Disruption, innovation and novelty: a tale of 3 kingdoms
A story about growth, people and change
I work for a FTSE 50 company.
FTSE 30 actually.
But who’s counting.
Before that I worked for American listed companies. S&P 500 territory. So, big corporates. And I can tell you everyone in big corporates loves to talk about innovation and disruption. Product and marketing in particular. And executive teams. You’d think bonuses were determined by the number of times those words were used. Anytime anyone wants to bring an idea, the best way to garner support is the i-word or the d-word. Then everyone else piles in.
I’ve seen many CMOs or Product MDs beam with pride when their team present a product plan littered with these words. They smile. Grin, even. Ear to ear.
But here’s the thing.
At the risk of sounding unpopular, if someone’s smiling while talking about innovation or disruption, that’s a big sign they’re not talking about innovation and disruption.
Most of the things we describe as innovation are actually novelty
Novelty is simply an incremental change to an existing product designed to help marketers differentiate their products from the competition. — Apex
That is the basic building block of business. Incremental change in response to a visible customer or market need. The word visible is very important here — $20B businesses don’t make choices based on speculation, vague insight, or gut feel. They make choices based on VISIBLE trends. CLEAR trajectories. DATA driven strategy. CEOs of listed $20B businesses have shareholders and boards that expect them to be able to justify and rationalise their decisions. (Take it from someone who’s built board decks for a living showing *ahem* justifying strategic choices.)
Now, I’m not knocking data. I’m just saying if you are basing decisions on clear customer and market insight then, be definition, you’re iterating.
You’re responding.
You’re creating novelty.
Novelty is rooted in data, it’s a response to change that’s showing up in numbers.
Novelty creates excitement, buzz, interest and optimism. Novelty is fun. It attracts people and energy. It does all this because it’s low risk. It’s a plain response to plain facts and the margin for error is relatively low. Which means the margin for getting sacked is also low. Because you’re responding to data, getting budget approval is straightforward. And so the party continues. Everybody’s smiling. Ear to ear.
Innovation is more than just new
In order for something to be innovative, it must first be new. This is true.
But new is not enough. It needs to be novelty+.
Innovation is evolutionary in nature. It follows a rational growth trajectory connected to it’s heritage, to what came before. More than that, innovation leverages heritage to anticipate customer and market needs, and orchestrates a path forward towards a future state. It responds to data but projects that data forward and anticipates the next phase in the evolution of a market.
“Some people say give the customers what they want, but that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘if I’d ask customers what they wanted, they would’ve told me a faster horse.’ People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.” — Steve Jobs
Innovation is anticipatory.
It’s evolutionary.
It’s driven by belief.
And it’s pretty, damn, scary. Especially to those of us who operate behind the corporate shield and don’t deal with it day in and day out. It’s chaotic and makes you sea sick, leaves you flailing around at sea without an anchor, and makes anyone that comes near it feel exposed.
Innovation doesn’t make people smile. Maybe on the other side once the dust settles and you come out ok. But not while you’re in it. While you’re in it, it makes people stressed. Vulnerable. It makes people flustered and a bit agitated. It makes people nervous. There’s a power to it, a gentle buzz behind the tension, but for you really have to listen out for it. Innovation isn’t easy, it demands resilience and perseverance, an optimism to rally against unfavourable odds. It demands a certain type of leader, one with boundless energy and a passion that burns bright and positive to lead the way through the night.
Disruption is even bigger than that.
“Those who disrupt their industries change consumer behavior, alter economics, and transform lives.” — Heather Simmons
Disruptive innovation fundementaly changes how we work and live. It’s often driven by a step change in underlying technology which disrupts the dynamics of industries as a whole. This creates white space for agile and fast businesses to seize that space and build for it, building a disruptive force that slowly moves to dismantle the old world order and replace it with the new. While the forces disruption unleashes are powerful, the pace at which they take hold can be relatively slow. This kind of revolutionary change doesn’t happen overnight,
“Disruptive technologies typically enable new markets to emerge.” — The Innovators Dilemma, Clayton Christiansen
Because disruption is driven by a change in the underlaying fabric of a sector, it is usually agents outside of that sector that can see the opportunity coming and act fast enough to take hold. Small, agile businesses able to jump in and make decisions quicky and opportunistically, take on risk and rally resources are potiioned to win in a disrupted enviroment.
