[Book Review] Big Bang Disruption: Strategy in the Age of Devastating Innovation

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Here’s a new and important book that helps us make sense of the changing business landscape. It’s Big Bang Disruption: Strategy in the Age of Devastating Innovation by Larry Downes and Paul Nunes (from Accenture) – and it describes how so many businesses are disrupted overnight by big-bang innovations that come out of nowhere.  The insights presented by the book add new perspectives to the work on disruptive innovation by Clayton Christensen and gang. 

According to the authors, the big-bang disrupters may not even see you as competition. They’re not sizing up your product line and figuring out ways to offer slightly better price or performance with hopes of gaining a short-term advantage. 


EXAMPLES OF BIG BANG INNOVATION

One of the examples is the GPS system. Do you even remember Garmin, or TomTom or Magellan?  They were all disrupted by the smartphone – with Google Maps leading the way.

And the smartphone isn’t done yet. It has wiped out the wrist watch industry, threatens the digital camera market, the video camcorder market, and even the music and TV industries. 

Other examples from the book include:

CampusBookRentals and Khan Academy in education, Pandora and Spotify in radio and recorded music, Skype and FaceTime in voice and video calling, and Square in mobile credit-card processing. These offerings’ lightning-fast adoption is a function of near-perfect market information. Wherever customers are, mobile devices let them search a wide range of specialized data sources–including online sites like Yelp, TripAdvisor, Amazon, and other free databases of user-generated reviews–to find the best price and quality and the next new thing.

What’s more, big-bang disruptions go far beyond information-based goods and services. Restaurants, for example, now depend on online reservations, customer-generated reviews, e-coupons, and location-based services to drive business.


THE SHARK-FIN PRODUCT ADOPTION CURVE

The traditional product development cycle has been radically compressed:

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What this “shark-fin” curve means is that incumbents don’t have time to catch up. The crossing-the-chasm story is over.  New products are perfected with a few trial users and then are embraced quickly by the vast majority of the market!

Here are some ways in which the world has changed:

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TRUTH TELLERS

The book introduces us to the folks known as truth tellers. These are industry experts with
profound insights into new technologies and customer behaviors, who can predict
earlier than anyone else when small tremors signal imminent earthquakes. Often,
they are people who spend their careers working in the industry, and share a
unique passion for its mission, its products and its customers. My term for these guys is thought-leaders, or if you 
want to be real – they’re the ubernerds.

Truth tellers are often eccentric and
difficult to manage (no, really?!). They may be
found outside your organization–they may even be customers. Learning to find
them is hard. Learning to listen to them is even harder.

THE 12 RULES OF BIG BANG DISRUPTION

Another reason to buy this book is the neat methodology they’ve come up with to introduce this Big-Band Disruption mindset into your company:  

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I personally don’t think our Fortune 100 companies can adopt this sort of thinking very easily, so I’m looking for a lot of them to get dinged severely by the Big-Bang Disrupters, some of which will come to us from India and China.

Still, the framework they present is compelling – especially the part about leaving the market before you get disrupted in the end.

THE POWER OF ECOSYSTEMS

Finally, one of the key elements of Big Bang Disruption is the replacement of the traditional supply chain by dynamic, ever-shifting ecosystems. Again, the culture of most traditional institutions can’t embrace openness or collaboration. I’ve had some experience in that department.

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Keep this in mind; I’ll be back very soon with a blog post on ecosystem strategy.

Cloud Computing = Disruptive Innovation

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Mezeo’s Steve Lesem explains how Cloud Storage is a disruptive innovation:

The common assumption is that the traditional IT vendors will be disrupted by cloud computing offerings from Amazon and Google
The truth is, Amazon and Google may eventually impact this market, but
they will not be the first to disrupt traditional IT service
providers.Already we see hosting providers like Rackspace and SoftLayer provide their own suite of differentiated cloud offerings.

My thinking is that the entire cloud story is a paradigm shift for IT. See this article I just co-authored: Considerations for Migrating to the Cloud: How Cloud Computing is Changing the Enterprise »

See also
: Lesem’s Cloud Storage and The Innovator’s Dilemma »

Stay tuned for more on the cloud.