Disruptive Innovations In A VUCA World
The market development process envisages the firm to learn and know about the market and also aids in understanding the technology in all spheres.
Asian firms and industries posited a serious threat to the industries of USA during the 1980’s. As a result, the firms in challenge had to engage in lower order innovations termed as incremental by nature, thereby changing their products, services and processes to some extent. This was their cost-effective model to pace with the market expectations and re-establish their superiority in the business environment. But this was a dangerous move, as entrepreneurs engaged in a battle for survival, blatantly ignored the importance of truly radical innovations (Disruptive). Research acknowledges the negative consequences on extended emphasis on low order innovations, termed as incremental. It is now acceptable, in a dynamic scenario, for long term strategic growth, discontinuous innovation is must. This innovation process is the new vector for accelerating growth of the economy as a whole. Is this what most new start-ups doing, caressing disruptive innovation in a VUCA world?
It has been readily established that business growth and innovation has a positive relationship. These discontinuous innovations are transforming the relationship between the customers and suppliers. It also attempts to change the market structure, the economy, and the present products, engaged in a battle for business leadership. The uncertainties and discontinuities characterise the discontinuous innovation lifecycle. What is important, is the elimination of these uncertainties, while these firms still flourish. This is a big challenge to entrepreneurial firms in existence and about to exploit the latent opportunities.
Academic and industrial research have stressed upon the technical and market uncertainties. The technical uncertainties include sound scientific knowledge and dependence on concrete manufacturing processes. The uncertainties related with the market revolve around the customer with changing needs and wants, which must be clearly understood, including the distribution mechanism. This is where the discontinuous innovation finds its birth. Covid-19 is the most recent experience that you can see around, disrupting the market place.
In addition to technical and market uncertainties, there are two more uncertainties, one related to organisational context and the intermingling difficulty of managing between them. It has been observed that the teams related to disruptive innovations often failed to understand the context to uncertainties related to organisation and resource management. Most failures have been as a result of a “zero concert” between the two. Start-ups must learn from this.
There are few questions, which start-ups, entrepreneurial and be it innovative firms that needs to be thought and responded.
1. Within the system, have the technical specifications and the defined manufacturing issues been resolved?
2. How does one see the expectations vs market development as a match over?
3. How does application and the markets connect?
4. Are the manufacturing challenges impacting market entry?
5. Which kind of business model should be adopted?
6. Which kind of organisational structure and the team should be mapped for the process?
7. How to sustain during the transition?
It is true that identifying the prospective customers, who are ready to experience the new products or services is must to provide a momentum. It is also understood that all discontinuous innovations represent a significant move from the existing status to a leap forward in technology and application. Without doubt, the marketing process for every disruptive innovation is fairly complex and consumes time as compared to the low order incremental one. An immense amount of application understanding, customer education and training is required to keep the gaps low as possible.
The market development process envisages the firm to learn and know about the market and also aids in understanding the technology in all spheres. Everyone is engaged in a “killer like application” to dominate a larger market. We can witness in all major start-ups. It is uncommon to decipher such path breaking technologies to have a larger chunk of the market share, in the very first days of commercialisation. It is also true that some of these innovations find newer applications for which the primary innovation was never taken place and that the latent market may be higher than expected. This explosion of predicting applications, allows the firms migrate toward the most hopeful opportunities in the market place. Why is it so, still remains unanswered?
These discontinuous innovations have various spinoffs. This means, they may open up new frontiers in the applied fields of product innovations or/and may lead to the creation of newer or related markets that may not have been thought of. Firms challenged by these new opportunities and threats, create new business units, may be resulting into unrelated diversification.
The eventual objective of any discontinuous innovation is to multiply business. This can be reached either by the innovation process of finding new applications and at the same time capitalising on the niche markets. The pursuit to constantly evolve in searching the ‘new’ in all should not be stopped. The market risks associated and topped by unexpected opportunities will obstruct the initiatives for stabilising the outcomes. For this, an enhanced flexibility is required towards the understanding and implementation for the new business. To reap the harvest emerging out of the discontinuous innovation, the prime effort has to be undertaken in the market development activity, as it is the most important ‘lethal juncture’ in the business process, which will eventually decide the success and failure of the innovation.
It is here the entrepreneur’s role comes into prominence. The entrepreneur inheriting the astute characteristics of understanding a business and associating it with finding opportunity, is challenged by risks and uncertainties. In order to multiply the business or create a new one, he/she looks in for innovative ways, in all perspectives. This is where a link can be established between an innovation and an entrepreneur. How deep are you and your start-up engaged in disruptive innovations in a VUCA world?
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
Around The World