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Disruption: Why We Need to Advance the Discussion from "Is-it-or-Isn't-It Classification" to "How to"

Paul Paetz

Consumer electronics is one of the most obvious areas of our economy that depends on continuous innovation, whether breakthrough, incremental, game-changing or simply resulting in products that are more convenient and easier to use. Within the discipline of innovation is the subset we call disruptive innovation, and though it represents a tiny fraction – probably less than a percent of all innovation –  it is the area that attracts the most attention from investors and innovators, and especially by the media. That's because disruption changes the basis of competition, enabling under-resourced, under-funded, unknown tiny companies, or established companies that you didn't even think were in your business to come from nowhere, quickly winning a market beachhead and then ascend to market leadership, often in a matter of just a few short years.]

Disruptive innovation is critically important because it can be easily demonstrated that almost all real economic growth is derived from disruption, so it's easy to understand why everyone wants a piece of it. The problem is, we've spent nearly 20 years arguing about what is and isn't disruptive, getting it wrong most of the time. Partly, this is because the word "disruptive" has a very strong common meaning, so many assume they know what "disruptive innovation" is without actually looking at how the theory works and the patterns it describes. Others just think it's a cool word, and deliberately misinterpret it to fit their purposes.

What we really need to do is think about disruption differently. Let the historians and academics classify it. Stop using it as a buzzword and start using it as driver of strategy. If we focus on how to make disruption happen by design and to applying the theory to increase the probability of disruptive success, then we'll be making a far bigger contribution to economic growth, our own bottom lines and especially to consumer well-being.

In consumer electronics, we see wearables, 3d printing, and the so-called "internet of things," as well as the old standbys of audio, video and telecom products, all of which offer exciting opportunities to change the world but none of which are inherently disruptive. How these technologies and products are applied, positioned in the market, priced and designed will determine which ones disrupt markets and create new industries and which ones become tomorrow's unfulfilled promises.

What products can you think of that were prematurely labeled disruptive, and can you tell which companies are executing the right strategies to ensure they disrupt?

Paul Paetz is the author of Disruption by Design: How to Create Products That Disrupt and Then Dominate Markets. He is featured at Gary's Book Club at the 2015 International CES. Be sure to see him speak in person.