The Innovator’s Manifesto: Deliberate Disruption for Transformational Growth
By Michael E. Raynor
Michael Raynor, who collaborated with Clayton Christensen on the development of the theory of disruptive innovation, extends its use to predict the future, better understand the past, and prosper in the present in his new book, The Innovator’s Manifesto: Deliberate Disruption for Transformational Growth. In doing so, he seeks a wider audience for disruption theory, by showing how entrepreneurs can use it to shape their ideas and strategy, managers can use it to identify or create new opportunities, and merger and acquisition specialists can use it to pinpoint targets. An audience he does not specifically identify is management professors, a group for whom his rather academic prose seems more particularly appropriate and, in some ways, to whom the book seems directed.
The core of Raynor’s case for disruption theory’s predictive power is a study of Intel’s New Business Initiatives (NBI) group, whose job it is to investigate opportunities far afield from the company’s current operations. In it, disruption theory proves to be a better predictor of new venture success and failure than other approaches. This result was confirmed in a follow-up study in which MBA students were given business plans drawn from venture capitalist pitch decks and asked to use different approaches to predict what happened to the companies. Once again, disruption theory proved to be the best predictor of future success.
Raynor shifts from prediction to explanation by showing how the success of Southwest Airlines is better explained by disruption than the alternative “low-cost carrier” thesis, derived from Michael Porter’s work. Southwest, suggests the author, pioneered a new frontier, using an “enabling technology” that powered a new business model, as opposed to simply repositioning itself on the cost-value curve. Incumbent airlines were unable to respond because although they could change their strategies, they could not change their business models.
An enabling technology is the key difference between a disruptive innovation and a niche solution, such as a low-cost strategy. Holiday Inn and the Four Seasons hotel chain, for example, are niche strategists or “pseudo-disruptors” because they identified specific trade-offs that travelers are willing to make, but did not develop enabling technologies. The growth prospects of pseudo-disruptors are much more modest than those of disruptors, such as Wal-Mart, which developed a unique distribution technology that retailers like K-Mart and Sears, Roebuck could not match.
Raynor illustrates the application of disruption theory in the here and now with the interesting example of SEDASYS, a computer-controlled medical system for sedating patients developed by Johnson & Johnson (J&J) that can improve recovery times and practitioner productivity. The SEDASYS development team deliberately pursued disruptive innovation by targeting gastrointestinal procedures, but found it difficult to displace the anesthesia professionals (APs) already working in that area. So instead, they succeeded by focusing on market sub-segments in which APs were not established.
The J&J example lends an ecological flavor to disruptive innovation and serves as a helpful reminder that innovations rarely spring forth fully-formed: the development process and experience can have an important impact on the outcomes. As Raynor suggests, experience and thought informed by disruption theory would seem to be a promising way to make your own luck.