It is never wrong for the companies to prioritize their customers’ need in different levels. That’s the point I was trying to make in my last reading reflection by endorsing Christensen’s segmentation of three customer groups. However, disruptive innovations don’t always serve the needs of customers, or rather, they barely do. So what if there are no customers in any level need the product? Is the company supposed to give it up? According to my last post, the companies might not blindly take the risk. But the article Disruptive Technologies: Catching the Wave fosters a new perspective for me to look at this.
“Managers must beware of ignoring new technologies that don’t initially meet the need of their mainstream customers.” Christensen encourages a consciousness of advance among companies. Many successful companies fail to make disruptive technology investment that customers of the future will demand, Christensen points out the reason of this phenomenon “lies at the heart of the paradox: leading companies succumb to one of the most popular, and valuable, management dogmas. They stay close to their customers”. So “when the customers reject a new technology, companies will listen to them but in the end will also be hurt by the technology their customers let them ignore.” he writes.
The example of Seagate and 3.5-inch drive is a very persuasive one. Small start-up catches the wave while big company loses the game because they underestimate the potential of a disruptive innovation. Comparatively speaking, big companies are more likely to face the paradox since they have more restrictions and concerns when deciding to access a new technology. Customers’ needs and whether it’s profitable in the market seem to be the prerequisites.
So I wonder, is there a method to help big companies work out the paradox? How can they not miss the wave but be less risky to launch the innovations despite customer’s attitudes? Christensen provides answers in this article. He teaches the companies to spot and cultivate disruptive technologies by executing five steps: determine whether the technology is disruptive or sustaining; define the strategic significance of it; locate the initial market for it; place responsibility for building a disruptive technology business in an independent organization; keep the organization independent.
I think this “five-step principle” would relieve the anxiety of many companies. It focuses more on the strategic analysis of technology itself than temporary customer’s needs and market compatibility. Christensen concludes: “The key is to manage strategically important disruptive technologies in an organizational context where small orders create energy, where fast low-cost forays into ill-defined market are possible, and where overhead is low enough to permit profit even in emerging markets.”
Google, as the leader innovator in the industry, launched the “20 percent time” campaign, meaning all developers can use 20 percent of their time per day to work on side projects. This could be a fair example for “place responsibility for building a disruptive technology business in an independent organization”. Here, this independent organization refers to single or a team of developers. They can use the free time to create experimental projects, which might later become disruptive innovations. This may not be proved the most effective approach, but it generates possibilities to drive innovation.
Here’s one more personal example. As a customer being conservative to fancy new technology, I hate companies being way ahead of my current needs and kick out all the old technology that already makes me comfortable. For example, there had been a long time that I stubbornly stick to using a regular phone and resist smartphones. I believed that a cellphone’s job was to function extremely well in telephone, text message and that’s all. I could do other fancy stuff in my computer and I didn’t want to mess myself up by tons of features in a smart phone. As far as I know, a large group of people held the same opinion as I did at that time. So if Apple stands by customers like us, there would be no cellphone revolution brought by iPhone. My first smart phone came to me in Oct 2010, soon after I arrived in US. I was not willing to use it at all in the beginning and hardly got myself used to the touch screen. But gradually I found it was not as scary as I assumed, and change my stereotying of smart phone. It’s not only fancy in appearance, but user friendly and compatible to almost all the popular applications. My life’s getting easier with the help of at-hand utilities and my online activities become more convenient. I am so surprised to see how iPhone touches upon the technologies that I’m unconsciously in need of from a cellphone.
My experience make me realize that companies should not just playing the role of a servant, but also a guide and educator, who awakes the potential call inside customers for a new technology, help them to adopt that technology which they may reject at the first. As I see it, the process of conquering the stubborn customers is also the process of building their higher loyalty, because once they succumb to the product (like I’m with iPhone), they are not easily change to other brands that access to this new technology later on. So companies should not miss the best timing to adopt a promising technology which might grab the emerging market by an early entry.