James Allworth

James Allworth: Disruptive Innovation

Editor’s Note: James Allworth is the director of strategy at Medallia. He is a Harvard Business School graduate. Previously he worked for ‘Apple’, ‘Booz & Company and co-authored New York Times best seller  ‘How will you measure your life. He is a writer at Harvard Business Review and a fellow of Professor Clay Christensens think-tank on Innovation. His work has been featured on bloomberg, business insider and reuters.

eTalk’s Niaz Uddin has interviewed James Allworth recently to gain his ideas and insights about Disruptive Innovation which is given below.

Niaz: James, you have been working with the father of disruptive innovation, Clay Christensen’s, for long time. You have done so many works in the field of Disruptive Innovation. Can you please give us a brief description of disruptive Innovation?

James: Disruptive innovation is the process by which novel technologies or business models — often times, vastly inferior to the existing solution — start at the bottom of the market, and by gradually getting better, move to replace the existing solution. Professor Christensen first identified the phenomenon when studying the disk drive industry; but it applies widely. Generally, the competitors start off being considered little more than “toys”, but by being vastly more accessible (both in terms of price and in terms of necessary expertise) they slowly move upmarket and take over the market. Once you understand how it happens, you’ll see it all over the place.

Niaz: What are the major examples of Disruptive Innovation to you?

James: There are examples everywhere. One of my favorite industries to look at is the computing industry. We started with mainframes, they were displaced by minicomputers, which in turn was displaced by the personal computer, then the laptop, and now the PC and laptop is being threatened by tablets and smartphones. In each case, the disruptive entrant had lower performance than the previous solution; often they were cheaper, too.

What’s really fascinating is that industries that have previously been immune to disruption are staring down the barrel of it right now. The internet is enabling all this to happen — whether it be Netflix threatening cable; or Uber threatening entrenched taxi monopolies; or Airbnb going after the hotels.

Niaz: So now, if we would like to differentiate innovation and disruptive innovation, what will be the core basis?

James: The performance of the solution is generally inferior to what was available previously, but it’s cheaper and more accessible. The array of programming options on cable, for instance, is vastly greater than Netflix. But Netflix is much cheaper. Hotels compete on the quality of the appointments and amenities; Airbnb is unlikely to be able to beat that head on, but by leveraging the internet and utilizing what would otherwise go to waste (people’s rooms) then they’re able to compete on a different axis of performance.

What’s also noticeable about disruptive innovation is that it’s rarely just technical innovation that drives it, but also business model innovation. Professor Christensen and Max Wessel wrote touched on this in their recent HBR article, on surviving disruption. There’s an “extendable core” in disruptors that enable them to topple the incumbents.

Niaz: Is it possible to disrupt Google? How?

James: Well, those are very big questions.

Google is interesting because it’s made its fortune disrupting others. But in becoming a big organization, it has created an Achilles heel just like any other big organization has — in its case; it has a very big addiction to advertising revenue. A French ISP just built ad blocking into its service by default — now, it looks like they have subsequently backed down (example here), but something like that becoming commonplace would make life very difficult for Google.

Niaz: As you know YouTube has been a great revolution. It has been changing the way we create and share art. Do you see any disruption in the way we create art? Will it be a concept like ‘Disruptive Art’

James: The wonderful thing about YouTube is that it’s created a publishing platform that anyone can gain access to, and you don’t need a lot of resources to do so. It’s enabled people to reach an audience they otherwise could not. You don’t need to have a deal with a big media company to create a movie or even a TV series now and get it published; artists and regular folks are now able to create a relationship directly with their fans. It’s this ability for the creator to get directly in touch with the fan/consumer that is what is so cool about YouTube and its ilk.

You’re already starting to see artists experiment with new business models that leverage this.

Niaz: Till today, technology and innovation mostly belong to Silicon Valley? What do you think about the core challenges for developing countries and their organizations to be innovative? How can they come up with disruptive innovative ideas, make things happen and sustain in the long run?

James: Disruption often starts out where there is non-consumption — where people can’t afford the existing solution. That means that emerging markets are going to be hotbeds of activity for disruptive innovation. You’re already starting to see this happen, with the $20 tablet from India for example: (click)

Niaz: Finally, our readers will love to know about your amazing book ‘How will you measure your life’. Can you please give us a brief of this life changing book?

James: The book is based on Professor Christensen’s class at Harvard Business School, using the theory to answer the big questions you really need to be asking about your life and your career. At no point do we claim to have the answers; it’s going to be different for everyone, so instead, we use the business theory to help equip readers with the tools required to find the answers for themselves.

We managed to make the New York Times best seller list, which we’ve just been humbled by. If your readers are interested in finding out more, details are up on the website (here), including a free excerpt.

Niaz: James, thank you so much for your time. I am wishing you very good luck for everything you do.

James: Thanks Niaz, and all the best!

_  _  _  _  ___  _  _  _  _

Further Reading:

1. Horace Dediu on Asymco, Apple and Future of Computing

2. Viktor Mayer-Schönberger on Big Data Revolution

3. Gerd Leonhard on Big Data and the Future of Media, Marketing and Technology

4. Brian Keegan on Big Data

5. Irving Wladawsky-Berger on Evolution of Technology and Innovation

6. Ely Kahn on Big Data, Startup and Entrepreneurship

7. danah boyd on Future of Technology and Social Media