Disruptive Innovation - Making it happen in Organizations
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Authors
Authors: Sanjib Dutta, Anil Kumar Kartham
Senior Faculty Member, Faculty Associate
ICMR (IBS Center for Management Research).
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Coping With Disruptive Innovation
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Disruptive innovations require a set of new capabilities in a firm: new resources, new processes and new values. This does not occur by accident but by design. New organizational space has to be created to develop these capabilities. There are three ways in which the new capabilities can be created. First, one can create a new organizational structure (to develop new processes) inside the existing corporate boundaries. The second option is to spin out a new organization where new processes and values are nurtured. Thirdly, the firm can acquire an organization that already has the desired resources, processes and values. |
The boundary separates the old processes and people from the new. New team boundaries help establish new patterns of working together, which ultimately develop into new processes (refer to Exhibit 1.2 to see how the Macintosh team worked at Apple Computers). Such teams are referred to as "heavyweight teams." These new teams have new challenges. They are physically close together at the workplace. The members of these teams take personal responsibility for the success of the project. Chrysler, for example, used such teams to design its Minivan, Small car, Jeep, and Truck models. IBM used teams like this to design diskdrives. Thus heavyweight teams work as vehicles to create new processes that can develop improved products within a relatively short span of time.
Exhibit: 1.2
The Mac team inside Apple
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Steve Jobs wanted to spearhead disruptive innovation. He understood quite well the type of environment necessary, the people needed and the work patterns necessary in a new team. He hand-picked his design team. Then he posted the team to work many miles away from the other divisions in Apple. He created a post-teenage work environment for the young programmers, installing a stereo system and six-feet-high speakers in the offices where this team worked. A Japanese masseur was on call for people who worked late. Fresh fruit juice and mineral water were made available to the team at a cost of $1,00,000 per year. A Bossendorfer grand piano worth $ 50,000 was kept in the lobby of the office. Expensive European cars such as BMWs and Saabs were at the service of the team members. Jobs took utmost care to protect this team from the interference of other managers in the organization. He used his status as a founder of Apple to ensure that all the funds and resources the team wanted, were at its disposal. Result: the magic called Macintosh. |
Adapted from "Beyond the looking glass," by Alan Downs, AMACOM (1997).