Disruptive innovation first came under the limelight in 1995. It has brought a revolutionary change in the way of powerful thinking for growth, which has been driven by innovation. This has offered many leaders of small start-up companies the essential guide and motivation. 

Also, it is highly relevant to well-established organizations, large enterprises, and other business sectors. 

What is the disruptive innovation Christensen theory?

This disruptive innovation refers to a process with which the product or the service takes place in the simple application at the market bottom. It is typically less expensive and has better access. And then, it seamlessly moves to the upmarket, which ultimately displaces the other established competitors. 

The Harvard Business School Professor Clayton Christensen invented this theory in the 1990s. Since then, this term has become highly ubiquitous throughout Wall Street to Silicon Valley.

However, this is one of the most misunderstood and misapplied terms in the lexicon of business. But the Disruptive Innovations are NOT at all the breakthrough technologies which make better products. But they are the innovations that make services and products better affordable and accessible. Hence it aims to make the services and products more available for the larger population.

What are the steps that happen over disruptive innovation? 

Disruptive innovation takes place with a few steps. Here are the steps that get included in this theory.

• Incubating of business innovations and developing the products or services to appeal towards the most demanding and profitable customers while ignoring the need of the down-market.
• Entrants in the business target this market segment which has been ignored and gains traction through meeting the needs of that reduced cost compared to what the incumbent has offered.
• Incumbents, on the other hand, do not respond to new entrants. They continue to focus on those segments that bring them more profit.
• Entrants move out to the upmarket by offering the solutions that appeal better to the mainstream customers of the incumbent.
• As the new entrant starts to attract the mainstream customers of the incumbent business, then mass disruption takes place.

Tips to follow to understand disruptive innovation better 

Here are a few tips that one can follow to learn Christensen’s disruptive innovation theory better.

• The disruption can come up in different varieties. It can either be a low-end disruption or it can be a new-market disruption.
• Not all kinds of innovation are considered disruptions. When incumbents are much focused on pleasing their most profitable type of customers, they either neglect or misjudge the needs of their other segments.
• Disruptive innovation works as a process rather than working as any product or service. For example, Netflix is an instance that does not threaten Blockbuster at first, but it siphoned away from the core users of Blockbuster before the company was able to stage an adequate response.
• It is very important to choose the field of battle in a wise manner.

Conclusion

In terms of business organization and entrepreneurship, the Disruptive innovation theory is highly relevant. Though there are some misconceptions in understanding this theory, getting it in the right way can help you in adopting better growth potential.

"What happens when the incumbents are so focused on pleasing their most profitable customers that they neglect or misjudge the needs of their other segments." - Ilan Mochari.