In the world of enterprise technology, one name towers above the rest – a mammoth. It’s a company whose hands are in so many profitable pies, it’s easy to wonder how it keeps up. Its product have changed the way we live, learn and interact. It has opened up tremendous opportunities for information distribution and sales.
Despite amassing huge wealth, the company’s motto remains “Don’t Be Evil.” That company is Google, a disruptive organisation.
Disruptive companies are the rave. They radically upturn existing ways of doing things. They look at business models and ask “Why are things done this way”? They say, “We’re going to do things differently and create new paradigms”.
Disruptive companies rip the corporate rule book to shreds, rewriting a whole new book.
According to Clayton M. Christensen who coined the term disruptive technologies, a disruptive innovation helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in a new market and later by lowering prices in the existing market.
In contrast to disruptive innovation, a sustaining innovation does not create new markets or value networks but rather only evolves existing ones with better value, allowing the firms within to compete against each other’s sustaining improvements.
There are three lessons we can glean from Google’s disruption and apply to any industry or market. They are:
- Create a new market or ecosystem
Google created a profitable business from search and online advertising, deepening the industry and pioneering a new monetization model for “eyeballs” and “click throughs”.
The lesson here is that while product originality matters, the creation of a monetization model that actually works is what qualifies you as a disruptive innovator.
- Scale up to own the product pipeline
Google’s successful product offerings include but are not limited to:
- Google Drive
- Google Docs
- Google Maps
- Google Now
- Android [acquired in 2005]
Each product interacts with the other and the idea is to own the customer so completely that it would be disruptive (see what we did there…) to go elsewhere. So as you use Gmail, it makes sense to attach heavy files with Google Drive. You also use an Android phone so your Gmail syncs seamlessly.
Apple employs the same methodology with its “i-ecosystem” – you can seamlessly buy music on iTunes and sync with your iPod. You can even buy that iPod with Apple Pay.
While other companies may have their own versions of some of Google’s products, the inventiveness and originality of thought that goes into providing an interrelated pipeline of products which create a market system is the hallmark of a disruptive company.
Take Google Now for instance. Google Now is one of the more ambitious evolutions of Google’s search software. The idea is simple — it predicts what you need to know before you do based on your habits, stored information and search history. It will show you upcoming appointments or tell you when you need to leave to get home on time.
It will give you a preview of your route, with one-button navigation. It will also show upcoming birthdays and anniversaries. Or, it can display weather information for upcoming travel destinations. A bit creepy…yes. And that’s just the beginning. Using its advantage in search and its rich store of consumer data, Google is set to create new markets in data mining and predictive sales.
- Drill down to develop promising new markets
Although Google is known for big bets, it also has incredible depth and coverage in niche areas. For example, the company created an interface for Cherokee speakers (a language of about 20,000 people). In doing so, it is poised to become a preferred service provider in that market.
If Google’s tremendous success over the years is anything to go by, disruptive innovation is definitely the way to go for organisations that wish to make big plays into new markets and industries.