Disruptive Innovation vs. Self-Sustaining Innovation
Stop chasing disruptive innovation, focus on sustainable innovation. It seems that more and more entrepreneurs understand the importance of innovation but why is that exactly?
Innovation in the workplace
Innovation in the workplace is essential because it gives a company an advantage in opening markets more rapidly and creating better connections to developing markets, which can lead to greater opportunities, particularly in developed countries. If a company has an innovative culture, it will grow, although the creative idea-finding process is not always easy. So naturally, it may seem more convenient to stick to well-known and proven methods – but trying out new ones will often bring more encouraging and rewarding results.
Innovation at companies
Digitization, globalization, sustainability and other current megatrends seem to speed up the development of disruptive technologies and overthrow many established companies in all business fields. Companies face the problem that even though they do everything correctly, they end up losing market shares. The Innovator’s Dilemma, first mentioned by Clayton M. Christensen, goes on to explain this phenomenon. When established companies are not able to live up to their customers’ expectations, they reach a point where they can no longer offer enough incremental value. This is when companies are more likely to become attracted by so called disruptive innovations, which are still at an early stage of their innovation cycles and, thus, able to offer maximal incremental value, until they reach the point of maturity. This cycle repeats itself constantly – a new product enters the market, an old one leaves the market. Sound familiar? But there is a way to break this cycle.
How to break the cycle of disruptive innovation
One way to break the cycle is by keeping companies fit through a continuous innovation regimen. Creating the governance, processes and culture that allows a company to always be ready to either initiate the innovation cycle through a disruption of their own making, or rapidly adapt when the change comes.
This fitness also means that companies will not always immediately live up to their customers’ expectations, given that disruptive innovation is defined by an S-curve – starting with little to no benefit for the customer. However, once the base is set, the benefits skyrocket exponentially until a peak is reached. Thinking in terms of sustainable innovation can help avoid this problem.
The meaning of sustaining innovation
Most companies see innovation as buying a lottery ticket, hoping that at some point they hit the jackpot with the newest cycle of disruptive innovation. This approach is neither likely to succeed nor provide any lessons for the future. Sustainable innovation invests in a company’s most valuable asset: its employees and their understanding of their customers. This approach is aimed towards enabling employees to thrive, by providing a business environment with an entrepreneurial mindset, philosophy and values. A company that encourages an inspiring corporate climate, supports employees in continuously and sustainably exploring, learning, experimenting as well as brainstorming for new products, services or business models. The employees can steadily focus on their customers’ needs and desires to improve the overall customer experience and find new ways to solve their needs.
This way, by listening to stakeholders and the environment, companies are able to maintain a linear and steady innovation cycle which takes the customers’ expectations into account at all times. Additionally, step by step, they improve their performance and reduce their costs.
In the mid to long term, the continuous learning that comes from sustainable innovation not only builds a strong innovation portfolio but also a healthy business.
Becoming sustainably innovative
As the importance of building an organization for sustainable innovation to achieve long-term success becomes clearer, other questions arise:
- How can you encourage the shift?
- How do you know what your offer lacks?
- How does your company become sustaining innovative?
What does corporate culture mean?
There are many elements which define a sustaining innovative company, such as a clear and focused innovation and business strategy. Knowing and understanding customers’ needs and the necessary resources to do so are essential as well. But even more important is the role of the corporate culture. So, what does corporate culture mean? Corporate culture is generally understood as a system of shared patterns of thinking, feeling and acting as well as the norms, values and symbols that convey them within a company. This set of shared values, norms and attitudes shapes the decisions, actions and behavior of all organizational members. Thus, the corporate culture has an effect at every level of management; within decision-making, leadership behavior, leadership culture, within relations with colleagues, customers and suppliers.
Corporate culture shapes self-sustaining patterns of thinking, behaving, feeling and believing within an organization. Employees inside the company living this corporate culture are the most important drivers of self-sustained innovation. A company without a well-defined cultural base will struggle to bring sustaining innovation to light. High creativity and productivity are good indications for an innovative business culture. And this innovative culture is dependent on every single individual. If you want your employees to be creative, they need to feel comfortable in their environment.
To provide your employees with such an environment, the way of working needs to be newly defined by raising new, innovative ideas in groups, respecting everyone’s contributions and spreading motivation throughout the company. As a company leader or manager, it is your responsibility to provide an appropriate environment, to live the company values and integrate them into the everyday working environment as a role model. The way you criticize or praise, whether you keep agreements or postpone promises, whether strategies and goals are openly communicated or shared exclusively with a selected top-management team. All this shapes the actions of all employees within the company. In other words: much of the responsibility lies in your hands. Foster a positive corporate culture and the employees within your company will follow your example.
The core of self-sustaining innovation: the people within your company
To summarize, while disruptive innovation is about new business fields with an unknown target group and high risks, self-sustaining innovation is all about the people within a company, starting from the people running it. It is worth investing in corporate culture through sustaining innovation to enhance performance and a positive image: a successful corporate culture ads pure value – and fun because in a culture of openness and appreciation, everyone enjoys coming to work. So, everyone forms an important part in supporting a desirable business culture, essentially the foundation for your company’s sustainable success. By working together, you can find creative solutions and keep self-sustaining innovations running. With that, you will meet your customers’ ever changing needs.
How Spark Works supports you in developing an appropriate business culture for your employees in Switzerland
Many companies struggle to foster the creative potential of their employees. Want to support them in increasing their ability to innovate?
At Spark Works, we will help you embed the methods and tools of Human-Centered Innovation to build and keep an innovative culture within your company. For example, our Enablement Program, which was designed with one of our clients, allows their employees from around the world to be certified as change agents or enablers of change. This program offers participants the opportunity to learn in theory and practice how to work or coach others to work in an agile and customer-centric way.
Coming up in the next blog
It is one thing to be aware of the changes that need to be made. But how can you ensure the implementation of an innovative business culture? Learn about five strategies to foster self-sustaining innovation in your company in our next article!
By Linda Armbruster, Design Partner
Some links to explore more
- Matzler K., Eichen S. (2012) Innovators Dilemma. In: Granig P., Hartlieb E. (eds) Die Kunst der Innovation. Gabler Verlag, Wiesbaden
- Rieger, V. (2018). Kultur und Innovationen: Empirische Studien auf Ebene von Ländern, Organisationen und Teams. Springer-Verlag, Berlin.