Category Archives: Disruptive innovation

The Disruptive Innovation Machine

Identify, Differentiate & Interact with… Everything

Look out your window. Thanks to four disruptive forces, everything you see has the potential to be a business opportunity, if you keep three words in mind: Identify, Differentiate, and Interact.

The Disruptive Innovation machine lists these four disruptive forces around the edges (not coincidentally where disruption happens first) and has three empty boxes for you to add a phrase to correspond with each essential word.

That is, what can disruptive innovation help your customers IDENTIFY? How can it help them DIFFERENTIATE this person… place… thing… idea… event from all else? What options can it offer them to INTERACT with it?

Let’s walk through an example of how you might use the Machine.

You could start by thinking of a specific segment of customers. For this example, let’s imagine you run a busy doctor’s office and the segment you are targeting is busy tech-savvy patients.

The Machine will help you figure out how your office could leverage wireless devices and one or all of the disruptive forces that are starting to rip apart existing business models. These forces (Digital Sensors, etc.) are shown at the outer edges of the Machine.

Write a noun in the first box, which stands for Identify. You are trying to combine three words to describe an innovative new service you could provide to your patients. Let’s use “DIET.” This means your service will be identifying proper diets for patients.

Now, we need an adjective for the Differentiate box, which means on what basis will you be helping patients differentiate between diet options? We could write easiest or cheapest, but for now we will write “HEALTHIEST”.

Finally, we need a verb for the Interact space, which represents how patients will access the results. You could write demonstrate (for video demonstrations by a nurse). Let’s stick with “DEMONSTRATE”.

As you use this tool, try various combinations, and try to include the disruptive forces in your answers. For example, a doctor’s office could list different ways to use Digital Sensors (noun, in the Identify box) to better serve patients. It could encourage certain patients to wear a wristband or other device that monitors the patient’s health and reports any anomalies to the healthcare provider.

Likewise, the physician could leverage Pervasive Memory to utilize patient’s sensors data over a period of months and years. This doesn’t have to involve more work for the doctor; numerous apps are flooding the market that accomplish such feats. The trick is mostly for healthcare providers to recognize these disruptive forces and incorporate the best of them into interactions with patients.

The Digital Innovation Machine can produce countless possible innovations, and many of them will generate millions or billions in profits over the next few years. At first glance, you might underestimate the power of this tool. We’d be happy to discuss it, if you like. This sort of thinking is also described in detail in our book.

Disruptive innovation

Is Your Firm Ready for Simultaneous Change?


Outsmart your competitors. Buy the book


One of the biggest challenges in looking forward two, five, or more years into the future is that everything changes at the same time, not just the elements on which you are presently focused. Social media experts think social media will change everything. App developers think apps will change everything. But in reality, everything is changing at once.

Here’s the safest prediction we can make: Everything will get smarter.

How you react depends on your industry and your company. If you wish to compete on price and sell low-quality commodity products, then you can safely ignore much of what we have written in Smart Customers, Stupid Companies. If you wish to maintain your margins and be a market leader, you will need to act smart, to leverage sensors, to support the emerging Physical Web, and to develop a strategy for interacting with customers while they simultaneously interact with everyone else.

You will need to replace your dumb touchpoints with smart ones. You will need to become obsessed with saving your customers time, money, and effort. You will need to provide customized services. You will need to do all these things, most likely in a radically different way.

Most importantly, you will need to focus with laser-like intensity on the intersection of initiatives that benefit your customers and benefit your firm.

[Adapted from the book Smart Customers, Stupid Companies by Michael Hinshaw and Bruce Kasanoff, available now on Amazon.]

Disruptive innovation Modularize Products and Services Pervasive Memory

7 Ways to Tell If Your Company Is Stupid


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For our new book, Smart Customers, Stupid Companies, we spent eighteen months studying the growing chasm between smart customers and stupid companies. The former are increasingly empowered by wireless technologies, computers and sensors that are, well, everywhere. The latter mistakenly think they can get away with the same old sullen and slow approach.

Truth is, our whole economy is changing radically because of disruptive forces like digital sensors and the spread of the Web from computer screens to the physical world.

Here are seven tip-offs that your company is acting stupidly:

1.) Two employees in a row ask the same customer for his or her account number. Any company that can’t figure out how to pass an account number from one representative to another won’t be able to deliver innovative service.

2.) Your company can’t record or remember what a customer says. Customers tell us how often they get the sense that the customer service rep or sales clerk is only listening to them with one ear. They notice that she has no way to record or share your comments. Why would a customer waste their breath talking to a firm that’s too stupid to remember what they say?

3.) Your company spends more money selling than serving. Do you spend more money on advertising than service innovation? In today’s era of radically higher customer expectations, that’s stupid.

4.) Your products come with instructions longer than a postcard. Sufficiently advanced technology is indistinguishable from magic, said science fiction writer Arthur C. Clarke. A toddler can figure out how to use an iPad, because doing so is intuitive. A product that needs lengthy instructions isn’t worth money.

5.) Your company closes, ever. We are not talking about a cute little standalone gift shop. But if a 5,000-person company can’t figure out how to help a customer solve a problem at 2 a.m., you don’t understand that 24/7 wireless access means “always open.”

6.) You hunt customers like prey. Pretty soon, companies will be able to track customers everywhere, even inside their own homes. With great power comes great responsibility; a smart firm remembers information for customers, not about them.

7.) Your team doesn’t even know how to spell “personalization,” never mind practice it. Smart companies have figured out how to deliver personal service for the same price as mass-produced products. By the way, personalization is the reason you won’t give your wife your cell phone when she loses hers.

[Adapted from the book Smart Customers, Stupid Companies by Michael Hinshaw and Bruce Kasanoff, available now on Amazon.]

Anticipate Customer Needs Disruptive innovation

Don’t Close, Unless You Want to Close Forever


Outsmart your competitors. Buy the book


There are still many businesses where customer service and support is provided only during certain hours: if you call after, say, 7 p.m. Pacific Time, technical support is closed. Seriously? Does the firm really expect that none of their products are installed or used after 7 p.m.?

“CHANGE IS THE LAW OF LIFE. AND THOSE WHO LOOK ONLY TO THE PAST OR PRESENT ARE CERTAIN TO MISS THE FUTURE.”
— PRESIDENT JOHN F. KENNEDY

These sort of time-based restrictions are going to disappear for companies that successfully embrace the changed notion of customer service and customer experience.

Not because it suddenly becomes profitable to stay open 24/7. But because when you compete with firms like Zappos, which operates their warehouse 24/7 even though it’s not the most efficient way to do so, the notion of being “closed” will become suicidal from a competitive perspective.

Competitors like Zappos recognize that the value of delighting customers who order after midnight with a shipment that shows up on their doorsteps literally hours after being ordered can’t be measured by “maximized picking efficiency.”

They’re measuring the value of providing “a wow experience, which (their) customers remember for a very long time and tell their friends and family about.

[Adapted from the book Smart Customers, Stupid Companies by Michael Hinshaw and Bruce Kasanoff, available now on Amazon.]

Disruptive innovation

7 Ways to Disrupt Your Industry

Thousands of readers have shared our book excerpt at FastCompany, 7 Ways to Disrupt Your Industry. So we decided to make life easy for you and create this handy wallet card.

Can a wallet card really be disruptive, you ask? Good question.

Anything that keeps you focused on building services for smart customers is disruptive. If it helps to have something to pull out and look at a few dozen times a week, so be it.

If you really want to build something big and profitable, we explain ten – count ‘em , ten – disruptive ideas in Smart Customers, Stupid Companies.