Three Habits of Highly Disruptive Competitors

When a competitive intelligence organization gauges the potential impact of a disruptive innovation, the culture and related factors at the companies responsible for the innovation are an important source of insight. The following series of questions can help illuminate the likelihood that a specific competitor is a disruptive rather than traditional competitor:

1. Is the responsible organization small in size? Smaller companies (or small organizations such as incubators within large corporations) are typically more likely to value a potentially small win enough to pursue the path toward a disruptive innovation.
2. Does pursuing the innovation have limited negative impact on profits? Established companies are often unlikely to pursue innovations that may detract from their key products or services. In fact, most disruptive technologies are researched and abandoned in very large companies before a startup does something similar and disrupts the market.
3. Does the company’s culture support risk taking? Some companies reward employees for taking risks, while others simply punish failure. The corporate traditions and perceptions in this area are vital to encouraging the kind of risk taking that is often associated with developing truly disruptive innovations.

There are some classic mistakes that large companies make when dealing with disrupters that show they are not taking the treat seriously. If you’re hearing these kinds of statements around the halls, then alarm bells should be going off

• Their product is a toy compared to ours
• They have lots of users, but I don’t think those users are spending very much
• Make sure our customers know that their product doesn’t do X
• They’re a fraction of our revenue

In short, if you’re seeing a company that has lots of customers, but your organization has a fundamental lack of understanding as to why anyone would choose them, you’re likely being disrupted.

This blog post is the last of three in a series about detecting disruptive innovation using competitive intelligence techniques. The first entry in the series, “Three Ways to Predict When Your World is About to Change,” describes factors that suggest a trend has the potential to be a disruptive innovation, and the second one, “Three Reasons an Innovation Might Not Move Mountains,” discusses the characteristics of a sustaining (as opposed to disruptive) innovation.

By Sean Campbell
By Scott Swigart