The Disruption Spectrum

The mantra of Silicon Valley disruptors evokes a culture where being first to market, taking chances, and pivoting nimbly are the keys to success. These principles are valid in the world of technology, and in particular of software, where A/B testing, bug-fixing updates, and constant evolution are not only possible, but wanted. Early failure, we hear, is an inherent part of the process, it is the best way to get to the top faster, stronger, and better than all the competitors.

But how does this play out in other categories? The further away from the ethereal world of software we move, and the more unforgiving failure becomes. We all know how the physicality of production facility, distribution partnerships, stocks and scales necessary to break even on a mass FMCG innovation all conspire to make true disruption an all-too-rare phenomenon.

A quick search will give you more lists of “The Secrets To Successful Disruption” than you care to read and keep the will to live, and they all repeat the same principles from the nineties and early noughties, namely to spontaneously conjure an idea that will literally go beyond all consumer expectations, being completely free from yet entirely immersed in the realities of your business and to put all our energy behind it without waiting proof of potential.

Part of why disruption has acquired these semi-mythical properties is because of the way innovation has been perceived. Christensen’s 1995 view of innovation as either Sustaining (with minor increments to the product to keep up with evolving needs) or Disruptive (creating entirely new systems of value that shake the foundations of a category) is still gospel to most innovators today. But as with most of binary definitions today, we find that in the vast majority of cases, the truth is somewhere in between – on a spectrum.

Before we go into more detail on how to navigate this world of possibilities, we want to address one pervasive judgment across all industries today, which is that disruptive innovation is inherently superior to its sustaining counterpart. We find that this is just not true in practice. Before even considering the much heightened failure rates of disruption attempts, many of the most successful FMCG innovations of the last few years have been humble line extensions; Magnum Infinity and Lucozade Energy Pink Lemonade were among the 7 products considered “European Breakthrough Innovation Winners” by Nielsen in 2014 (out of 120,000 candidates).

But we must always allow ourselves to dream big; and reducing the risk of failure in a high-risk/high-reward strategy is always one of the best recipes for success. So how do we give ourselves the best chance at disruptive innovation?

It starts with establishing a clear innovation strategy, looking both outwards (to the consumers) and inwards (to your own organisation). Trying to be more disruptive will have a very different cost for each.

Outward innovation has a well-known cost: the more “out there” your innovation, the more you will need to spend in marketing to convince them that your idea is credible, and that your brand is the right one to deliver it. Inward innovations on the other hand can be very demanding in that it needs corporations to re-organise fast and deep, which, as we’ve all felt at some point or other in the last few years, can feel like a lot of blood, sweat and tears for sometimes uncertain benefits.

Let’s start with the most common type of innovation: product innovation. Truly disruptive products need to be pushed every step of the way; from the concept itself, to the rationalization, and importantly to trial: until they have had the full experience, consumers will judge by what they know, and be suspicious of difference. So product disruption means a big communications budget, but also a lot of care and attention from many parts of the marketing team, working together to ensure final consumer buy-in. Failing so resulted in the absolute failure of HP’s iPad competitor, the TouchPad, which had the technology, the PR, the launch and the comms; but failed to find its way into the hands of consumers for demonstrations (something that Apple has built its whole business model on).

Less immediately visible to consumers, but with deeper impact on industries, is process innovation. Keeping up with technological change in supply chain, distribution and retail is a hard enough for large corporations. Adapting and incorporating new tools for better efficiency and service can be enough, but enabling process disruption (or reacting to it at times of change) can mean re-thinking the way the whole company works. The list of retailers that have disappeared for failing to do this has grown too long to quote; from Kodak, who acquired a photosharing site Ofoto in 2010 but used this acquisition to try and push people towards printing digital images instead of pioneering what would have been the first Instagram, to Blockbuster, who failed to adapt its processes to reflect the changing consumer behaviour as people sought quicker and more efficient ways to watch rentals online.

Of much interest lately has been positioning innovation. From value propositions in travel and hospitality, to pushes toward super premiumisation in alcohol or food and drinks, brands have strived to re-invent themselves through sub-brands in response to changes in economic climate and consumer attitudes. As this change is clearly consumer facing, disruptive positioning obviously means a big marketing effort to be credible.

But as we all know, a good positioning runs deep within a company – the belief system it represents must first resonate through the organisation before it can be impactful outside of it. Failure to work internally on the brand and the company’s identity will result in work that falls short no matter how much is spent on communications. McDonald’s launched the Arch Deluxe burger twenty years before the global gourmet burger trend, with the current equivalent of three hundred million dollars, only to pull it after a few months. The positioning of a single product as a sophisticated experience, served by an organisation that still overwhelmingly stood for good, uncomplicated family fun, felt jarring at best, and deceitful at worst. This is something that we have seen in droves in brands rushing to Purpose Marketing without having done the internal work that would work as a sound foundation.Finally, we get to the holy grail of disruption conferences: Paradigm innovation. The challenge to entirely re-think the sector, and invent entirely new categories, business models, channels, and positionings, is more than alluring. Being the first to succeed in this can reap enormous rewards, as any of the 57 companies that became unicorns in 2017 will attest to.

Achieving this kind of results requires relentless energy, and a razor-sharp view of the opportunities, the capabilities, and ambitions at hand. It implies a team that is nimble and independent enough to make bold moves and new connections; but empowered enough to bring these visions to reality in a way that will involve continuous effort for years in terms of both marketing and internal re-structuration. Without both bold independence and empowered creativity, major disruption efforts end up being too humble, or fizzling out before reaching their full potential.

We will finish on a famous innovation anecdote: in 1917, the British army was in possession of all the elements to deploy the Blitzkrieg strategy, 23 years before the Germans actually did it. The British had decent enough tank technology, proof of concept in several battles, associated tactics, and even an enthusiastic champion charged with developing the tank division after WW1 ended. After a few years however the idea was parked, and the budget allocated to more forage for the cavalry instead. The reason? The two great branches of the army, the infantry and the cavalry, were unable to decide how to incorporate the tanks; they just didn’t fit in the existing structures, and no one dared to re-think the Army itself. The German army did just that in 1940, placing the panzer divisions at the center of their strategy, and gaining a decisive advantage that took years of effort for the allies to catch up.

At Butterfly, we like to think that the words that define us best are “Daring Intelligence, and Contagious Creativity”. If you aim at being disruptive, whether it’s in product, process, positioning, or paradigm (or if you’re not sure and would like our opinion), do get in touch. We have the passion and the experience to isolate the best, most disruptive ideas, and the know-how to convince both your consumers and your stakeholders to get on board and follow you to a brighter future.

 

Sidi Lemine

Associate Director

sidi@butterflylondon.com