Introduction to the concepts of Disruptive Innovation and Blue Ocean Strategy

1. DISRUPTIVE INNOVATION

2. ALL THESE MOVIES FOLLOW THE EXACT SAME PLOT

3. FRIENDS = HOW I MET YOUR MOTHER

4. “The Americans have need of the telephone, but we do not.
We have plenty of message boys.”
Sir William Preece, British Post Office, 1878
HISTORY SHOWS WE ARE RESISTANT TO CHANGE

5. “Airplanes are interesting toys but of no military value.”
Marechal Ferdinand Foch, Ecole de Guerre, 1911
HISTORY SHOWS WE ARE RESISTANT TO CHANGE

6. "I think there is a world market for maybe five computers."
Thomas Watson, president of IBM, 1943
HISTORY SHOWS WE ARE RESISTANT TO CHANGE

7. MANY BUSINESSES LOOK EXACTLY THE SAME

8. MANY BUSINESSES LOOK EXACTLY THE SAME

9. MANY BUSINESSES LOOK EXACTLY THE SAME

10. BUT DISRUPTION CERTAINLY DOES HAPPEN

11. AVERAGE LIFESPAN OF COMPANIES
Only 12%
of Fortune 500
companies in 1955
were still on the list in 2014
In 1940, the life expectancy
of a Fortune 500 firm was
75 years. Today, it’s less
than 20 years.

12. Most of us don’t like change… but some of us do
THE DANGER OF DISRUPTION

13. Most of us don’t like change… but some of us do
It only takes one to disrupt an entire industry
THE DANGER OF DISRUPTION

14. TODAY
S1
S2
S3
S4
The Disruptive Innovation Model and Blue Ocean Strategy
How to break away from traditional thinking patterns
How to spot the killer trends coming for your industry
Using the Product to Market Map to identify innovation
opportunities within your existing business model

15. TOMORROW
S5
S6
S7
S8
Customer Journey Mapping
Implementation Session - Who Killed My Business?
Managing people through intense periods of change
Implementation Session - Develop a Disruptive Innovation

16. DISRUPTIVE INNOVATION MODEL

17. SUSTAINING vs DISRUPTIVE INNOVATION
TIME
Customer Needs
PERFORMANCE+PRICE

18. TIME
Customer Needs
Incumbents drive
sustaining innovation
PERFORMANCE+PRICE
SUSTAINING vs DISRUPTIVE INNOVATION

19. TIME
Customer Needs
Sustaining innovation
overshoots customer needs
PERFORMANCE+PRICE
SUSTAINING vs DISRUPTIVE INNOVATION
Incumbents drive
sustaining innovation

20. TIME
Customer Needs
PERFORMANCE+PRICE
Sustaining
Innovation
Disruptive
Innovation
SUSTAINING vs DISRUPTIVE INNOVATION

21. TIME
Customer Needs
PERFORMANCE+PRICE
Sustaining
Innovation
Disruptive
Innovation
Disruptive innovation
takes market share
SUSTAINING vs DISRUPTIVE INNOVATION

22. EXAMPLES OF DISRUPTIVE INNOVATION - AIRBNB

23. EXAMPLES OF DISRUPTIVE INNOVATION - WEWORK

24. EXAMPLES OF DISRUPTIVE INNOVATION - PRINTRBOT

25. APPLICATION ACTIVITY
1. What are the needs of the majority of
customers in your industry?
2. Do providers under or over shoot these
needs in terms of performance?
3. Do providers under or over shoot customer
expectations in terms of price?

26. WHERE IS YOUR INDUSTRY AND YOUR BUSINESS COMPETING ON THIS CURVE?
TIME
Customer Needs
PERFORMANCE+PRICE

27. BLUE OCEAN STRATEGY

28. THE STRATEGY CANVAS
COMPETING FACTORSLOW
HIGH
Industry Value Curve
OFFERINGLEVEL

29. THE STRATEGY CANVAS
COMPETING FACTORSLOW
HIGH
Industry Value Curve
Blue Ocean Value Curve
OFFERINGLEVEL

30. TAXIS vs UBERx
LOW
HIGH
OFFERINGLEVEL
Price
Tim
e
to
w
ait
Hassle
ofpaying
Chance
of
getting
a
taxiPeace
ofm
ind
Quality
of
service
Ease
ofuse
Trust
TAXIS

31. TAXIS vs UBERx
LOW
HIGH
OFFERINGLEVEL
Price
Tim
e
to
w
ait
Hassle
ofpaying
Chance
of
getting
a
taxiPeace
ofm
ind
Quality
of
service
Ease
ofuse
Trust
UBERx
TAXIS

32. VIDEOS GAMES vs Wii
LOW
HIGH
OFFERINGLEVEL
Price
Hires
graphics
Non
gam
ing
functions
Processing
pow
er
Online
gam
ing
Gam
ing
Titles
M
otion
Fam
ily
friendly
gam
es
PS2 /
XBOX

33. LOW
HIGH
OFFERINGLEVEL
Price
Hires
graphics
Non
gam
ing
functions
Processing
pow
er
Online
gam
ing
Gam
ing
Titles
M
otion
Fam
ily
friendly
gam
es
PS2 /
XBOX
NINTENDO
Wii
VIDEOS GAMES vs Wii

34. APPLICATION ACTIVITY
1. What are the 5 to 7 factors on which your industry
competes?
2. Map these factors on the value curve in your workbook
3. Plot the value curve that most businesses in your
industry follow
4. Have a first attempt at drawing what a Blue Ocean
value curve might look like for your industry

35. WHAT IS YOUR INDUSTRY VALUE CURVE?
LOW
HIGH
OFFERINGLEVEL
Factor1
Factor2
Factor3
Factor4
Factor5
Factor6
Factor7

36. WHAT IS A POTENTIAL BLUE OCEAN VALUE CURVE FOR YOUR INDUSTRY?
LOW
HIGH
OFFERINGLEVEL
Factor1
Factor2
Factor3
Factor4
Factor5
Factor6
Factor7

37. The best ideas are
STUPIDideas

38. PETER THIEL - PayPal, Palantir, Zero to One
SEEMS LIKE
A GOOD IDEA
SEEMS LIKE
A BAD IDEA
SWEET SPOT

39. CHARACTERISTICS OF GOOD IDEAS THAT LOOK LIKE BAD IDEAS - CHRIS DIXON
1 Powerful people dismiss them as toys (Telephone, Skype)
2 They unbundle functions done by others (Craigslist, MOOCs)
3 They start off as hobbies (Apple, Bitcoin)
4 They challenge social norms (SnapChat, eBay, UberX)

40. What are the
STUPID
ideas in your
INDUSTRY?

41. KEY TAKEAWAYS
1 Many of us aren’t as good at embracing change as we think
2 That is great news for innovators and disruptors
3 Sustaining Innovation opens the way to Disruptive Innovation
4 The Strategy Canvas shows how your industry currently competes
5 The best ideas are stupid ideas