1. Disruptive innovations are more affordable solutions created to serve underserved markets  

First of all, let’s clear up this misconception. Do you think every innovation is a disruptive innovation? Well, then you are subject to the widespread misconception. People also often confuse a breakthrough innovation with a disruptive innovation. Disruption is a term that is used too often in the wrong way, as many professionals are confused about its real meaning. So, when can we speak of disruption then?

Disruption occurs when an underserved market is being served, not when just any breakthrough product or technology enters the market. Disruptive innovators often serve a market too small for large corporations to be financially interesting, meaning disruptors tend to be smaller players or separate entities in a firm not tied to corporate KPIs. This underserved market is typically one that is unable to afford the solutions presented to the well-served market, meaning disruptors offer something more affordable and simpler through a game-changing and new business model.  

2. Successful companies start to stumble due to the innovator’s dilemma – they initially ignore disruptive innovation

What is our second takeaway? The innovator’s dilemma, builds upon the first takeaway. Successful legacy companies can start to stumble when they perceive a next-generation product or disruptive innovation as not valuable to their customer base, at least in the early stages of adoption. When this innovation grows in popularity and expands from the underserved to the well-served market, disruptors have already established themselves. They have the early adopter advantage, while legacy companies are at a disadvantage and are sometimes not able to overcome this. Legacy companies are not destined to experience the innovator’s dilemma, however, as there is a way to overcome this phenomenon.

3. The secret to overcoming the innovator’s dilemma is to become an ambidextrous organization

Curious to know how to overcome the innovator’s dilemma? Our third takeaway explains just how to do that. While traditional legacy companies are often unable to overcome the innovator’s dilemma, those who transform into ambidextrous organizations will be up for the challenge. Ambidextrous companies are characterized by separating their company wide KPIs from their innovation unit/department, creating a separate entity that is not driven by these KPIs. In doing so:

• You create an environment that is not limited by sales volume targets and other metrics that inhibit disruptive innovation
• As per definition this type of innovation is characterized by an underserved and smaller market that requires a more affordable solution that will not meet company wide KPIs and targets.

Only when implementing such a separation, your organization can innovate disruptively and overcome the innovator's dilemma, making sure you are at an advantage compared to the competition and better prepare your company for the future.

The time to innovate is now  

Are you yearning for more expertise on this topic? Feel free to reach out to our founder, Stijn van Daele, to discuss the topic of disruptive innovation, or your next growth or innovation opportunity for your business. You can schedule a quick call with Stijn here.  

Different perspectives and experiences are exactly what enable you to think outside of the box and better define what innovation looks like for your company. This is where Stretch Innovation gets into the picture, as our experienced and diverse entrepreneurs can offer you an outside perspective and will help you grow your business by launching your next innovation from A to Z. Together, we ensure that your company remains futureproof.

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