Competing with Disruptive Processes

Published May 2010

The term “disruptive innovations” refers to those inventions that are so radically improved over their predecessors that they soon dominate the market. They meet customer needs that before were either not being met or they satisfy those needs much better than prior products. Examples that touch our lives every day include:

  • The electronic fuel injector made the carburetor obsolete in automobile engines
  • The digital camera changed the way we take photos
  • The compact disc and the iPod revolutionized how we listen to music

These innovations are typically significant improvements to existing products. I remember the first time I used a twin-blade razor; it was immediately obvious that a single blade razor was never going to carve up my face again. Our new vacuum cleaner easily turns on a large ball rather than fixed wheels. It’s simply amazing! In each case, those early to market with the disruptive innovation find prosperity while those replaced have to quickly figure out how to join the club or risk going out of business.

Most of us dream about the light bulb flashing over our head someday and providing that one great idea that will leave the rest of the world lamenting, “Why didn’t I think of that?” While we tend to think of disruptive innovations in terms of unique products (e.g., inventions), it’s important to remember that disruptive innovations can also come in the form of unique processes. In other words, having a significant advantage in how we provide products or services can be just as fruitful as what we provide. Examples include:

  • Dell revolutionized the personal computer industry when it figured out how to build a customized unit to order and deliver it within a couple days
  • Domino’s Pizza became a household name, not because they had the best-tasting pizza but because they could deliver it to customers’ doors quicker than anyone else
  • Wal-Mart became the world’s largest retailer due to their ability to manage their supply chain and the inventory on their store shelves rather than the uniqueness of those products

Closer to home, a couple of Iowa companies have successfully created a niche for themselves because of how they provide their products.

Custom Made Boxes in Des Moines deals in the rather mundane market of corrugated cardboard containers. But owner Mike Wilkinson and his employees excite customers by supplying specialty boxes with no minimum order quantity when their customers need them. That starts with providing quotes to potential customers within two hours of request. It continues through design and production with same-day shipping if required. Mike and his crew don’t try to be the biggest or the cheapest. They’ve built their entire business around the ability to quickly quote, design, produce and ship specialty containers.

Interpower is another example. With plants in Oskaloosa, Lamoni, and Ames, Interpower produces electrical cords. Again, nothing too exciting there. But Interpower effectively competes by agreeing to provide cords in one week with no minimum order size. They’re not set up to be the low-cost supplier; but if someone needs just 50 cords with a special connector, they call Interpower. Or if a company has a shipment of electrical cords from China stuck in customs, Plan B is often a short lead time order to Interpower.

Note that both of these Iowa companies compete not through product innovation but via process. Furthermore, they don’t try to go head-to-head with competitors from low cost countries based on price.

I’ve often used the analogy that I’m willing to compete against Mike Tyson; I just want to be able to choose the activity. Chess or Trivial Pursuit? Game on! Golf? Name the tee time! Boxing? Er, no thanks.

Rather, these companies choose speed, flexibility, and agility as their primary competitive weapons. Many Iowa organizations would do well following their example.

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