Professor Dimitrios Spyridonidis MRCVS

Innovation and disruption demystified

Dimitrios Spyridonidis MRCVS, Associate Professor of Entrepreneurship & Innovation at Warwick Business School, sought to demystify innovation and disruption.

He explained that innovation was often still thought about in the same way as it was 20 years ago – as an incremental process. However, developments were now happening so rapidly that, while incremental progress remained important, ways of thinking about innovation had to change.

The term ‘disruptive innovation’ had been coined by Clayton Christensen, an American scholar and business consultant. He had suggested that many companies spent too much time, energy and resources focusing on improving their services incrementally, moving themselves towards the higher end of the market. However, by doing this, they overlooked the needs of the lower end of the market, which allowed a void to develop. This void could then be filled by new entrants using technology in a new, radical way. As a result, the market would be disrupted and, in some cases, the incumbent companies would be unable to react quickly enough.

The perfect innovative company needed to think in terms of both incremental progress and disruptive progress, Professor Spyridonidis said, although maintaining a balance between them could be difficult.

Disruptive innovation was occurring on a daily basis, he said, citing examples such as Uber and Airbnb in the private hire and travel accommodation industries respectively. However, in the early stages of disruptive innovation, the potential for disruption often went unnoticed. Companies therefore needed to pay close attention to what was happening in their marketplaces.

Innovation could involve improving existing products and services offered to existing customers. It could also involve offering new services and products. However, he said, innovation was also about removing elements that did not help a business move forward – the ‘waste’ or slow-growing areas or services. Innovative businesses looked at all areas.

Disruptive innovation was occurring on a daily basis, he said, citing examples such as Uber and Airbnb in the private hire and travel accommodation industries respectively. However, in the early stages of disruptive innovation, the potential for disruption often went unnoticed. Companies therefore needed to pay close attention to what was happening in their marketplaces.

He warned that a company – or profession – that thought only in terms of incremental innovation and overlooked disruptive innovation, ran the risk of others encroaching on and disrupting its area of interest.