Harnessing the Secret Structure of Innovation

The promise of an information-enabled innovation strategy extends to disruption. Disruption, as seen through the lens of our model, is an event that suddenly resets and resimplifies an innovation space by lowering product complexity. We observe such events when two previously unconnected innovation spaces merge, giving rise to myriad new product innovations with reduced complexity. This implies that disruptions don’t just happen — they are created by innovators at the edge of a space who build simpler products that leverage components from a different space. A classic example is the disruption of the music media industry by edge players in peer-to-peer file sharing (like Napster) and research organizations developing new music encoding standards (like the Munich, Germany-based research organization Fraunhofer-Gesellschaft, which was the main developer of MP3 technology). While we cannot claim that we can predict such disruptions (yet), our analytical approach allows innovators to spot such events and interpret them as early-warning signals.

A disruption always requires innovators to reset their innovation strategy and to return to an impatient approach. We modeled different responses to disruption in the technology space and found that companies that successfully reset their strategy have an innovation output that’s about 50% higher than companies that don’t. (See “Sensing and Navigating a Disruption.”) Switching back to impatient behavior is easier said than done, because it requires a switch in all aspects of the innovation approach.

Source: Harnessing the Secret Structure of Innovation

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