Big-Bang Disruption

by Larry Downes and Paul F. Nunes

By now any well-read executive knows the basic playbook for saving a business from disruptive innovation.
Nearly two decades of management research, beginning with Joseph L. Bower and Clayton M. Christensen’s 1995 HBR article, “Disruptive Technologies: Catching the Wave,” have taught businesses to be on the lookout for upstarts that offer cheap substitutes to their products, capture new, low-end customers, and then gradually move upmarket to pick off higher-end customers, too.
When these disrupters appear, we’ve learned, it’s time to act quickly—either acquiring them or incubating a competing business that embraces their new technology.
But the strategic model of disruptive innovation we’ve all become comfortable with has a blind spot.
It assumes that disrupters start with a lower-priced, inferior alternative that chips away at the least profitable segments, giving an incumbent business time to start a skunkworks and develop its own next-generation products.
That advice hasn’t been much help to navigation-product makers like TomTom, Garmin, and Magellan.

Free navigation apps, now preloaded on every smartphone, are not only cheaper but better than the stand-alone devices those companies sell.
And thanks to the robust platform provided by the iOS and Android operating systems, navigation apps are constantly improving, with new versions distributed automatically through the cloud.
The disruption here hasn’t come from competitors in the same industry or even from companies with a remotely similar business model.
Nor did the new technology enter at the bottom of a mature market and then follow a carefully planned march through larger customer segments.
Users made the switch in a matter of weeks.
And it wasn’t just the least profitable or “underserved” customers who were lured away. Consumers in every segment defected simultaneously—and in droves.
That kind of innovation changes the rules.
We’re accustomed to seeing mature products wiped out by new technologies and to ever-shorter product life cycles.
But now entire product lines—whole markets—are being created or destroyed overnight.
Disrupters can come out of nowhere and instantly be everywhere.
Once launched, such disruption is hard to fight.
We call these game changers “big-bang disrupters.”
They don’t create dilemmas for innovators...
They trigger disasters.
In this new era, strategy needs a rethink.
We’ve spent the past 15 years studying disruptive technologies and are now completing a multi-industry survey of those that defy the accepted wisdom. We’ve found that big-bang disruptions are unplanned and unintentional. They do not follow conventional strategic paths or normal patterns of market adoption.
And while there’s not a lot of evidence yet on how incumbents can survive them, we offer some strategic principles that we think can help.
A Difference in Kind
The first key to survival is understanding that big-bang disruptions differ from more-traditional innovations not just in degree but in kind.
Besides being cheaper than established offerings, they’re also more inventive and better integrated with other products and services.
And today many of them exploit consumers’ growing access to product information and ability to contribute to and share it.

Larry Downes is a fellow with the Accenture Institute for High Performance.
His most recent book is The Laws of Disruption (Basic Books, 2009).
Paul F. Nunes is the global managing director of research at the Accenture Institute for High Performance and the coauthor of Jumping the S-Curve (Harvard Business Review Press, 2011).