not going after underserved and unserved markets with low-end solutions that will eventually chase existing lines upstream,

So what does disruption mean to today's organizations? Altimeter Group has also been looking deeply into disruption, and posted the factors that define disruption:

• Everything digital: "An increasingly digital landscape – including data, devices, platforms and experiences – that will envelop consumers and businesses."
• Me-cosystem: Includes developments such as "wearable devices, near-field communications, or gesture-based recognition."
• Digital economies: "Open source, social, and mobile platforms allow consumers to connect with each other, usurping traditional roles and relationships between buyers, sellers, and marketplaces.”
• Dynamic organizations: It's not enough to attempt to tack on "disruptive innovation" and hope for results; it means an overhaul of culture.

The bottom line is that "disruptive innovation" means far more than tweaking and improving processes and products. Disruption is an upheaval of the market, often starting from the bottom up. And telling management you intend to disrupt your most profitable business lines can be an act of career suicide, even though the markets may prove you correct 10 years down the road. It takes a special company with a highly open culture tolerant of failure and bold new ideas to be willing to accept this.

This post was originally published on Smartplanet.com