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Disruptive technology, ACES and disruptive economics
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A rock pile ceases to be a rock pile the moment a single man contemplates it, bearing within him the image of a cathedral.
– Antoine de Saint-Exupery
In 1910, you sliced bread at home, crookedly, with a knife. Fortunately, inventor Otto Rohwedder saw a bread loaf as Saint-Exupery saw a rock pile. Rohwedder imagined a bread-slicing machine in 1910 and commenced to build one. Seven years in, he saw a fire destroy his startup factory, but his dream persisted. Finally, on July 7, 1928, the Chillicothe Baking Co. became the world’s first bakery to offer Rohwedder’s machine-sliced bread. As you know, the craze swept the country.
Rohwedder’s Mac-Roh Sales and Mfg. bread slicer – a disruptive technology to bakers who didn’t own one – transformed a common commodity into a sought-after necessity.
It happened with computer-cut signs in the ‘90s and more so, lately, with the ever-rising acceptance of digital printing.
Sirius XM satellite radio is presently experiencing disruptive-technology damage from iPhones. It has lost more then 400,000 customers (who would rather plug and play their iPhones) this year.
Sirius XM, apparently, didn’t see iPhones coming.
In his book, The Innovator’s Dilemma, Harvard Business School associate professor Clayton M. Christenson writes that good management is the most powerful reason companies fail to stay atop their industry. He quotes Sears as a classic example. Until recently, and although impeccably managed, Sears failed to see and embrace the big-box-store trend.
Christenson wrote, “It’s precisely because such firms listen to their customers, [and] invest aggressively in new technologies that bring their customers more and better products of the sort they wanted, and because they carefully studied market trends and systematically allocated investment capital to innovations that provided the best returns, they lost their position of leadership” (my italics).
Christenson said many, widely accepted principals are only situationally appropriate. He said you shouldn’t always listen to your customers. And, it’s okay for businesses to invest in developing lower-performance products that promise lower margins. He also assured readers that it’s acceptable to pursue small, rather than substantial, markets.
Business owners, in hard times, are often advised to explore innovative ideas and revenue sources, but they also need to search for unidentified liabilities, such as disruptive technologies and, today, disruptive economics.
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