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Posted at 08:00 AM ET, 04/18/2013

Tsunamis, big bangs and gigabit city disruption


(cristiana couceiro - Cristiana Couceiro for The washington Post)

Is disruption itself being disrupted?

Paul Nunes, director of research at the Accenture Institute for High Performance, and Larry Downes, a fellow at the institute, co-authored a March piece for the Harvard Business Review in which they introduced “big bang disruption, ” describing it as follows:

“We’re accustomed to seeing mature products wiped out by new technologies and to ever-shorter product life cycles. But now entire product lines—whole markets—are being created or destroyed overnight. Disrupters can come out of nowhere and instantly be everywhere. Once launched, such disruption is hard to fight. We call these game changers “big-bang disrupters.” They don’t create dilemmas for innovators; they trigger disasters.”

Their finding draws on the original research of Harvard Business School Prof. Clayton Christensen, who coined the term “disruptive innovation.” But Downes and Nunes say their observation differs in two ways: “What we’re saying is our observation and our research tell us that the nature of disruption has changed in not only a qualitative way but a quantitative way as well,” said Downes, author of the 2009 book, “The Laws of Disruption,”during an interview Friday.

Today, when new products enter the marketplace, they stand to be cheaper and better simultaneously, say Nunes and Downes. This is made possible through the low-cost development power of crowdsourcing and hackathons, said Nunes, and the deflationary effect technology is having on innovation. “It’s a different way of thinking about human capital.” There are, today, new ways in which people’s ideas are being surfaced and leveraged, such as through crowdsourcing and hackathons.

“Part of what we think is challenging for incumbents,” continued Nunes, “is understanding how to manage different folks. And how to best use and create business advantage through these new opportunities.” For example, incentives are no longer what they used to be. Salaries and other forms of financial compensation are still considered the norm. But they are no longer the only way to incentivize workers. Recognition by the wider technology community, in some cases, is enough to inspire innovation on the part of employees.

The takeaway for companies, said Downes, is this: “If you’re following the old model, ... you’ve waited too long.”

According to Downes and Nunes, heavily regulated industries are particularly ripe for big bang disruption. The go-to example has become Uber — the black-car-on-demand service that has upended the cab companies in cities such as Washington. “When the disruption comes to those regulated industries, it’s even more dramatic,” said Downes. “The last ones to go will be the most regulated, but when they do go it will be a lot of fun to watch.”


( Cristiana Couceiro for The Washington Post )
That makes gigabit Internet speeds and the companies and organizations offering them “the sort of a remarkable example of big bang disruption,” said Downes. That, of course, includes Google, which announced on Wednesday that it plans to bring Google Fiber to Provo, Utah, after announcing the previous week plans to do so in Austin.

“IP-based communications has won. It has won on all possible dimensions. ... The more gigabit cities we get the more big bang disruptions we’re going to see.”

But often the disruption that stands to quickly upend a company or industry is the second wave of invention, say the authors. For example, it wasn’t the digital camera that took down Kodak, they find, but the incorporation of camera technology in phones. It wasn’t the arcade that took down the pinball machine, but the home gaming system. So, before the “big bang,” they agreed, comes the tsunami — where the tide goes out quietly as the first innovation is introduced, and where the second phase of innovation comes as a crushing — and often surprising — wave.

As Downes and Nunes write:

You can’t see big-bang disruption coming. You can’t stop it. You can’t overcome it. Old-style disruption posed the innovator’s dilemma. Big-bang disruption is the innovator’s disaster. And it will be keeping executives in every industry in a cold sweat for a long time to come.

There have been some critiques of Nunes and Downes’s finding. TechDirt’s Mike Masnick has an extensive write-up on the findings. In it, he describes the cover story as “a great piece,” but later writes:

“I really don’t see how this conflicts with or is any different than the innovator’s dilemma. It just shows the same basic thing happening more quickly. The main argument that Downes and Nunes use to argue that this is different doesn’t so much focus on the innovator’s dilemma, but rather focuses on how incumbents should respond to disruptive innovation.”

But he goes on to write that the central point of the piece is sound — that the speed of innovation is increasing and the cost of failure is falling — and that it is “a very interesting theory with some important points that are worth thinking about.”

So, perhaps the traditional definition of disruption is still safe from being disrupted itself — or perhaps Nunes and Downes are the receding water before the tsunami.

The author’s sibling works for Google, but not on Google Fiber.

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By  |  08:00 AM ET, 04/18/2013

 
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