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In recent years disruption has become the battle cry of business. Disruption occurs when an innovation creates a new market and business model that cause established players to fall. We love the ease of taking, sharing, and storing digital photographs — a disruption that led to the demise of both Kodak and the once ubiquitous film market. Millions of us benefit from Uber’s driver-on-demand service, even as it displaces existing taxi companies.
Not surprisingly, many have come to view disruption as a synonym for innovation. Scores of articles offer advice on how to succeed as a disruptive innovator and how to defend against a disruptive challenger. Corporate leaders are continually warned that disruption lurks around every corner and that the only way to survive, succeed, and grow is to disrupt their industries or even their own companies.
But is disruption the only way to innovate and grow? Is it even the best way? Our research and analysis over the last three decades suggest that the answer is no. Disruption may be what people talk about, and it’s certainly important and all around us. But we found that a single-minded focus on disruption leads companies to overlook another building block of innovation and growth — one that we would argue is more important.1
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That other building block is what we call nondisruptive creation, which offers a new way of thinking about what’s possible. It highlights the immense potential for creating new markets where none existed before. This is creation without disruption or destruction. All the demand generated by this kind of innovation is new.
Most companies remain stuck in the mindset that in order to create you must disrupt or destroy. The time has come to fully embrace the idea that you can create without destroying. Nondisruptive creation breaks the existing frame on innovation and growth and allows for a much broader view of how they are generated. It expands the conversation about where real opportunities reside.
In this article we define nondisruptive creation; outline its distinctive advantages for established companies, startups, and society; and offer a framework to help leaders charged with driving innovation achieve the kind of growth that best suits their companies. We then spotlight which strategies trigger nondisruptive creation and which lead to disruption.
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1. Since the publication of our research on blue ocean strategy, where we outline the pattern of market-creating strategy for growth, a question we often confronted was how the creation of blue oceans or new markets differs from disruption. In an attempt to address this question, we examined the blue ocean data and found that while blue oceans came with a measure of disruption, many were created in a nondisruptive way, generating all-new demand beyond industry boundaries. As our research and thinking deepened on this topic, we realized that nondisruptive creation has always existed in business life and that many markets, contrary to common assumptions about disruption, were based on nondisruptive creation. This is the genesis of our theory of nondisruptive creation presented here.
2. For discussions on the existence and economic importance of new goods, including those that did not replace existing ones, see T. Bresnahan and R. Gordon, eds., The Economics of New Goods (Chicago: University of Chicago Press, 1996). Also see A. Bhidé, The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World (Princeton, NJ: Princeton University Press, 2008), which discusses the existence and importance of innovations that were driven by the nondestructive form of entrepreneurship.
3. For Kickstarter’s estimation of its full impact, see Y. Strickler, “Kickstarter’s Impact on the Creative Economy,” The Kickstarter Blog, July 28, 2016.
4. See C.B. Frey and M.A. Osborne, “The Future of Employment: How Susceptible Are Jobs to Computerization,” working paper, Sept. 17, 2013, wherein “computerization” refers to job automation by means of computer-controlled equipment and technologies such as machine learning, artificial intelligence, and robotics.
5. The Cruise Lines International Association’s 2017 annual report revealed that the industry generated 1.02+ million jobs and had an economic impact of $126 billion in 2016.
6. While in the broadest sense the term “innovation” can be used to describe anything new or original, as our prior discussions illuminate, our focus here is limited to innovation that unlocks market creation, since market creation is at the heart of new growth.
i. Clayton M. Christensen has spurred the recent popularity of the term “disruption” through his influential work on disruptive technology and innovation. See his seminal work, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School Press, 1997).