, , , ,

The topic of disruptive innovation came into play during strategy discussions the other day … as did the anecdote about the frog and the boiling pot of water.  I thoroughly enjoy this conversation, and as product management leaders we all need to understand the implications to our day-to-day lives.

The premise is simple … we get too comfortable with our surroundings to notice the impending dangers lurking behind the scenes; the threats that occur gradually such that we don’t (or can’t) react.

More than likely, you’ve heard the anecdote … if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death. But how many of us have taken the time to consider how this might apply in our product management roles?

Once you become an established player in your respective space, the comfort factor alludes to focusing on either your most demanding customers and/or profitability. How can I better serve by best paying customers?  How can I leverage what I’ve done to attract similar large customers? This is not a critique or criticism, it is just fact and the way most companies go about growing business. But there is a danger.

Check out the video on this Harvard Business Review article, which puts it this way …

As incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others.

Enter the boiling water.  By perhaps focusing to heavily on the high-end market (because that is where the most profitable customers are), we exceed the needs of the low-end market opening the door for the niche players who can move much faster. Over time as we’ve ignored the water heating, it’s not just one or two customers the niche player has attracted … they now have a thriving business that is a legitimate threat.

Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality—frequently at a lower price.

Not all fires are worth reacting to.  Some begin strong but don’t have the staying power and soon fizzle out.  Some just aren’t big enough to realistically make a longer term impact (picture a candle being held to the pot).  Some, on the other hand, can have drastic impacts on the environment around us.

But the point is, you won’t know if you aren’t paying attention and constantly checking the temperature.  The video comments the only way for industry leaders is to fight back is by launching their own disruptive innovations, but to do this you will need to:

  • Make sure you understand the health of your business and it’s current trajectory.
  • Make sure you understand the market & competitive forces and how they might be changing.
  • Make sure you understand where you are going, and more importantly how the answers to the first two points impact how you will get there.