It was invented by Clayton Christensen, of Harvard Business School, in his book “The Innovator´s Dilemma”. Christensen used the term to describe innovations that create new markets by discovering new categories of customers.

He contrasted disruptive innovation with sustaining innovation, which improves existing products.

Empirical teste show that using disruptive theory makes us measurably and significantly more accurate in our predictions of which businesses will succeed.

The “innovator´s dilema” is the difficult choice an established company faces when it has to choose between holding an existing market by doing the same thing a bit better, or capturing new markets by embracing new technologies and adopting new business models.

Disruptive innovations usually find their first customers at the bottom of the market: as unproved, often unpolished, products, they cannot command a high Price. Incumbents are often complacent, slow to recognise the threat that their inferior competitors pose.

Clayton Magleby Christensen is an American business consultant, Professor of Business Administration at the Harvard University, is expert on innovation and growth. From 1979 to 1984 worked as a consultant and Project manager with the Boston Consulting Group (BCG),where worked strategy consulting. In 2000, Christensen founded Innosight a consulting firm that uses his theories of innovation to help companies create new growth businesses. In 2007, he founded Rose Park Advisors, a firm identifies and invests in disruptive companies.

The theory of disruptive innovation, has proved to be a powerful way of thinking about innovation-driven growth. Many leaders of small, entrepreneurial companies praise it as their guiding star; so do may executives at large, well-established organizations. This theory has been enormously influential in business circles and a powerful tool for predicting which industry entrants will succeed.

“Disruption” describes a process in which a smaller company with fewer resources i sable to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their products and services for their most demanding customers, they exceed the needs of some segments and ignore the needs of orders.

Disruptive innovations origínate in low-end or new-market footholds. In a new-market footholds, disrupters create a market where none existed. Put simply, they find a way to turn nonconsumers into consumers. Disruptive innovations don´t catch on with mainstream customers until quality catches up to their standards. Are initially considered inferior by most of an incumbent´s customers. The customers wait until its quality rises enough to satisfy them. Once that´s happened, they adopt the new product and happily accept its lower Price.

Disrupters often build business models that are very different from those of incumbents.

Some disruptive innovations succeed; some don´t. Companies that rise to the top in very different ways will be seen as sources of insight into a common strategy for succeeding. Managers may mix and match behaviours that are very likely inconsistent with one another and thus unlikely to yield the hoped-for result. When an entrant tackles incumbent competitors head-on, offering better products or services, the incumbents will accelerate their innovations to defend their business.

Incumbents rarely responded effectively to disruptive innovations, not why entrants eventually moved upmarket to challenge incumbents, over and over again. The same forces leading incumbents to ingore early-stage disruptions also compel disrupters ultimately to disrupt. Researchers realized that a company´s propersity for strategic change is profoundly affected by the interests of customers who provide the resources the firm needs to survive. Incumbents listen to their existing customers. Incumbents´s focus on their existing customers becomes institutionalized in internal processes that make it difficult for even managers to shift investiment to disruptive innovations.

New-market disruptions take hold in a completely new value network and appeal to customers who have previously gone without the product.

The theory with the time has become more powerful and practicable.

Bibliography:

• Clayton M. Christensen, “The Innovator´s Dilemma”, Harvard Business School Press, 1997
• Clayton M. Christensen, Michael E. Raynor, Rory McDonald, “ What is Disruptive Innovation?, Harvard Business Review, December, 2015
• Clayton M. Christensen, “Strategy & Innovation”,
• A. W., “What disruptive innovation mean”, The Economist, Jan, 2015
• Daniel Goleman, “Leadership & Managing People”, 2017

• Wikipedia

Links relationated:

• Clayton M. Christensen

http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6437

• Innosight

http://www.claytonchristensen.com/ideas-in-action/innosight-consulting/

• Disruptive innovation

https://www.youtube.com/watch?v=rpkoCZ4vBSI