Disruptive Innovation ART of WAR

8/18/2019 Disruptive Innovation ART of WAR

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Disruptive Innovation

"Sun Tzu The Art of War Wisdom"

What Sun Tzu has to do with a modern Harvard University competitive theory such as the theory

of Disruptive Innovation

Sun Tzu Said:

"Those who strategise use the Tao of Paradox. They attack when the opponent is unprepared

and appear where they least expected"

Unfortunately, most interpretations of this famous statement from Sun Tzu, focuses on the directmeaning related to war

!y delving a "it deeper into its meaning we find that it meant something more profoundespecially when it comes to application in "usiness today

The #ey to this understanding lies in two words$ %unprepared% and %least e&pected%

Sun Tzu's statement encapsulate in one line a very important modern competitive theory

developed "y Harvard University in the last ten years

The theory of "Disruptive Innovation" What you will read in hundreds of modern "oo#s ise&actly what sun Tzu descri"ed in this one short sentence ()** years ago

What is disruptive innovation?

There are two distinct categories in innovations: sustaining and disruptive.

Sustaining innovation, is when the competitive race forces the dominant company to ma#e

"etter products that can "e sold for more money to more attractive customers In such acompetition the incum"ent supplier always wins

Disruptive innovation on the other hand, is when a company new to a mar#et$ leaner and morecost efficient, commercialise a simpler, more convenient product that sells for less money and

appeals to a new or %unattractive% customer The new comer to this mar#et is li#ely in this caseto "eat the incum"ents

This is the phenomenon that so fre+uently defeats successful and large companies It implies, of

course, that the "est way for upstart to attac# esta"lished company is to disrupt them "y attac#ingthem when they are %unprepared% and where they least e&pected to "e attac#ed


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What are they "unprepared" for?

They are unprepared from a cost structure and "usiness model point of view, to ta#e a smaller

margin or to develop a lower +uality and cheaper version of their lucrative product

n the other hand the new entrant is certainly more prepared to do -ust that

For examples

The personal computer and Sony's first "attery.powered transistor poc#et radio were new.mar#et

disruptions Their initial customers were new consumers that had not owned or used the prior

generation of this products and services

/anon's des#top photocopiers were also a new.mar#et disruption, in that they ena"led people to "egin conveniently ma#ing their own photocopies around the corner from their offices, rather

than ta#ing their originals to the corporate high.speed photocopy centre where a technician had

to run the -o" for them

When /anon made photocopying so convenient, people ended up ma#ing a lot more copies andletting go of the large centralised copier concept

In the a"ove e&amples, the esta"lished supplier focused mainly on improving the product at hand

to increasing their margin "y moving up the scale to more lucrative customers They were

%unprepared% to venture into lower margin, lower +uality "usiness and didn't %e&pect% that a%smart% entrant will eventually topple them

There is also the classic case of the 0ini /omputer manufacturers$ 1ot one of them ventured

into the 2/ mar#et, "ecause their cost structure and resources allocation system didn't allowthem to compete

They geared their "usiness model toward sustaina"le innovation "y improving the speed and the

power of the minicomputer while completely ignoring the emerging %lower +uality, less

efficient% "ut cheaper and more convenient 2ersonal /omputers

The rest of course is history, as none of these suppliers e&ist today ie Digital, 2yramid, Se+uentand many more

Disruptive innovation li#e this, start at lower +uality "ut with time and increase sales, +uality

improves and mar#et share increase till eventually they topple the incum"ents all together

3nother type of disruptive innovation is the 4ow.5nd This is what we call a disruption thatta#es root at the low end of the original product

Disruptions such as discount retailing 6ie Wall 0art7, and the 8orean automa#ers entry into the

3merican mar#et have "een pure low.end disruptions in that they did not create new mar#ets or


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product, they were simply low.cost "usiness models that grew "y pic#ing off the least attractive

of the esta"lished firms' customers

Those customers really had enough improved +uality and now needed simpler and cheaper products to do the -o"

3lthough they are different, new.mar#et and low.end disruptive innovation "oth:

"Attack when the incumbents are unprepared and appear where the incumbents least expects

them..."

