The document discusses disruptive technologies and innovation. It defines disruptive innovation according to Clayton Christensen as describing how new products, markets, and margins can emerge. However, the theory does not fully explain what makes technologies truly disruptive. The document then examines what disruptors do by following anomalies and experimenting in new ways not bound by industry rules. Over time, if more people start using the innovation, its potential is discovered and the world changes irreversibly. However, incumbents often react too late to disruption that unfolds in front of them due to issues with visibility, control of information rather than assets, risk adversity, focusing on incremental changes, and being slow to change.

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DISRUPTIVE TECHNOLOGIES
Associate Professor Kai Riemer
Chair of Business Information Systems
The University of Sydney Business School
Disclosing New Worlds

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Since 2000 52% of Fortune 500 companies have disappeared

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What makes new technology disruptive?

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Disruptive Innovation according to Clayton Christensen
A story about:
- Products
- Markets
- Margins
The theory doesn’t explain what makes technologies truly disruptive
The “innovator’s dilemma”
is that “doing the right thing
is the wrong thing.”

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Disruptive change is path-breaking change

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Change and innovation are incremental:
problem solving, making the product better, making production cheaper,
à typically what business schools teach
How do industries normally evolve?

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– What do disruptors (entrepreneurs) do?
– Follow an anomaly, ‘a hunch’, dabble with technology, experiment
– New product/service is not bound by the established rules of the industry.
– Does not make sense against current understanding of the industry
The emergence of Disruptive Innovation

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– More and more people start using the
innovation
– Its potentials are discovered in use
– The world changes irreversibly,
the industry changes its trajectory
Disruptive Innovation discloses a new world

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74% of incumbents react to disruption only 2 yrs after its occurrence – or later
(data: Capgemini)

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Another Example – in 2007:
"The simple truth: convergence is a compromise
driven by financial limitations, not aspiration. In the
markets where multiple devices are affordable, the
vast majority would prefer that to one device fits all."
http://www.theguardian.com/media/2007/jun/29/digitalmedia.news
Path-breaking change cannot be extrapolated...

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Why do we have such a hard time
dealing with disruption, even when it
unfolds right in front of us?

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Visibility
Disruption happens gradually, but feels sudden.

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Information
Digital disruptors control information, not physical assets

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Risk
Risk adversity becomes the greatest risk.

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Risk
“Drop your Tools” (Karl Weick) – 1) Self-cannabalise, 2) Rethink incentive
structures and 3) budgeting / management processes

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Utility
Fundamentally different, not just better.

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Speed
As a consequence, incumbents are often late. And slow…

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V
I R U
S
Visibility
Information Risk
Utility
Speed
kai.riemer@sydney.edu.au | @karisyd
http://byresearch.wordpress.com
Sources of picture materials available from the speaker upon request.

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DISRUPT.SYDNEY
www.disruptsydney.com
Australia’s first disruption conference
23 September 2016
University of Sydney CBD campus