Revolutionary Innovation via Constructive Disruption
There’s always room to grow. For all companies there’s room for transformation, and always room for growth. Revolutionary innovation is the framework for stretching the perspective of what is possible in order to uncover new, measurable and sustainable ways to provide value. More than finding merely unnoticed intersections, the end result of revolutionary innovation is the creation of opportunities where none were previously seen.
And because its goal is to transform an organization with best-in-breed solutions, revolutionary innovation works in all business environments.
When I was growing up in Brooklyn, New York, I found an abandoned public telephone in front of my apartment building one morning. It must have fallen off a repair truck.
It was the first time I had a whole piece of technology to take apart on my own. It was the 1970s and, in general, technology was still made to be repaired rather than replaced. The public telephone was the first “whole” thing that I could dissemble.
I remember finding that the magnets from the handset were particularly powerful compared to the ones we had in elementary school. Then, I tried to put it back together again after my clumsy method of opening it up.
That episode introduced me to reverse process re-engineering, and sent me on a decades-long path of dissembling and reassembling technology in various ways. Radios at the time didn’t need blinking lights, but I certainly found where “live” connections were. Ouch!
What I remember most, however, is that I was never satisfied with simply taking things apart, then putting them back together again. Instead, I would add parts, remove parts, even try to put things back together with fewer parts, always with the goal of making the objects work better.
Ever since that day in Brooklyn many years ago, my ability to expand the perceptions of those around me is what gets me up in the morning. Showing people (and, ultimately, the companies for whom they work) a broader and more interesting technology landscape is what “Revolutionary Innovation” is all about.
Years later, my first truly revolutionary innovation project was the development of a rules-based debit card system while working for a company that developed retail systems for college campuses. The idea was to develop a debit card that students could carry with them on campus and use for a variety of purchases. It had to be simple and not demand a lot of additional infrastructure.
I deconstructed the challenge into two things every student and campus store possessed: cash registers and student ID cards. The student’s ID served as the “card” that was read by the cash registers, and back office servers held rules that controlled the types of purchases each student could make. The cards replaced cash on campus in less than six months.
The value of such revolutionary innovation in this age of the Knowledge Economy has been demonstrated many times by the ongoing success of companies like Apple. Of the more than $4.1 billion earned through iTunes in FY 2010, for example, estimates of around 8% was generated by sales of iMix, the company’s user-generated playlists.
Anyone can make an iMix free of charge – celebrities can and do, too – as long as they contain content available through iTunes. Mixes are public and searchable by any iTunes user. So by providing the infrastructure and the inventory, Apple created another way to increase their earnings substantially, while letting their customers both create the product and do the selling.
Not every company is going to completely revolutionize its market like Apple did, but every enterprise can transform itself in unexpected ways that create value from its existing assets. The key is tapping into a hidden need in the marketplace or discovering a new way of meeting a particular challenge.
Sometimes it might involve connecting internal systems and processes in order to package and sell bundled products or services; other times it might involve successfully tackling a more mundane challenge, such as reducing the number of steps it takes to accomplish an everyday process, say, setting up a checking account. Regardless, all savvy companies can find ways to transform their business and practices in order to shake up their market and provide themselves a new edge within the competitive arena.
For example, one time a major credit card company needed a system capable of testing all the millions of variations of the rules used to approve credit card transactions. It would also need to accommodate changes in those rules every six months. My company competed against a wide field of incumbents, and though we had limited industry experience, we had one major advantage – all the incumbents offered only slow to change and expensive solutions that required the card company to buy ever-increasing software licenses.
After both listening to the client’s challenges and studying all the rules, I developed an innovative approach using a flexible “data harness” that could rapidly generate the vast data sets needed to simulate the millions of real-world retail transaction combinations.
Instead of old thinking, we were selected to provide its configurable and highly flexible solution to the ever-changing needs of an industry under pressure.
Another time a contractor to a foreign government came to us with an interesting challenge – the firm had been charged with developing a national workforce system. They had the people, the resources and the operational infrastructure, yet lacked the management software system.
Though the technology was relatively straightforward and we quickly drew up a solution, I knew that our challenge would be to convince the contractor that a US-based firm could align with their unique needs, as well as understand the foreign country’s regulatory requirements, processes and reporting needs.
I developed a multi-layered solution that aligned to our corporate values and led to a custom solution that the firm’s executives didn’t at first believe was achievable, and during the in-person presentation, led them through the difficult questions revolving around the many unknowns of the government process.
