Innovative technologies possess disruptive capacity but are rarely disruptive on their own. Disruptions occur at the intersection of technological innovations, strategy, and business models. The challenge has been to accurately predict and recognize their disruptive potential. It’s no easy feat. Technological innovations often disrupt some businesses and business models, while marginally affecting others. Some are disruptive from the moment they are introduced, while others become disruptive after competitive landscapes change. This is why disruptions can emerge unexpectedly, when technologies are used in innovative ways unforeseen by their creators and early adopters.
Coping with and exploiting disruptive innovations are daunting challenges for established businesses, institutions, and organizations. Disruptions undermine the value of existing structures, experience, and historical precedent, without offering clear, proven alternatives. They usually introduce new risks and uncertainties that challenge leadership teams.
Incumbents often respond to disruptive innovations by stripping away disruptive elements and molding the rest to fit their existing structures, cultures, and operations. It’s a process that Harvard’s Clayton Christensen, the dean of disruptive business strategy, describes as transforming disruptive innovations into sustaining innovations. This is why he asserts that “organizations can’t disrupt themselves.” I’m not so categorical, but I’ve learned from research and experience that transformation in the face of disruption can be frustratingly difficult for some organizations and a wild ride for others.
Lucent Technologies, for example, attempted to cope with the digital disruption of its analog telephony business through its existing business model. Digital inroads into a business segment it had long dominated caused increasing concerns across the company. A colleague who consulted for Lucent during this period described how engineers, managers, and executives expressed frustration with clients moving to digital technologies, which they considered inferior to their analog solutions. Lucent, one of the largest and most successful American companies, failed to cope with the disruption introduced by innovative digital technologies and essentially went out of business in less than five years.
The carrier quickly became the dominant vessel and capital ship after Pear Harbor. The US Navy pulled off one of the most remarkable transformations in modern millitary and business history.
I’ve found a few exceptions to Christensen’s rule. The most remarkable was the US Navy’s transformation after the Japanese destroyed or heavily damaged its fleet of battleships at Pearl Harbor on December 7, 1941. Six months later, the Navy stopped Japan’s string of victories at the Battle of the Coral Sea (May 4-8, 1941) and then gained permanent dominance at the Battle of Midway (June 4-7, 1941). It was the carrier fleet, not battleships that made victory possible. Battleships, the premier capital ships before Pearl Harbor, became escorts for aircraft carriers and gun platforms for shore bombardment. This is an exceptional case of an organization coping, adapting, and then exploiting an initially catastrophic disruption through tactical and operational transformations that have no parallel in modern military history.
There are similar cases from the private sector, but their scarcity point to the difficulties of coping with and exploiting technological disruptions. Success requires rare combinations of adaptable executive leadership and management, and effective execution of thoughtfully conceived transformation initiatives. Lucent’s demise shows that even the largest companies can stumble and fall in the process. Fortunately, the US Navy demonstrated that effective transformation is possible in the short term and under difficult circumstances.
The next posts will explore technological innovations in greater detail and discuss how various tools and frameworks can be adapted to gage disruptive their impacts. The implications of emerging innovative technologies will be discussed in the contexts of military and national defense strategy, health, healthcare, and power generation and distribution.