• June 6, 2016

Disruption: You Keep Using That Word

Everyone talks about disruption. But does it really mean anything?

Certain terms have unusual potency in the enterprise world. They seep into the discourse and are recognized for their power. Often, they are used relentlessly until they are bled of whatever clarity they once had. Think of words like “synergy” and “proactive.” They went from expressive and meaningful words to useless jargon.

“Disruption” is becoming like that. The term has been flung around until it buzzes. Disruption embodies both good and bad; creative and destructive. It can be good for customers and industries, and bad for incumbents in those industries—especially if they refuse to see what’s coming. As Amy Cosper of Entrepreneur.com says, disruption brings into focus the contrast between “how it’s always been done” and “the new approach.” It’s a process that launches revolutions in thought.

What Did It Originally Mean?

Some industry observers argue “disruption” has become a buzzword without any substantive meaning. It’s trendy, tossed around in the business world and beyond. It’s become trite and clichéd.

Yet people tend to forget that the word entered into the business lexicon with a very specific meaning. That was back in 1995, when Harvard Business School Professor Clayton Christianson first advanced his theory of disruptive innovation. In enterprise parlance, disruption has come to mean breakthrough innovation. But this isn’t what Christianson meant. Instead, disruption specifically refers to the dynamic that occurs when established players are so focused on their most profitable customers, they neglect or misjudge the rest of the market. Sometimes fatally so.

If a cutting-edge startup captures those overlooked segments with better pricing and product or service performance, then the innovation is potentially disruptive. But it isn’t necessarily because the startup has created a breakthrough technology or process. They’re just serving segments neglected by the incumbents. Disruption is unleashed when the startup moves from those neglected segments to high-margin customers. If new entrants can deliver performance levels high-margin customers expect while maintaining the advantages that drove their early success, the market is disrupted.

What Does It Mean Now?

Yet The Guardian reports that many question Christianson’s “disruptive” premise. Evidence shows new entrants rarely produce innovative solutions that displace existing market leaders. They simply nose around the edges, creating a slightly new status quo. They essentially drive incremental innovations that change the complexion of industries. Most of the time, established players maintain their grip.

Still, its hard to argue companies like Amazon and Netflix didn’t disrupt markets, knocking out incumbents while putting others in grave danger. Has “disruption” become an unlucky incumbent in the enterprise buzzword market? Regardless of what we call it, enterprises need to be continuously transforming to avoid a market upset and find success tomorrow.

Like this story? Read more about turning disruption into a money-making opportunity.