Reprint: R1212C
In this article Wessel and Christensen, both of Harvard Business School, introduce a way to work out how dangerous a disruption may be to your business. With a deep understanding of the jobs your company really does for customers and a clear take on both the advantages the disrupters have and the barriers they face, you can predict whether, to what extent, and how quickly an approaching disruption might displace your business model. Then you can take steps to maximize your core’s strengths in response.
The authors offer as an example the disruption of retail grocery stores. Although only about 1% of all groceries in the U.S. are currently bought online, the theory of disruption suggests that e-grocers will speed their delivery times, increase their product selection, and add features we can hardly imagine today in pursuit of new customers and higher profit margins. Nevertheless, of the three main jobs for which customers use retail grocers—stock up on nonperishables, shop for tonight’s dinner, and grab an emergency item—only the first is vulnerable right now to the disrupters’ extendable core: its ability to maintain radically lower prices as it creeps upmarket in search of more customers. That means traditional grocers need to focus on developing innovations to strengthen their hold on the other two.
Disruptive innovations are like missiles launched at your business. For 20 years we’ve described missile after missile that took aim and annihilated its target: Napster, Amazon, and the Apple Store devastated Tower Records and Musicland; tiny, underpowered personal computers grew to replace minicomputers and mainframes; digital photography made film practically obsolete.
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