Big-bang innovators aren’t necessarily your competitors, nor are they actively seeking ways to better your prices or performance – “they’re just tossing something shiny in the direction of your customers, hoping to attract them to a business that’s…different from yours”. When Jeff Bezos, the founder and CEO of amazon.com, entered the book business, he did so because books were a rational choice – not his expertise. Internet retailing fitted this fragmented market well because of the huge number of SKUs; small, easy-to-ship items; and a stable supply chain.
Big-bang disruptions differ from conventional innovations in three ways:
(1) Strategic Discipline: Conventional wisdom: Focus on a single strategic “discipline” or “generic strategy” – low cost, product innovation, or customer intimacy; Big-bang wisdom: Compete on all three generic strategies simultaneously.
(2) New Product Marketing: Conventional wisdom: Target a small group of early adopters initially, then enter the mainstream market; Big-bang wisdom: Market to all segments of users from the outset. Be prepared to scale-up – and exit – rapidly.
(3) Innovation Method: Conventional wisdom: Look for innovations in lower-cost, feature-deprived technologies that meet the needs of underserved market segments; Big-bang wisdom: Look for innovations in quick-fire, low-cost experimentation on well-known platforms.
To survive Big-Bang disruption: (1) Learn to recognise the warning signs is key to survival; (2) Try to ensure that disrupters can’t make money from their inventions until you’re ready to acquire them or you can win with a product of your own; (3) Prepare for immediate evacuation of current markets and be ready to get rid of once-valuable assets; (4) Diversify - make sure future strategies are built on a platform that can easily be extended and experimented with, and quickly scaled both up and down.
Action Point
To amplify the impact of big bang disruptors develop the ability to quickly learn the new rules of unencumbered development, unconstrained growth, and undisciplined strategy.
Source: Downes, L. and Nunes, P. F. (2013) Big-bang Disruptions, HBR, March; and Christensen, C. M. and Overdorf, M. (2000) Meeting the Challenge of Disruptive Change, HBR, March-April.