“Press Release,” circa, 1899:
Consolidated Buggy Whip Announces New Patented Manufacturing Process
It’s a big day at Consolidated Buggy Whip. With our new, patented manufacturing process, the company will have a competitive advantage over all other buggy whip manufacturers. Anthony Johnson, President of Consolidated Buggy Whip, stated, “Our patented manufacturing process cuts our production costs by more than half. This is exactly the advantage we need in order to capture new market share, and effectively corner the market for buggy whips.”
We are also pleased to announce that our two leading competitors have proposed a merger with Consolidated. This is a sure sign that Consolidated’s patented manufacturing process will ensure its position as the undisputed leader in the buggy whip market for years to come.
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If you are even a casual student of history, you know what was happening around the turn of the century. Automobiles were being invented and would soon replace the horse and buggy. Our fictitious company, Consolidated Buggy Whip, was about to face its biggest threat. They were facing down a disruptive innovation and either didn’t realize it, or chose to ignore it.
Recent history is riddled with companies, and even entire industries, that have been displaced by the introduction of disruptive innovations. Tower Records, Borders Books, Kodak, Nokia, Circuit City, and Newsweek are just a few that come to mind. Ironically, some of these companies were originally disruptors. Unfortunately, they allowed themselves to be displaced by newer disruptors.
Vigilance, curiosity, and creativity are required for an organization to avoid, or even create, disruptive innovations. Complacency and ignorance are sure ways to invite new disruption.
The competitive landscape you think you understand isn’t the only one that matters when it comes to disruptive innovation.