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Big Bang Disruption: Strategy in the Age of Devastating Innovation.

Big Bang Disruption: Strategy in the Age of Devastating Innovation

Larry Downes and Paul Nunes (New York: Penguin-Portfolio, 2014)

Big Bang Disruption should be required reading for anyone attempting to launch a business or stay in business in the face of digitally enabled competition, with its exponential growth curves. Big bang disruption results from the introduction of new products that are simultaneously better and less expensive than existing solutions. These innovations may be based on technology, but the real key to their power is the speed of information. Consumers, armed with ubiquitous computing networks, mobile devices, and pervasive social connections, identify these breakthroughs as soon as they launch, and flock to them--leaving competitors flat-footed.

Downes and Nunes explain what drives big bang disruption and offer 12 rules that will enable companies to spot coming disruptions and launch their own disruptive initiatives. Most of the book's examples are taken from the consumer electronics, computing and communications products, and services industries--sectors that are dominated by exponential technologies. Yet, the authors argue that even regulated industries are at risk for disruption, at least at their margins; think, for example, of smart energy solutions.

It should be no surprise that some successful companies (most, if you believe the authors) fail to introduce new products or services that capture the market. Successful incumbents, applying strategic logic that has created value for them in the past, miss the new dynamics of competition. In the process, they fall victim to what Downes and Nunes call "the strange anatomy of Big Bang Disruption." In this new market anatomy, a shark fin-shaped adoption curve has replaced Everett Rogers's classic bell-shaped adoption curve, which described traditional market growth. "The shark fin encapsulates the shift from strategic business change driven by incremental technology improvements to Big Bang Disruptions that are powered by exponential technologies," argue Downes and Nunes. Exponential technologies are those--like mobile devices, cloud computing, the Internet, and other information technologies--that have followed Moore's Law, improving in performance at an exponential pace, doubling every two years or less. These constantly improving technologies can quickly dismantle a market; witness the way global positioning systems and mobile apps have replaced paper maps and even GPS navigation systems in a matter of years. Such exponential technologies have produced the declining cost of innovation, the declining cost of information, and the declining cost of experimentation--all of which result in a shortened and skewed industry life cycle. They ensure that the future will not be for anyone but the fleetest of foot.

In Downes and Nunes's model, big bang disruption occurs in four stages:

1. The Singularity. Traditional market incumbents and their supply chains are challenged by entrepreneurs leveraging disruptive technologies. These disruptors often appear as failed experiments in the market and are frequently launched by innovators outside of the industry. They are the first signal that a major change is on or just over the horizon.

2. The Big Bang. When early experimenters yield "just the right combination of technology and business model," they quickly appeal to the market, where customers share their experiences, and attract others to a promising innovation, via social media, creating explosive growth. The old industry implodes.

3. The Big Crunch. Once the market is saturated, the disruptor enters its own mature state and innovation is more incremental. The value created during the big bang phase dwindles and former disruptors need to redeploy their assets--or lose their value and fall victim to disruption in the next cycle.

4. Entropy. Disruptors that ignore the big crunch find themselves in this last, dying stage. To salvage value, remaining assets need to be smashed together in experiments to launch new disruptors. Companies that remain in entropy often become their own most dangerous competitor; they must either cannibalize themselves to ignite their next cycle of explosive disruption, or slowly wither.

Big bang disruptors inject undisciplined strategy, unconstrained growth, and unencumbered development into the market, none of which senior leadership in traditional companies is prepared for. Big bang disruptors will force companies to reinvent their competitive intelligence practices, revamp their collaboration and supply-chain approaches, and reinvigorate their experimental practices in the marketplace. In short, the marketplace will demand that companies reinvent themselves quickly and frequently.

I like a well-written book, and this one certainly is. The authors use compelling examples of companies trying, both successfully and unsuccessfully, to compete in the age of exponential technologies. The authors turn a good phrase, too; there are three I'm sure will be widely quoted:

* "In a growing number of markets, the return on combine is now higher than the return on design." Traditional design practices that emphasize starting from scratch will be less effective than recombining existing technology to create new solutions.

* "Thanks to the sudden adoption of Big Bang Disruptors, time to market now regularly exceeds time in market." With the rapid expansion of markets followed by the big crunch, products and services may take longer to create than they take to complete an explosive growth cycle and be replaced by yet another disruptor.

* "Missing the moment means missing the market." Finding the right combination of technologies at the right time will be more of an art than a science; those seeking to launch big bang disruptions will have to judge when the consumer is ready to jump to the next disruptor and launch before someone else offers a more compelling solution.

I work with the two groups who need this book most, but I'm not sure either of them knows it. On the one hand, fledgling entrepreneurs in my digital innovation and design course (and elsewhere) could learn a lot about experimentation and strategy from this book, but they don't quite speak the language of strategy. Thus, the power of Downes and Nunes's ideas might be lost on them. On the other hand, successful incumbent companies really need this book as a blueprint for how to change their thinking, but they don't fully understand that their thinking is outdated. In addition, while the examples are compelling and detailed, executing the rules for exploiting big bang disruption will require a level of savvy that few possess.

Irene Petrick, PhD

The Pennsylvania State University
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Comment:Big Bang Disruption: Strategy in the Age of Devastating Innovation.
Author:Petrick, Irene
Publication:Research-Technology Management
Geographic Code:1USA
Date:May 1, 2014
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