A Rigorous Approach
So how do you create disruptive innovation without failing?
Eric Ries, in Lean Startup, outlines a methodical process for startups to go about creating new products.
What Eric describe as a "Startup" is what Clay Christensen would call Disruptive Innovation, and what Eric is referring to as traditional product development, is what Dr. Christensen would call Sustaining Innovation.
Eric points out that traditional management (those systems focused on Sustaining Innovations) is simply not applicable to breakthrough change. In order to lead a successful startup (Disruptive Innovation) you must follow a more humble and iterative path.
Traditional Management calls for:
Doing Market Research
Coming up with a strategy
Delivering a great product
But this strategy is doomed to failure because it assumes that you know what the market wants.
The resources you invested in your research, product design and testing can further muddle your willingness to listen to objective feedback after the product is launched.
The Lean Startup method on the other hand calls for a rinse and repeat cycle of deliberate and rigorous testing.
Build: Build and Minimum Viable Product (MVP). This is a product that you are not proud of, but it embodies the core ingredients you wish to test. Because it is unpolished and even simplistic, you can iterate and learn very quickly.
Measure: In this stage you see learning as the deliverable of your MVP. You set rigorous metrics upfront to assess how the market feels about your core value proposition.
Learn: Now that you have actionable, objective feedback on your MVP and key assumptions, you can make intelligent decisions about what to do next. Shall you PERSEVERE or PIVOT? Should you refine your MVP, or rethink your value proposition.
The Barksdale Insight
Modern product development strategies are focused on improving today's product offerings for todays customers.
We spend huge sums of money in market research to get flawed data so that we can justify investing even larger sums to produce highly polished products that have yet to be tested in the real world.
That's like putting on a tuxedo or evening gown to go to the gym.
These large expenditures are labeled as "Risk Reduction" but more often are simply attempts to protect a companies reputation, and the manager's track record.
Truly innovative companies on the other hand, abandon this avoidance methodology in favor of a more direct approach. They find ways to validate their assumptions in the real world before they invest large amounts of capital. If reputation is a key concern, they find ways to experiment outside the repetitional bounds.
They know that the gym is there for growth, not display.
When innovators get dressed up, it isn't to go to the gym - its to show off their first place medals at the afterparty.