Clayton Christenson’s theory of disruptive innovation has had enormous influence on management thinking and investor’s approach to information technology.
The basic idea is explained at his web site.
As companies tend to innovate faster than their customers’ needs evolve, most organizations eventually end up producing products or services that are actually too sophisticated, too expensive, and too complicated for many customers in their market.
Companies pursue these “sustaining innovations” at the higher tiers of their markets because this is what has historically helped them succeed: by charging the highest prices to their most demanding and sophisticated customers at the top of the market, companies will achieve the greatest profitability.
However, by doing so, companies unwittingly open the door to “disruptive innovations” at the bottom of the market.
- See more at: http://www.claytonchristensen.com/key-concepts/
The magazine industry has been a textbook case of this disruptive innovation in the way that the established industry leaders have reacted to the opportunity presented by mobile devices and tablet technology. Both the magazine companies (Hearst, Time Warner, Condé Nast and the major publishers) and their suppliers — Adobe in particular, have seen the task of producing tablet-ready digital magazines as a challenge to produce more complicated solutions, magazines that need to be read up-and-down, left-and-right, with pages that slide or fail to adjust to landscape, and with columns that do, and sometimes do not move, with the layout. Readers have been presented with extraordinarily complicated, and extraordinarily dissimilar solutions. It is not yet generally agreed in the industry that these complex, innovative solutions do not work. It is not yet being shouted from the roof-tops, but it is no longer controversial to recognise that what users want from their digital magazines is much closer to the model of the page-based, fixed layout, consistent design, package of the print look-alike, than to the futuristic propositions that were being canvassed two or three years ago.
So where is the low-end disruption coming from? So far, the competition appears to have been coming from the incumbents themselves. The magazine publishers have been watching the sales figures and have generally decided that the page-based solution, is cheaper to produce, at least as popular with the audience and has a much higher return on investment, so the publishers are ‘disrupting’ their own earlier efforts to over-engineer the digital magazine. But Clayton Christensen’s theory tells us that these ‘low-end disruptions’ really are disruptive and they are by no means as simple as they appear to be at first glance. When Ford and GM dismissed the Toyota and its inroads with compact models, they were underestimating the way in which carefully engineered, reliable cars were changing their market. They were failing to see how hard it is to produce a really efficient and beautiful smaller car.
Something similar is happening with the page-based model for digital magazines. Producing digital magazines that can be easily and straightforwardly enjoyed through the web, and on Android and iOS devices is not a trivial matter. Furthermore the digital magazine has to do more than the print magazine. It should be searchable, it should be linkable and Tweet-able, it should work on a small format device and on a large desktop. It should be pick-upable and put-downable. It should remember where you were and be syncable if you need to dive into a tunnel. It should be obvious and it should be easy. Getting all this right is not trivial, and getting it all right creates some disruptive potential.