A new perspective on innovation

Mumbai: Disruptive Innovation: Unlocking Market Growth' was the theme of a

seminar with Professor Clayton Christensen and Innosight by the Confederation of

Indian Industry in Mumbai.






Professor Clayton Christensen began by describing two types of technologies:
sustaining technologies and disruptive technologies. "Sustaining technologies

are technologies that improve product performance. These are technologies that

most large companies are familiar with; technologies that involve improving a

product that has an established role in the market.






Disruptive technologies are innovations that result in worse product
performance, at least in the near term. They are generally cheaper, simpler,

smaller, and frequently more convenient to use." he said.






Disruptive technologies occur less frequently, but when they do, they can cause
the failure of highly successful companies who are only prepared for sustaining

technologies, he added.






Large companies, being industry veterans, have set ways in approaching new
technologies. This hinders a quick response to disruptive technologies. Large

companies also have an established customer base, requiring better versions of

current products rather than completely new technologies. "Ultimately, companies

make decisions according to their position in the value network - according to

where they are in the market," he said.






Success, he said, lies in being able to identify, develop and successfully
expand the market using potentially disruptive technologies before they overtake

the traditional sustaining technology.






Even after correctly identifying potentially disruptive technologies, firms need
to circumvent hierarchy and bureaucracy, which may stifle the free pursuit of

creative ideas. Christensen suggested the need to provide experimental groups

within the company a freer rein. "With a few exceptions, the only instances in

which mainstream firms have successfully established a timely position in a

disruptive technology were those in which the firms' managers set up an

autonomous organization charged with building a new and independent business

around the disruptive technology," he said. "This autonomous organization will

then be able to choose the customers it answers to, choose how much profit it

needs to make, and how to run its business," he added.






The appetite of very large "bottom of the pyramid" market can be ably met by
innovation, he said, adding that "innovation is a scientific process, and people

skills can be built".






Companies would need to quickly develop new technology to compete with smaller,
more mobile firms while maintaining their core business, he said. He concluded

by saying that putting in place an organizational infrastructure to systematize

the ability to recognize and react to patterns can help any company dramatically

increase its chances of success. "Implementing organizational infrastructure can

help bring order to chaos and increase a company's ability to create growth

through innovation," he said.






Dr Sarita Nagpal, Principal Counsellor and Head — Manufacturing Services, CII
introduced the theme of the seminar as an integral part of an initiative by CII

to set up a 'Manufacturing Innovation Mission'.






The CII Clayton Christensen Institute would provide an umbrella for training and
consulting, said Dr Nagpal. "The mission for manufacturing innovation aims at

creating 100 Indian companies and helping them to innovate," she explained.

© Ciol Bureau