It is expected that half of the S&P 500 companies will be replaced in the next decade, in fact the average tenure of a company in the S&P 500 is declining.
In 1965 it was 30 years, which dropped to 20 years in 1990 and is expected to drop even further to 10 years by 2030. While this phenomenon is attributed to several root causes, disruptive technologies and innovation is one of the reasons, as it has enabled the successful startups to grow at an unprecedented rate. In addition, accessibility to disruptive technologies and laser targeted advertising at a very low cost, has made it possible to experiment with new ideas cheaply and quickly.
To simplify the meaning of the term disruptive innovative, we define three types of innovations that could be disruptive:
New Product Innovation
We distinguish between two types, “Incremental” and “Potentially Disruptive” product innovation. Most product innovation investment dollars are directed to Incremental innovation which is based on an existing product as the base, than adding improvements including new features and design changes targeting mainly existing market. The Potentially Disruptive product innovation is the kind of It gives birth to new industries and/or replaces existing ones. For example, how the mobile cell phone impacted to the pay phone.
Business Model Innovation
Business Model Innovation allows a whole new breed of startups and SMEs access to a product or service that was historically only accessible to incumbents with deep pockets, strong capabilities or intellectual capital. Once a truly disruptive product or service takes root in simple applications at the bottom of a market it can move relentlessly up market, eventually displacing established incumbents. For example, what the introduction of on-demand economy in the local transportation and hospitality is impacting the traditional taxi and hotel industry.
New Product and Business model Innovation Combined
When both, disruptive product innovation and disruptive business models are combined this could wipe out entire industries along with a large number of incumbents. Examples of this include how technology, digital marketing and e-commerce is impacting the retail industry in the United States, or how the introduction of the iPhone and iTunes impacted the voice communication and mobile phone industry.
EGNYT Team’s multifaceted experience with strategic consulting, design thinking, and technology partners, provides us with a unique three-dimensional perspective into a business and ability to evaluate and identify its best opportunities for success in the marketplace. By providing unbiased guidance and an external perspective, EGNYT can help companies shortcut the trial and error process of sifting through noise and ideas and instead help management focus on the handful of ideas most likely to create value and drive ROI.
It takes both sides of the brain, the right-side creative and left-side analytical to successfully generate and commercialize ideas. But very few people are skilled at both. EGNYT’s helps build a culture of teamwork so that you enables you to tap into both sides of the brains in your organization and foster innovation in new business models and products/services. We have deep experience in assessing innovation performance and identifying solutions to foster ongoing innovation. We employ multiple tools and approaches to EGNYT (“ignite”), capture and catalyze sparks of ingenuity.