In the previous article, we showed that large groups or “existing players” are not only perfectly capable of taking advantage of disruptive innovation but also fully capable of implementing innovative and disruptive projects, that are in line with their strategic objectives. At Wefound, we support large companies in the launch and development of their disruptive innovation projects. Below are three key principles that should not be underestimated to ensure the success of a disruptive innovation project.
The rupture theory helps to clarify the question of the first-mover advantage. Widely developed in the 1990s, it states that the first entrant into a new market enjoys sustainable competitive advantages over late movers. This theory states that the main competitive advantage is the order of arrival on a market, so it recommends moving as quickly as possible to be the first to enter it.
“Google is a late mover in the search engine market. To make its place in this market, the firm had positioned itself as the first search engine that did not take advertising revenues into account to prioritize its clients’ ranking.”
This theory, however appealing it may be, has rarely been confirmed by evidence. GILETTE entered the disposable shaver market late but has made its mark with undeniable success. APPLE too entered the telephone market late, and whether our youngest readers like it or not, GOOGLE entered the market only later. The company founded by Larry Page made its place in the search engine market long after YAHOO, AOL, or CLUB INTERNET in France. It did so by declaring that it was in a way the only non-advertising-oriented search engine on the market. When the company from Menlo Park arrived as a late mover, it perfectly exploited the Achilles’ heel of the market. Capitalizing on it, it eliminated all other players until it became almost monopolistic. To become, ironically enough, the world’s leading advertising agency. The success of a disruptive model is not dependent only on the order of arrival on a market but more on the compatibility between the opportunity and the company’s business model. This is what Wefound studies during the ideation phase of the project.
A well-managed company measures the performance of its business. In the same way, measuring the progress of a disruptive innovation project is fundamental. Two pitfalls should be avoided. The first pitfall is managing a disruptive innovation project in the same way as a continuous innovation process. It is necessary to set up a specific measurement system for a disruptive innovation project to manage its progress. For example: sometimes, it will be necessary to take the evolution of the acquisition of a certain parameter into account more. In the case of AIRBNB, it is the number of properties for rent, that has been taken as the main metric. In the case of Google, it is the number of searches performed. At Wefound we work with our partners on the implementation of KPIs that are specific to each project. These are generally approved by the innovation committee and the finance department, which makes the project clear and provides a boost to the project’s development.
Wefound accompanies its partners in the implementation of specific KPIs for the disruptive innovation project, approved by the entire management team, which provides clarity and longevity to the project.
The second pitfall is to abandon all attempts at management on the grounds that “innovation cannot be managed”. The tendency in this hypothesis is to let the management of an in-house disruptive innovation project run wild under the pretext that it would asphyxiate the project if it worked under the “rigid” management of the group. In this case, there is the obvious risk of a syndrome well known to innovation specialists: that of the XEROX PARC in Palo Alto. PARC has contributed to some of the world’s greatest innovations in IT (the mouse, the ethernet network, etc.) but the American company has never been able to profit from any of these innovations.
Wefound creates disruptive innovation with its partners, optimizing the chances that this innovation will ultimately benefit them.
Captain Smith, a long-time captain, had never had an accident during his 40-year career. It was precisely for this reason that the White Star had entrusted him with the keys to the Titanic. But forty years without accidents reinforces the feeling that nothing can happen to you, but above all deprives you of the experience that will allow you to react in the event of difficulties, and especially of the ability to anticipate and prevent danger. Paradoxically, recruiting a conservative profile to prevent risk can help increase it. To lead a disruptive project, on the contrary, we will look for a profile that has the potential to identify new issues, someone who has acquired experience in uncertainty. These profiles are relatively difficult to identify for the HR staff of large groups, who are more used to recruiting profiles according to the skills and successful history of the candidates. We are looking to reduce the risk to better face the challenge.
Wefound accompanies its partners in the recruitment of the leader who has the entrepreneurial profile to succeed and accompany the innovation project towards success. This is done by taking into account the factors of permanent uncertainty and the emotional micro-cycles required to undertake a disruptive innovation project.