It was clear from their body language that we were drawing them into unfamiliar territory and, in the process, expanding their horizons. By bringing forward a solution that aligned with our corporate values of “Commitment Beyond Contract,” we pointed out the things that neither they nor our competitors had considered, or even raised. This put us at risk to win the work.
In the near term, we did not win the business. The CIO was so impressed by our methods and approach, however, that he sent us the following message: “You are now my preferred IT services partner and will be given priority on all future requirements.”
The Value of Knowledge
When Sir Timothy John Berners-Lee, a British engineer and computer scientist, implemented the first successful communication transmission between an HTTP client and a server on Christmas Day, 1990, the then-new World Wide Web paved the way for what was quickly hailed as the Information Age. Soon the world’s accumulated information was available to anyone, anywhere, with a personal computer and an Internet connection.
Today the paradigm shift continues as we transition to a more fully engaged Knowledge Economy, where knowledge itself is a product, and more and more is becoming a driver of economic growth. One of the reasons that the promise of a knowledge economy holds such potential is simply that, unlike industrial manufacturing, the resources of the knowledge economy do not become depleted through use. In fact, they may increase in value through that same use.
Knowledge is becoming the major driving force of both economic and social development, largely as a result of technological advances that have enabled the distribution and transfer of knowledge around the world. More than just another arena of corporation competition, knowledge, in fact, and the information from which knowledge derives, will be, in the words of Peter Sondergaard, senior vice president and global head of research at Gartner, “The oil of the 21st century.”
The Art of the Possible
Revolutionary innovation is the “what,” and Constructive Disruption is the “how,” the process that defines the possible. In today’s increasingly competitive arena, every business must be revolutionary rather than evolutionary in order to compete.
Revolutionary innovation also involves initiating a sustainable change in product, in service offerings, or within the business itself.
A classic example of a revolutionary innovation is how the growth in the American automobile forced the development of the U.S. Interstate Highway System. Though it began as a way simply to get people and goods from Point A to Point B, it quickly sparked a whole host of additional industries from motels to roadside restaurants to rest stops and other highway destinations.
In order to accomplish such innovation, however, those charged with change within an organization must be inspired – and enabled – to grow, to deliver more, and to expand their horizons in tangible and sustainable ways. These agents of change can range from product development groups to sales teams to transformers like strategy officers or innovation teams.
Of central importance to this quest for innovation is the newly transformative role of the CIO.
Traditionally, IT served a support function, with the CIO primarily responsible for keeping the company’s information systems up and running while managing the related costs. More and more, however, the role of the CIO has been transforming into one with a greater involvement – and accountability – in driving top-line revenues.
Many companies are beginning to look at their IT departments as innovation centers, able to make a meaningful contribution to their company’s top line. This is an exciting time to be a CIO.
But how exactly does one go about the process of initiating what I call constructive disruption in order to create the new connections of growth that will transform a company? Though the outcomes of constructive disruption are often as surprising as they are unexpected, the process is neither.
That said, the process can provoke people in ways that they find simultaneously unsettling and enjoyable. After all, stretching one’s perspective can be both disconcerting and exhilarating at the same time. When I ask a probing question in preliminary meetings, it’s not unusual for me to get the response, “That’s a really unfair question – but a very good one.”
Unseen Data Connections
The process of constructive disruption begins with a series of meetings or facilitated sessions in which company personnel communicate one or more perceived problems or needs. Even in its earliest stage, simply seeing the company’s priorities in tackling these issues can be an exciting, thought-provoking event that will engage each member of the change team.
The problem is clarified and then merged with other pre-existing data, which I often bring in from previous experience. In fact, it’s generally a large, pre-existing collection of data and knowledge that enables Revolutionary Innovation to work at all.
That’s why, whenever I’m asked by a new client, “How did you prepare for this meeting?” I answer, “I’ve been preparing for this meeting my whole life.”
To the trained ear, and someone with experience in goal seeking, the study of these data points within the context of the data flow throughout the organization will reveal previously unseen data connections, those points of intersection that hold untapped potential for the company.
A short assessment is then proposed to exploit such data connections, and a detailed implementation plan written up.
In today’s marketplace, the ability of an organization to create greater value through the act of revolutionary innovation is more important than ever. At the same time, becoming a change agent for your company can be a thrilling, rewarding experience.
Have you thought of a different way to bring additional value to your firm? And what was the public telephone in your past that first captured your imagination and triggered a notion that you could make something work better?
Perhaps you could be a revolutionary innovator, too.