"Innovation" has become the business buzzword of the 21st century. It's used to describe everything from new products to restructured business models. But the leading movers and shakers in business recognize that the true challenge is the concept of disruptive innovation.
Innovation refers to a new product or service that comes on the scene and winds up fundamentally changing the market. Companies that pioneer (or survive) a disruptive innovation in their industry thrive in the new market; those that don't are rendered obsolete.
Today, we typically see three broad categories of disruptive innovation:
1. The new kid on the block
The easiest way to survive a new force in the market is to help pioneer it. Apple's iPod player and iTunes music service took advantage of a sea change in the way consumers accessed music. By offering songs in digital formats at a reasonable price, Apple pioneered innovative technology to harness consumer dissatisfaction with the old music industry distribution model and disrupt the entire category.
CD manufacturers and brick-and-mortar record stores were the ones that needed to innovate. Those that didn't were relegated to a niche market for vinyl enthusiasts or they disappeared altogether while iTunes changed the consumer music industry forever.
2. Quick and agile
When streaming video emerged, young, nimble video rental companies, such as Netflix, recognized the need to innovate and landed upon a formula for success. Though industry giants like Blockbuster had clearly established market dominance, they were too slow to respond to the changing market.
Because of Netflix's agile business model, the company was able to pivot from mail rental DVDs to streaming video.
Blockbuster, on the other hand, stayed true to its original model of video rentals. As a result of its lack of innovation, Blockbuster lost its market share and faded into obscurity.
Often, the start-ups operate on a business model that allows for such a pivot, while the big brands are left in the dust.
3. Big business and bold moves
But when a large, established company successfully risks a major pivot to combat disruptive innovation, it's impressive.
When Amazon's Kindle e-reader changed the way people purchased and read books, Barnes & Noble quickly released the Nook to capture its share of the digital book market and stave off the bankruptcy that many market analysts were predicting.
Disruptive innovation requires disruptive marketing, and brands must be brave enough to risk new product-centric approaches for reaching their target markets. Brands must be just as creative with their product launch as with their products themselves.
Consider the approaches some successful launches have employed in recent years.
- Move with purpose. TOMS hit upon a winning formula with its One for One platform when it adopted a cause that was easy for people to support. For every pair of shoes it sold, TOMS donates a pair to a person in need. The approach was an innovative reaction to a market that increasingly wants their purchases to stand for something. TOMS disrupted both brand-building and startup-building, integrating its social platform so deeply and seamlessly into its model that TOMS is consistently regarded as a gold standard of purpose-driven marketing.
- Push the boundaries. In the 48 hours following Dollar Shave Club's release of its "Our blades are f***ing great" video, 12,000 people signed up for its service. There wasn't much about its launch that wasn't disruptive. From its dollar-a-month price structure to its CEO cutting up with risqué language in the viral video, the company flew in the face of traditional marketing strategies. Its launch proved the immense value that can come from ignoring the status quo.
- Listen and respond. In 2007, the band Radiohead released its seventh studio album like no major musical act had before. "In Rainbows" was priced on a pay-what-you-want structure, offering the album to fans for any amount they wanted to pay—including nothing. The tactic was meant to combat pre-release leaks and music piracy, but it wound up creating a maelstrom of media coverage and controversy. The album sold more than 3 million copies in the first year following its release, and Radiohead gave studios a new model to drive music sales.
- Embrace the pivot. Sabra leads the market in hummus sales, but its lesser-known products weren't catching on as quickly as the company liked. When Sabra was named the official dips sponsor of the NFL in 2013, the company used the platform to introduce football fans to tzatziki, a yogurt-based dip popular in the Mediterranean. The problem? It was new, and no one could pronounce it. So, Sabra reintroduced the product as "greek yogurt dip"—same ingredients, same taste, different name. Sabra watched the market closely and executed a pivot to respond to an unexpected hiccup in its launch strategy.
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In a world where brands can become obsolete almost overnight and culture shifts occur at an unprecedented rate, product launch is the only true manifestation of a brand's innovation.
Today's most powerful brands are learning that conventional brand-building strategies are incomplete without the focus of a product-centric approach that enables brands to think outside the box, bravely grasp unexpected opportunities, and listen to their consumers. In short, brands can either prove their innovation by strategically launching products, or they can become irrelevant.
