Disruptive innovation isn’t about a business trying to improve a product or service that it’s offering – this is usually done through engaging with customers to use their feedback to make improvements. Instead, disruptive innovation is the difference between ‘best practice’ and ‘next practice.’ Innovation needs vision and creativity, and requires disruptors to find ways to change ‘business as usual’.
Not only this, and as many businesses will know, timing is key when it comes to successful innovation. Companies like Uber and AirBnB have thrived because they were launched in a time of austerity, just when people were looking for extra income. Other businesses have come out on top after going through a period known as ‘planned opportunism’ whereby the company foresees a big change in the future, and plans ahead for it. This could be a change in client demand, a legislation change or new and emerging technology that it can use to its advantage.
As explained by Harvard’s visiting professor, Vijay Govindarajan, Tata Consultancy Services, the Indian technology-services giant, is a prime example of planned opportunism. During the few first years after the millennium, it made the counter-intuitive decision to move away from its call centre business – despite profits in this sector booming at the time. It had foreseen that clients would soon want a more strategic level of service, so by recruiting higher skilled staff who could use emerging cloud-based technologies, it could bring in greater profits per salesperson. It would also no longer have to recruit low skilled call centre workers, as turnover with these staff was usually quite high.
Govindarajan puts this planned opportunism down to sensitivity to ‘weak signals’, which he labels as ‘early evidence of emerging trends from which it is possible to deduce important changes in demography, technology, customer tastes and needs, and economic, environmental, regulatory, and political force’. In Tata’s case, paying attention to weak signals showed the company that traditional software consultancy was becoming commoditised, and soon less profitable. It also made them realise that cloud and mobile technologies that were just emerging had the potential to pave the way for the world’s next wave of innovation. By getting on board quickly, and preparing the business for this change way ahead of time, Tata had an advantage over the competition that were stuck in the old way of doing things.
As Tata Consultancy Services and many other businesses have recognised, the key is to take advantage of the opportunity good timing affords and then innovate remorselessly. Today’s society is changing quickly, businesses can’t afford to bury their heads in the sand and ignore the digital revolution because otherwise they will be left behind. In fact, our managing director, Moneeb Awan, goes into more detail about what makes for successful innovation in his latest article published on Tech Page One, from good timing to facing the ‘innovators dilemma’. You can read the full article here.