Destroying the old to make way for the new isn’t the only way of creating value. The siren call of disruption can be awfully seductive, but it often generates extensive collateral damage. How can you break new ground without breaking the existing system or creating losers?
As new AI applications threaten our jobs and entire sections of the economy, the authors of the bestselling Blue Ocean Strategy (2005) challenge the widespread notion that innovation and growth are impossible without disruption. There is another solution, one that doesn’t sire economic meltdown, mass redundancies or individual suffering: non-disruptive creation. Have you thought about giving it a try?
Based on
Beyond Disruption:Innovate and Achieve Growth without Displacing Industries, Companies, or Jobs by W. Chan Kim and Renée Mauborgne, Harvard Business Review Press, 2023
The limits of disruption…
According to Joseph Schumpeter’s theory of creative disruption, if you bring a key innovation to market, you’ll undermine the existing players and destroy the worst.
This is how Netflix ended up bankrupting Blockbuster, the US chain of DVD rental stores, and how Amazon rattled traditional bookstores and Uber shook up the taxi industry.
This process is thought to regenerate the economic system and drive long-term growth. It works to the advantage of consumers, who benefit from better products and services at more attractive prices. And yet it also comes at the expense of entire industries and businesses. The social and economic costs of disruption are vast and under-estimated, including job losses on a massive scale and obsolescence of equipment and infrastructure.
The disruption spawned by digital photography slashed the workforce at Kodak from 86,000 in the 1960s to less than 2,000 today. The economic fabric of Rochester in New York State, where the company had been the major historical employer, also paid a heavy price: local investment and average incomes collapsed, and entire communities fell into poverty..
And the ethical alternative…
Non-disruptive creation is a positive-sum game: you can grow and innovate without creating casualties elsewhere. It is just as good for your clients as disruption since it develops new business activities that don’t compete with the old ones and creates jobs… without destroying any. The US TV series Sesame Street serves to introduce preschoolers to basic concepts (such as colors, shapes and the letters of the alphabet) without taking the place of the work done by teachers. Quite the opposite, in fact: it prepares the ground for them.
In similar fashion, Post-its have become a must-have item of equipment around the office without “ousting” any existing products. Forty years after they were invented, these sticky notes are to this day a source of sustainable growth for 3M, providing annual revenue of one billion dollars.
In the US, Square (now known as Block – the mobile payments company co-founded by Jack Dorsey1, launched terminals that make it easier for small merchants to accept credit card payments. The solution, which very quickly became a hit with consumers, boosted the sales made by small businesses without disturbing the traditional credit card industry or the activity of the major retailers.
Marianne graduated from HEC in 1998 and is now a freelance journalist specializing in management and higher education. What really fires her up is the human dimension and she is c taking a psychology course at Rennes 2 University.
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