HBR On Strategy: Episode Summary - "Innovation Doesn’t Have to Be Disruptive"

Release Date: October 30, 2024
Host/Author: Harvard Business Review
Description: Business strategy isn’t a plan, it’s a framework for success. This episode explores the concept of non-disruptive innovation—a framework for creating new markets without displacing existing ones.

Introduction to Non-Disruptive Innovation

In this enlightening episode of HBR On Strategy, host Kurt Nich engages in a deep conversation with Renee Mauborn, a professor of strategy and management at INSEAD and co-author of the book Beyond Innovate and Achieve Growth without Displacing Industries, Companies or Jobs. The discussion centers on redefining innovation beyond the commonly held notion of disruption.

Renee Mauborn introduces the concept of non-disruptive creation, emphasizing that innovation doesn't necessarily have to disrupt existing markets, jobs, or communities. This approach focuses on creating entirely new markets, fostering growth without the detrimental side effects often associated with disruptive innovation.

“[04:08] Renee Mauborn:…you can also create with no disruption and no displacement. And that allows companies to not only innovate, but in doing so, achieve social good.”

Disruptive vs. Non-Disruptive Innovation

The traditional view of innovation, rooted in Joseph Schumpeter’s concept of Creative Destruction, posits that creating new products or services often involves disrupting existing markets. However, Mauborn challenges this perspective, advocating for the possibility of fostering innovation that expands the economic landscape without tearing down established structures.

“[05:26] Kurt Nich: …if I can create without displacing industries, companies or jobs. And as we know, increasingly employees want to believe that the company they work for… you are adding.”

Muriel Wilkins probes into the social ramifications of disruptive innovation, questioning whether the social costs—such as job losses and community impacts—are often underestimated or rationalized away.

“[05:53] Renee Mauborn: …explore non disruptive opportunities… we are not destructive, we’re positive.”

Real-World Examples of Non-Disruptive Creation

Mauborn provides compelling examples of non-disruptive innovation that have led to the creation of billion-dollar industries without displacing existing ones:

1. Square: Revolutionizing credit card transactions for small merchants by enabling them to accept payments via mobile devices, thus creating a new market without displacing traditional payment processors.
2. Microfinance: Offering financial services to individuals without access to traditional banking, thereby creating opportunities without disrupting existing financial institutions.
3. 23andMe: Pioneering direct-to-consumer genetic testing, establishing a new industry without displacing genealogical or medical testing services.
4. Esports: Establishing a massive new market in competitive gaming that complements rather than replaces traditional sports or video gaming industries.

“[10:40] Kurt Nich: …it's creating new markets by looking to problems that people have that have been unaddressed…and to solve them.”

Operational Advantages of Non-Disruptive Creation

Mauborn outlines four key operational advantages of non-disruptive creation:

1. Market Expansion: Opens up entirely new markets rather than shrinking existing ones.
2. Social Good: Aligns business growth with societal benefits, enhancing corporate reputation.
3. Employee Morale: Maintains job security and community stability, fostering a positive workplace environment.
4. Sustainable Growth: Enables long-term growth without the volatility associated with disruptive upheaval.

“[07:55] Kurt Nich: …non disruptive creation is creation without destruction… microfinance opened up a billion dollar industry.”

Non-Disruptive Creation in the Age of AI and Technological Shifts

The conversation delves into the implications of the fourth industrial revolution, characterized by rapid advancements in AI, robotics, and smart machines. Mauborn emphasizes the urgency of non-disruptive creation in this context to mitigate the potential massive job displacements caused by technological advancements.

“[16:21] Kurt Nich: …We are entering what we call the fourth industrial revolution… non disruptive creation is it creates new jobs and new industries without displacing others.”

Challenges and Stumbling Blocks

While non-disruptive creation offers significant benefits, Mauborn acknowledges several obstacles to its implementation:

1. Mindset Shift: Transitioning from a disruption-centric view to one that prioritizes creation requires a fundamental change in thinking.
2. Imaginative Thinking: Encouraging stakeholders to envision what could be, rather than accepting the status quo, is essential.
3. Operational Reframing: Organizations must develop new operational frameworks to support the creation of entirely new markets.

“[20:20] Mauborn: …we talk about this is where non disruptive has advantage because it actually is emotionally more… acceptable… to pursue that which is non disruptive.”

Steps to Foster Non-Disruptive Innovation

Mauborn offers actionable steps for organizations aiming to embrace non-disruptive creation:

1. Identify Unexplored Problems: Focus on persistent issues that have been overlooked or deemed unsolvable.
2. Leverage Emerging Opportunities: Capitalize on shifts in economics, demographics, and technology to create new markets.
3. Encourage Imaginative Thinking: Cultivate a culture that prioritizes “what could be” over “what is.”
4. Build Collective Confidence: Develop organizational competence and confidence to pursue non-disruptive opportunities.

“[21:03] Kurt Nich: …most people use their imagination to imagine why something can’t happen. Non disruptive creation… focus on how you can make it happen.”

Conclusion: Embracing a Brave New World of Innovation

The episode concludes with an optimistic view of the potential for non-disruptive creation to reshape the business landscape. By expanding the horizon beyond disruptive innovation, companies can achieve sustainable growth, enhance societal well-being, and create new economic opportunities without the negative fallout of displacement.

“[23:22] Muriel Wilkins: …you've given us a glimpse of that brave new world that more companies can be going after.”

Renee Mauborn and Kurt Nich advocate for a broader, more inclusive approach to innovation—one that not only drives profitability but also fosters social good and community stability.

Key Takeaways

• Non-Disruptive Creation offers a pathway to innovation that expands markets without displacing existing industries or jobs.
• Real-world examples like Square and 23andMe illustrate the viability and success of this approach.
• Embracing non-disruptive innovation requires a shift in mindset, imaginative thinking, and strategic operational planning.
• In the face of rapid technological advancements, non-disruptive creation becomes increasingly critical to sustainable economic and social growth.

Notable Quotes:

• “[04:08] Renee Mauborn: …achieve social good… opening up a new terrain.”
• “[10:40] Kurt Nich: …creating new markets by looking to problems that people have that have been unaddressed.”
• “[16:21] Kurt Nich: …AI is seamlessly intertwined with every project, team and goal.”
• “[21:03] Kurt Nich: …use your imagination to focus on how you can make it happen.”

For More Insights:

To delve deeper into strategies for non-disruptive innovation and explore additional case studies and expert conversations, subscribe to HBR On Strategy on Apple Podcasts, Spotify, or your preferred podcast platform.