An Innovator's Dilemma

Once upon a time…

I was in discussions with a company who were doing pretty well for themselves. They had a popular product, a record order book (high 7-figures per month) & sales were up 50%. We were talking about how I could help them design & develop the next generation of their product. You see, their main customer was due to be back in 6–9 months to place their next order. And they wanted to buy the next generation — a new & improved version — not more of what they already had. It just so happened that this product was differentiated by it’s aerodynamic performance and it was also very expensive/time-consuming to physically test. In other words — a prime candidate for development using CFD.

However, despite knowing that their largest customer was on it’s way back, the company were exclusively focussed on meeting their current record demand. But obviously they had a programme of R&D running in the background — didn’t they? In a word…no. Their current product was selling like hot cakes so why bother? The board even said as much during our discussions. The design of the next generation version hadn’t even started.

As it transpired, and why we never worked together, they had no R&D budget. Zip. Zero. So, although sales were stupendous, they had a problem looming over the horizon that more sales wouldn’t fix. Worse, they knew it & had chosen to ignore it. They’ll figure it out, they’re rolling in cash, but it will be interesting to see how it all plays out.

The Innovator’s Dilemma

This prospect was an almost textbook illustration of The Innovator’s Dilemma:

“You’re the market leader, tearing up the financial record books, but you’ve abandoned tomorrow’s innovation to focus on today’s sales.”

Note: If you haven’t read The Innovator’s Dilemma by Clayton Christensen, you can get the general gist in just 4mins from this great sketch note summary video.

Is this you? If so, what do you think your competition is up to? Have they gone quiet? Any parent will tell you, it’s not good when things go quiet. They’ve retreated. They’re innovating. They’re coming for you. They’re focussed on ending your market lead with their next product. They’ve been working on it for the last 18 months & it’s good. It’s really good. They’ve done their homework and they have the marketing to prove it. They’re about to make you look so last season, darling.

Disrupt or Be Disrupted

Every industry is in the midst of some degree of disruption. New faces are joining the game and playing by different rules. Perhaps they’re bringing different technologies into your market? Perhaps they’re using new technologies to make better products or to innovate quicker than you? Perhaps they have a completely different business model with different overheads or a different income stream? Whatever the case, you can’t afford to take your foot off the innovation gas pedal — even if you’re currently raking it in.

If you’re the market leader then it can be tricky to spot that trouble is brewing. After all, everything in the garden is rosy. But if this is you and you’re in one of the innumerable markets for which CFD could be a competitive advantage. Then maybe you could use CFD to help you guard against the attack of the wannabes? Some insightful CFD analysis, coupled with a lean, build-measure-learn design cycle could put you well down the road to your next generation product.

But what if you aren’t the market leader? What if you’re in their wake. Struggling to innovate your way past them? Remember — “what got you here, won’t get you there.” — so let’s team up & go get ’em.