As many know, there are a few tent pole books I think about and refer to repeatedly. W. Chan Kim and Renée Mauborgne's Blue Ocean Strategy is one of those books. I would add Beyond Disruption: Innovate and Achieve Growth without Displacing Industries, Companies, or Jobs to my "must-read" list.
Beyond Disruption fits nondisruptive creation into a three-model ecosystem:
Offers breakthrough solutions to an industry's existing problems displacing everything from jobs and companies to regulation and governance as air travel disrupted transatlantic voyages.
Blue Ocean Strategies
BOS redefines an existing industry's problem and then solves the new problem, such as Cirque du Soleil combined theater and the circus to eliminate issues and expenses such as animals, travel, and the cost of headline acts in favor of a hybrid experience where customers willingly pay more and go to Cirque du Soleil venues instead of the other way around (traveling circus).
Square, Inc., renamed to Block, Inc. in December 2021, is a financial services and digital payments company co-founded by Jack Dorsey, also a Twitter co-founder. Square and the "Square Reader" transformed how businesses process transactions, especially for small businesses and individual vendors.
Here's how Square created nondisruptive growth:
Square democratized financial systems access by providing a cost-effective way for small businesses and individual vendors to process card payments. Before Square, these services were often too expensive or complicated for smaller vendors.
Square innovates continuously with new financial products such as Square Capital, which provides loans to businesses, and Cash App, which enables peer-to-peer money transfers.
As commerce increasingly moves online and digital, services like Square become increasingly important. Square allows businesses to efficiently conduct transactions online, in person, and on mobile devices.
Square's Cash App has also played a significant role in financial inclusion, allowing individuals with or without traditional banking services to transfer money, invest, and even buy Bitcoin.
By offering a suite of services tailored for small to medium-sized (SMB) businesses, such as payroll, website creation, marketing, and appointment scheduling, Square empowers small businesses to compete with larger firms.
It's worth noting that Square's influence is subject to the rapidly changing nature of the tech and finance industries. For example, Square created nondisruptive growth by solving a problem - how can SMBs process payments and build trust by accessing previously reserved financial services for bigger companies?
Beyond Disruption points out our cultural obsession with Disruption; for many, Disruption equals growth, but Kim and Mauborgne point out that the Marlboro Man brilliant disruptor is a myth. I second that idea, as there are always talented teams behind even the most iconoclastic creators. We love to over-simplify, to boil complex ideas into overly simplistic notions of right and wrong. As a result, brilliant iconoclastic disruptors such as Zuckerberg, Musk, and Dorsey got engrained in our popular zeitgeist.
Beyond Disruption points out that reality is different from our simplistic fantasies. Teams build great disruptive companies, and Disruption always creates a more brutal row to hoe than nondisruptive growth because those getting disrupted rarely go quietly into the night. Those being disrupted fight back, often creating regulatory, legal, and competitive challenges nondisruptive innovation rarely face.
When Uber disrupts transportation, the value of Taxi medallions plummets, and taxi drivers face a joint or perish decision. Unfortunately, regulators often step in and battle with disruptors to protect the status quo too. Disruptors can win big, but they face an uphill climb once those getting disrupted recognize the threat.
Blue Ocean Strategies face some pushback from those getting disrupted, but since blue oceans combine elements of existing industries in new ways, the "burn them at the stake" mob mentality gets lessened by the "first of its kind" nature of the innovation of the disruption. It's too late when existing players recognize the new hybrid idea as a threat. Ringling Brothers didn't understand Cirque du Soliel was solving crucial problems in their industry until it was time to declare bankruptcy. Blue Oceans are novel and innovative, so don't feel like direct threats to many businesses facing a "join or perish" challenge.
When the Square Reader provided access to food trucks, hairdressers, and an army of SMBs, banking's status quo didn't get threatened because Square/Block created a new market by solving a problem the largest banks didn't even see - cash and checking would be less important than credit card processing in a smartphone-enabled world. With over sixty million customers pushing over $50B using Square/Block, banks may recognize the new market opportunity but offer more time.
Fintech is moving faster than a June bug on a hot tin roof, and that's why Square/Block continues to innovate new access, products, and services. Unfortunately, Wells Fargo et al. didn't see the opportunity, didn't fight Square, and regulators didn't view empowering the small to medium-sized businesses as something needing to get stopped before it got out of hand. Nondisruptive innovation, Beyond Disruption, points out, has been around forever, and isn't as sexy as the brilliant Marlboro Man disruptor. Still, our advice to startups will be to think long and hard about which "disruptive model" will best build their hopes and dreams.
Kim and Mauborgne outline three characteristics for nondisruptive creation:
Science and technology can drive nondisruptive innovation, but they aren't required. They use Music: Not Impossible, a company combining hardware, software, and wearables in a new way so the deaf community can experience music.
Nondisruptive Creation works in any geogrpahy from developed markets and economies to less developed ones. Nondisruptive creations also exist at every level of a nation, country, or state's economy. Beyond Disruption shares how corrective eyeglasses and sanitary napkins were initially for the rich people while microfinance and India's sanitary napkin dispensing machines were target at lower incomes. Nondisruptive creation works for all.
Nondisruptive creation isn't the same as "new-to-the-world" innovation. The same nondisruptive sanitary napkins dispensary that works wonders in rural India could become disruptive in Detroit or Boston.
Examples of nondisruptive creation featured in the book include:
Email your examples of nondisruptive creation to martin (at) WTE.net and I'll add them. Thanks, Martin