“The process in which a smaller company, usually with fewer resources, is able to challenge an established business (often called an “incumbent”) by entering at the bottom of the market and continuing to move up-market.” — Harvard Business School Online
The internet enabled new operating and commercial models. With that, Netflix disrupted pay TV. Amazon disrupted retail. AirBnB disrupted hotels. Uber disrupted urban transport. In each of these examples the industry was forever impacted.
Does that come anywhere close to a new type of toothpaste? Or a new mobile phone tariff? Or a new PTV bundle? Hardly.
Disruption is revolutionary.
It’s speculative.
It’s driven by gut instinct.
And it’s flipping terrifying. Even to those who have been through it before. No one in the midst of doing or experiencing disruption is smiling. It’s serious business that can leave whole industries and companies in ashes. If the disruption is successful it will fundamentally alter how capital is spent and where people are employed. Disruption has mass. It has density. It’s a heavy load to carry. It’s certainly not light hearted. And it demands a leader that’s poised and able to carry it. Push it along with a balanced serenity and cognition of the stakes. Disruption doesn’t make people smile. It makes people stoic.
Let’s recap.
We have 3 domains of change. Any one is not necessarily better than the other. They have different profiles and achieve different aims.
Domain 1 - novelty.
Domain 2 - innovation.
Domain 3 - disruption.
Risk and volatility increases as you move from 1 to 3. The probability of success moves inversely to that, it reduces from 1 to 3. The ideas become increasingly speculative and it becomes easier to swing and miss. As a consequence value generation isn’t always bigger the further out you go. There is a lot of value to be captured in all 3 domains, but they way you capture it is different, and what it means for teams and businesses varies.
Simply put
Domain 1 - novelty — data-driven iteration, driven by insights and in response to the market
Domain 2 - innovation — demands a leap of faith from leadership teams and held up by unwavering belief in the face of challenge
Domain 3 - revolution — gut-driven speculation that follows a hunch with quick decision making and comfort with ambiguity
And let’s try a hockey metaphor
Thank you Wayne Gretzky:
Stage 1 - novelty — skating to where the puck is.
Stage 2 - innovation — skating to where the puck is going to be.
Stage 3 - disruption — moving to a new hockey rink.
Let’s talk about emotions, baby
Each domain has a different emotional profile.
Have you ever tried to get a stop sign put on your road? Or get a tree planted? I have. And I’ve seen the community revolt that comes from attempting even the most minor and innocent of tweaks to the status quo. Emotions go off the charts. As a species we are allergic to the notion of ‘new’ and ‘change’, no matter how well intentioned and obvious the change appears to be.
“Innovators need a heavy dose of faith. They need to trust their intuition that they are working on a big idea. That faith need not be blind.” Clayton Christensen
Why am I saying this? If I can’t get normal people to accept that a new tree in the neighbourhood is a good idea, what chance do you have with a truly innovative or disruptive idea and a team of strongly minded executives?
That’s the thing. If your CMO is smiling while talking about innovation or disruption, then that’s your first sign you’re not talking about innovation or disruption. If they were, they’d be dead, flipping, serious. They’d be scared. Anxious. Talking too much. They’d be trying to get you to be the face of the project instead of them. They’d be playing devil’s advocate. They’d be rallying the invisible army — “Everyone I talk to thinks this is a bad idea.” They’d be ready with rational and emotional arguments, building contingency plans and looking to spread the accountability.
If your CMO is excited, it’s because they’re talking about novelty.
Full stop.
Best course of action is usually to let them. No one likes a smart ass, especially not one who is pointing out pedantic definitions. But it’s important that someone, somewhere, understands the difference. Because the way value is created in novelty, innovation and disruption is different. Each has it’s own blueprint. It’s own risks and reward profiles. It’s own methodologies for allocating resources and making decisions. So while steering clear of a pedantic argument may be wise, keeping a pulse on the reality of what a business is doing to aid in steering it is doubly so.
Go forth, and build novelty, innovation and disruption. Where ever you are.
Welcome. I’m Jo. I’ve spent 15 years building D2C businesses and OTT products that changed how we consume content. I write about commercial development and growth strategy in tech, media, and web3. I respond to all comments.
