Tuesday, November 10, 2020

g-f(1)15 Innovators must ask five critical questions to anticipate the trajectory and impact of a disruptive value proposition

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There are many more disruptive innovations to come — indeed, the next one may be at your company. To prepare for the best possible outcome, it is important to understand not only the reach of an innovative idea but also the risks that lie in its path to realization. With our eyes open to confront uncertainties around the technology, ecosystem, and business model of each potential disruption, we can better understand what to expect along the way and better devote the time and resources to strengthen our chances of success.

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Pursuing a disruptive innovation means taking on risk that the effort may fail. The following five questions can help innovators — incumbent companies and startups — manage uncertainty.
  1. What are the opportunities for a disruptive value proposition? Opportunities can be related to creating new markets, such as space tourism, or penetrating existing markets, such as global tourism.
  2. Where are the key sources of uncertainty — technology, ecosystem, and business model — in different markets? Uncertainty doesn’t have to be prevalent across all areas. It is typically a subset of the three sources that can create bottlenecks for market growth. Management practices such as scenario planning and discovery-driven planning can be more effective if they explicitly incorporate the different sources of uncertainty. 
  3. How can the different sources of uncertainty be addressed? Experimentation with respect to customers and others in the ecosystem, business models, and technology choices can be valuable in resolving uncertainty. However, if uncertainty is severe across the three sources, decision makers may need to say no to investments at the outset or stop specific disruptive innovation initiatives.
  4. Can I pursue this disruption on my own, or do I need strategic partners in the ecosystem to help resolve uncertainty? Identification of ecosystem activities and actors where uncertainty resides — and coordination among them — can be a critical aspect of managing such uncertainty.
  5. How can I align partners to cocreate value? Partners can have different business models and motivations around the disruptive value proposition. It is important to identify which partners may have mutually beneficial objectives and to ensure that those objectives are aligned for the long run.

Category 1: A new, better world for everyone

[genioux fact extracted from MIT SMR]

Authors of genioux fact

Fernando Machuca


Innovation’s Uncertainty Factor, Rahul Kapoor and Thomas Klueter, July 28, 2020, MIT Sloan Management Review, MAGAZINE FALL 2020 ISSUE.

Rahul Kapoor is a professor of management at the Wharton School at the University of Pennsylvania in Philadelphia. Thomas Klueter is an associate professor of entrepreneurship at IESE Business School at the University of Navarra in Barcelona.

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