Renowned global strategy experts dispel myth that innovation must be disruptive and offer alternative path to growth in new MIT Sloan Management Review article

W. Chan Kim and Renée Mauborgne, preeminent management strategists and best-selling authors of Blue Ocean Strategy and Blue Ocean Shift, explain how companies can innovate and expand markets without destroying existing businesses and industries.

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MIT Sloan Management Review

Feb 21, 2019, 09:20 ET

CAMBRIDGE, Mass., Feb. 21, 2019 /PRNewswire/ -- In recent years, disruption has become the battle cry of business, and disruption has become synonymous with innovation. Corporate leaders are continually warned that the only way to survive, succeed, and grow is to disrupt their industries or even their own companies. Yet, too often disruption imposes a painful trade-off: Shuttered companies, lost jobs, and hurt communities are inherent by-products, as market creation and market destruction are inextricably linked.

In a groundbreaking new article "Nondisruptive Creation: Rethinking Innovation and Growth," released today by MIT Sloan Management Review (MIT SMR), W. Chan Kim and Renée Mauborgne argue that there's another path to growth — one that breaks the painful, zero-sum trade-off of disruption and offers a positive-sum approach to innovation: nondisruptive creation.

Kim and Mauborgne are world-renowned professors of strategy at INSEAD and global best-selling authors of the landmark books Blue Ocean Strategy and Blue Ocean Shift. In this article, they apply their trademark strategic vision to upend popular thinking about innovation, market creation, and disruption. Drawing on three decades of research, the authors conclude that companies not only can but should take a much broader view of innovation and growth — and look for ways to create brand-new markets and businesses, rather than just disrupting or destroying those that already exist.

"Whether in advanced nations or in developing countries, history has shown nondisruptive creation to be as central to innovation and growth as disruption has been," the authors write, pointing to innovations such as Viagra, online dating, microfinance, life coaching, Post-it Notes, health clubs, and environmental consulting as prime examples of innovations that have created all-new markets. "Despite all this, our recognition of the significance of nondisruptive creation is little more than nascent."

To deepen our understanding of this phenomenon, Kim and Mauborgne define nondisruptive creation; outline its distinctive advantages for established companies, startups, and society; offer a framework to help leaders charged with driving innovation achieve the kind of growth that best suits their companies; and spotlight which strategies trigger nondisruptive creation and which lead to disruption.

Among the benefits of a nondisruptive approach for established companies and startups alike are:

Making execution emotionally and politically easier: Nondisruptive creation opens a less threatening path to innovation for established companies. It doesn't directly challenge existing businesses or the people who make their livelihoods in them.
Offering a good counterresponse to disruption. Nondisruptive creation can be an effective way to respond to industry disruptors. By creating new markets, companies can preempt obsolescence and unlock value.
Avoiding Goliath. Nondisruptive creation gives smaller companies an alternative to squaring off with entrenched market leaders with far greater financial and marketing resources.
Reducing conflicts with social interest groups and government agencies. When the social costs incurred by disruption become too great, social interest groups and government agencies often lobby against, rein in, or tax the disruptor. Nondisruptive creation imposes minimal adjustment costs on society and allows companies to largely avoid these negative issues.

Kim and Mauborgne also identify what makes leaders effective at recognizing brand-new problems to solve or brand-new opportunities to seize. Fundamentally, these leaders follow three steps to spot potential for nondisruptive creation:

First: They tend to think deeply about burning but overlooked issues in the world, their industry, or their vocation that they truly care about and that people or organizations are struggling with.
Second: They understand which organizations or industries would typically address the problem or opportunity and figure out why they have overlooked it.
Third: They look for new technologies, platforms, and/or methods that allow them to solve the problem or seize the opportunity in a high-value, low-cost way.

"The moment for a broader view of innovation has arrived," the authors conclude. "We need a model that recognizes and embraces both disruptive and nondisruptive creation, since they are complementary engines of growth. Focusing on only one leads to a biased view of what's possible and limits a company's potential to create the markets of tomorrow."

To read the full article, please visit: "Nondisruptive Creation: Rethinking Innovation and Growth."

About W. Chan Kim and Renée Mauborgne:
W. Chan Kim and Renée Mauborgne (@blueoceanstrtgy) are professors of strategy at INSEAD and codirectors of the INSEAD Blue Ocean Strategy Institute. They are the authors of best-sellers Blue Ocean Shift: Beyond Competing (Hachette Books, 2017) and Blue Ocean Strategy, expanded edition (Harvard Business Review Press, 2015). To learn more, see www.blueoceanshift.com.

About MIT Sloan Management Review
A media company based at the MIT Sloan School of Management, MIT Sloan Management Review's mission is to lead the conversation among research scholars, business executives, and other thought leaders about advances in management practice, especially those shaped by technology, that are transforming how people lead and innovate. MIT Sloan Management Review captures for thoughtful managers the creativity, excitement, and opportunity generated by rapid organizational, technological, and societal change.