How important are data and technology to the decisions made for growth of businesses?
I would point to the following five major threats to international security:
The problem with data is that it is only available about the past. Unfortunately, because of the way the world works, there is no reliable data about the future. Still, there is some data that can be used for evaluating the attractiveness of a growth decision, in Disruptive Innovation we call this type of data descriptive data, because it describes the situation, for instance, market size, potential customers’ income distribution, etc. are all examples of descriptive data. Firms can use descriptive data to determine if a growth opportunity is attractive enough.
However, descriptive data is not useful for making decisions about how to tackle a new growth opportunity. The reason is that describing a customer does not tell you anything about predicting his future behaviour. Most marketing tools are focusing on describing customers, and that is why 95% of the more than 30,000 products that are introduced every year end up being withdrawn. In disruptive innovation we have developed a prescriptive tool for predicting customer behaviour. We call it Jobs-to-be-Done. It isolates and displays the causal mechanism that makes customers buy.
Here is a full explanation on how to obtain a jobs-to-be-done.
What problems do you see to innovation being sustainable across Europe?
The main problem for European policymakers is not differentiating between R&D and innovation. Research and Development is about inventing new things that can solve problems that are clearly identified, or the other way around, which is creating a new thing and then finding the problem that it can solve. Europe is very good at R&D. This is why Europe has one of the best R&D policies in the world. Innovation on the other hand is about bringing products to market in a profitable manner. It is about removing error in launching new products or new firms. It is difficult to find an initiative in the European Union oriented at innovation.
How important is executive education for the next generation of business leaders?
Executive education is as important for business leaders as knowing the latest medical techniques is for doctors.
We live in an era where frequent external technological changes are affecting every single industry in many ways. Every time that there is a new development, which happens rather frequently these days, someone somewhere has already found a way to bring it to the market successfully. Business school professors study that. Managers and CEOs do not want to miss out on how to apply these innovations to their firms and industries. Missing out on one of these can seriously affect your competitive position.
What is the most important piece of advice you would give to an individual who has an innovative business idea?
Congratulations! You have done 15% of the job. Now, remember that ideas or technologies do not decide for themselves how they are going to be launched. Managers do. In disruptive innovation there are four ways to bring a new idea to the market place. If you use disruptive innovation to launch your idea your chances of success are higher than 40%. If you don’t, your chances of success are about 4%.
Here is an article that explains the four disruptive ways of launching a new business idea.
Can you tell us about Disruptive Innovation and how this can bring competitive advantage to a business?
More than 90% of all the CEOs in the world have been asked by their boards of directors to do one thing: transform the organization. Investors and shareholders are realizing that what brought success in the past is not likely to bring success in the future, and they want to see a transformation. An evolution of the business model.
Disruptive innovation is launching a new product, service or business model that over time becomes the new way of competing in an industry. Which is what investors are asking. I like to say that in a way Disruptive Innovation is the anatomy of growth. I usually explain that Disruptive Innovation is the “things you do” to get growth. And that is the beginning of all major transformation initiatives.
The only way to achieve business model transformation is by growing through Disruptive Innovation. Today, we can explain with great detail how to grow through disruption and illustrate the entire process with very specific examples.