Disruptive Innovation Primer

By Innosight

Only 25% of all new products that established companies introduce in their markets succeed. Seventy-five percent fail. Only 10 percent of companies can maintain a level of growth that satisfies their shareholders over the long term. Ninety percent cannot. Most of those companies seem to be doing all the right things – listening to their best customers, keeping a close eye on competitors, and investing heavily in technological advancements. Longterm success requires more. It requires that companies develop strategies around disruptive innovations.

Disruptive innovations either create new markets or reshape existing markets by delivering relatively simple, convenient, lowcost innovations to a set of customers who are ignored by industry leaders. Historically, companies that dominate an industry have had little interest in pursuing these types of innovations because profit margins are often lower and the innovations don't address the needs of those companies' best customers. However, companies that have recognized the value in pursuing disruptive growth – such as Intel, Procter and Gamble, Cisco, Johnson & Johnson, Dow Corning and IBM – have all profited from this type of innovation at various points in their histories.

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