DISRUPTIVE INNOVATION THEORIES

There is a simple, important principle at the core of the disruptive innovation theory: companies innovate faster than customers' lives change.  Because of this, most organizations end up producing products that are too good, too expensive, and too inconvenient for many customers.  By only pursuing these "sustaining innovations," companies unwittingly open the door to entrants that can offer simpler, more convenient and lower-cost products to those customers who have no need to keep up with the accelerated pace of innovative change.

The phenomenon happens for a good reason: good managers are trained to seek higher profits by bringing better products to the most demanding customers who are perfectly willing to take the basics at reasonable prices.  And they ignore altogether "nonconsumers" who may have a desire to get a job done, but who lacks the skills, wealth, or ability to consume existing solutions.

Discount retailers such as Walmart exemplify a disruptive approach that targets consumers overshot with existing offerings - in this case, department stores.  Procter & Gamble's Crest Whitestrips product provides an example of a disruptive approach that has created an entirely new market by targeting nonconsumers: those who find it too inconvenient or too expensive to go to the dentist to get their teeth whitened.  By making it simple and affordable for people to whiten their teeth themselves, P&G has created a booming new growth business.

It is important to note that although disruption is the key to new growth, companies should never ignore their core offerings and should always continue to pursue sustaining innovation to maintain that growth.  But devoting some percentages of resources to disruptive strategies will enable those companies to profit additionally from disruptive innovation before someone else inevitably does, and to build a foundation of growth for the future.