Managing disruptive technologies


Disruptive Technologies are changing business landscape and large well established companies are finding it increasingly difficult to deal with powerful new technologies. In a classic disruptive technology scenario a firm introduces a product that has features that appeal to a niche market and sells for a lower price. As the new product develops it becomes more competitive in the established market and is in demand, eventually leaving the established product obsolete.

Technologies like Wi-Fi, VoIP, Blue Tooth, ZigBee and WIMAX have the potential to bring globalization to developing nations. Consider the case of WIMAX (worldwide inter-operability for microwave access) which was used to make the remote, mountain clustered island of Mauritius the first ‘unwired’ nation in the world. Due to the country’s rugged terrain traditional solutions like DSL could not be used. Therefore two well known companies have collaborated to put in place coast-to-coast wireless internet access.

The best way to go about innovating for disruptive technology is to visualize concepts and the demographic or geographic niches across the globe that really need them. The case of Inveneo, a not-for-profit organization is a good example. Its innovation a bicycle powered system brings not just VoIP but also e-mail and web browsing to remote areas like Uganda.

The need for creative thinking is vital while managing disruptive technologies. That means creativity both at a strategic level and also on the front line from administration to true entrepreneurship. Businesses will become obsolete if they do not remain innovative. Businesses require ‘Intrapreneurs’ people within a large corporation who take direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation.

The need for entrepreneurial development is an important factor in ensuring the survival of the company. Thirty percent of large companies now provide seed funds that finance in-house entrepreneurial efforts. For example Intel established an in-house ‘new business initiative’ to fund new businesses that employees propose regardless of whether the concepts have anything to do with Intel’s core chip making business. Another example is 3M which encourages internal competition and duplication of resources. Failure is not punished. A flat organization freedom and encouragement to develop ideas are the factors encouraging ‘Intrapreneurship’.

Change managements require organizations to discover how to tap people’s commitment and capacity to learn at all levels. For example Shell has leveraged the concept of he learning organization in its doctrine ‘planning as leaning’. Faced with dramatic changes and unpredictability in world oil markets Shell’s planners changed the concepts of their basic task as fostering learning rather than devising plans and engaged the managers in ferreting out the implications of possible scenarios.