Disruption vs. incremental changes

We are used to the fact that when new terms appear in the technical glossary, the first thing that happens in the way of many experts, business leaders, etc. is to adopt the new word as a symbol of being in line with the updating that innovation demands of us on a daily basis, but believe me, the precise scope of the new expression is often not known. Such is the case of the difference between disruption and an incremental change or a passing fad.

The first thing to keep in mind is that the impact and evolution of a disruption, whatever the market, will have a much greater consequence than an incremental change. If you want to know in depth the relevance of the challenge that disruption presents us in the current business context, you will undoubtedly have to think about and develop the strategy of any organization or team with regard to disruption.

It sounds simple, but it isn’t: we mean disruptive thinking and planning. Disruption drives structural change in the industry through the use of case studies across a wide range of industries. But also, with the added value that innovation can create the potential for future disruptions, which also makes a difference with those initiatives that are not durable and that fall into the category of incremental changes.

And since the current business effort must focus specifically on the future sustainability of the industry in question, we must identify all those characteristics that protect the longevity of that industry and help defend against interruptions, that is, obstacles and challenges that arise. present on the road.

Therefore, there is an agreement of current doctrine that incremental change refers to efficiency and sustainability improvements in a company’s processes, operations and supply chains, all within the existing business model. In other words, without changes in the structure of the business: how it arises in the present, how its future is planned, etc., without transforming the DNA of that business.

But in the case of disruption, it occurs when business models are fundamentally challenged, changed, and (re) invented. This resistance to move from one model to another occurs when conventional sustainability directors who have not understood the scope of disruptive models, see them act in the market in any type of organization, although their main concern is not to question the business model of that industry or the entire market. They rarely do. But issues that have to do with adjustment and / or corrections that are undertaken but that continue to be done within the guidelines of current processes.

Therefore, the incremental change that leads to the efficiency of sustainability is a necessary but not sufficient condition. And this is so, at least if our goal is to create a truly sustainable economic system, which has a positive net impact on natural resources and our society. On the other hand, we have innovations in the business model through start-ups and conventional companies, the former being the initiators of projects and the latter the usual multipliers of such initiatives in the market. But both initiatives are important for scaling disruptive sustainability initiatives. The first difference between both types of companies is that start-ups are precisely those that start not only from new ideas turned into projects, but are essentially disruptive in almost all the fields in which they operate.

Today’s technological revolution accelerates changes in markets and industries through connectivity, digitization, the Internet, big data, automation, robotics, 3D printing, and artificial intelligence. These changes in turn generate pressure on the economic system to be sustainable, which is why it is becoming increasingly clear that incremental improvements are not sufficient for said goal of sustainability of the system or organizations, which requires a great deal of effort collaboration agreement between organizations, educational institutions, especially business schools and governments.

What working methods and tools can support us?

Traditional corporate sustainability tools and working methods, such as impact and materiality assessment, standard setting, sustainability reporting, and industry benchmarking, are designed to foster incremental change. These are and will be important, but they must be complemented by working methods that foster disruptive change. But for a change to become disruptive, you have to investigate, carry out a lot of effort and work, exploring and implementing new production and business models that do not necessarily know how they will work, because there are many unknowns to be solved and sometimes too high risks to take, especially in the early stages of any business on the market.

That the road to success is a long road of obstacles and challenges, never more appropriate than for disruptive innovation and especially for disruptive thinking, because when we start to tackle it, challenging production and business models, we often do not even know the final objective nor the way of the solution in advance.

Developing ideas is not the most challenging part of disruptive innovation (many ideas already exist); the real challenge is putting the ideas into practice and making them work.

Antonio Alonso, president of the AEEN (Spanish Business School Association) and general secretary of EUPHE (European Union of Private Higher Education)