Sun Tzu would say in such circumstances$

"This must be studied"

The !ine Strategy lementsSun Tzu the Art of War

The 1ine strategy elements highlighted here, are what we must consider and analyse "efore plunging into costly fight or flight actions with people and organisations$ Sun Tzu 5&plained in

the opening of his great treaty The 3rt of War

The whole Sun Tzu 3rt of War strategy can "e summed up in two sentences:

What is your strategi# position?

$o% to Advan#e that position?


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The first five strategy elements deals with one's strategic position and the four remaining strategy

elements are the actions and s#ills re+uired to advance that position

The five strategy elements that ma#e up a Strategi# &osition are:

The Mission

Is what uniting us with all the people in the organisation and the customer that cause them toshare in your goals and o"-ectives ie %putting a man on the moon%

The Climate

Is the timing and the changes that happens around us and provide the opportunities to advance

our position It is the trends that change your situation from moment to moment

The Ground

The 9round is where the contest for such a position ta#es place The ground provides the prizeyou see# to win It defines the game you are playing, and each game with its own uni+ue rules

The Leadership

The 4eadership is the uni+ue +uality of character and leadership that you "ring to your Situation

4eadership is also the realm of decision.ma#ing and personality

The Methods

The 0ethod descri"es the s#ills that you master to wor# with other people They are the realm of

methods and techni+ues !y definition, strategy is itself a system

'ntil %e e(ual or ex#eed our opponent)s s#ore in this five elements* %e do not #hallenge or

+egin our venture or even respond to our opponent.

Advan#ing our position comes from applying specific strategies with the aim of strengthening

the five strategy elements of our position to match or e&ceed that of the opponent Thus securing

our success in the challenge "efore the challenge even "egins

Sun Tzu Strategic system starts with the idea of position, and goes onto ma#e this idea easy to

advance in every aspect of life

The framewor# of a strategic position is framewor# for a machine ou might say that thismachine manufactures luc# We complete this machine "y adding its four moving parts These


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four parts 6strategy elements7 are designed to advance the position and to find and e&ploit

opportunities:

• Information to uncover new opportunities

• Fo#us to aim on the "est possi"le opportunity

• A#tion to ta#e advantage of that opportunity

• &osition to get the rewarded and "egin a new advance

In this section, we will analyse the five strategy elements and how to advance them to win overlife challenges

We will also give e&amples so that strategy as a tool "ecome clearer and ready for your use to

advance your position in life

!efore delving into the five strategy elements and the strategies to advance them in depth, I

would li#e you to consider a ,#ons#ious- thin#ing attitude to understanding and using strategy

Easier said than done

ur instinct when facing challenges in life is almost always a reaction driven "y our ,fight or

flight- response

We either attac# or run away from challenges

The a"ility to control one;s emotions and instinct, while at the same time


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The Five lements of Strategi# &lanning

Sun Tzu the Art of War Strategy

&art /ne

Strategic 2lanning is the pro#ess you follow to form a Strategy

Using Sun Tzu powerful strategic planning system, you will, determine your position and start

creating your own strategy in an enlightened and powerful way

The process is so simple, so simple that people sometimes prefer to ignore it, and instead, spendtoo much money to hire consultants to give them the same planning results$ /;est la ?ie , such is

life

Sun Tzu overall strategic system consists of two ma-or parts:.

• What is strategi# position 1strategi# planning2

• $o% to advan#e that position 1strategy2

ne word of caution: .

• Strategy in itself is not 2lanning


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• 2lanning is usually done in a controlled environment

• Strategy comes later and it deals only with the changes in the field of operation

In this article, we will only deal with strategic planning, or positioning, not the strategy itself

This is +uite another matter

The five elements or steps must "e considered and analysed in any strategic planning processThe analysis is relative to your opponent situation It is a fact that a position on its own is not

strong or wea#, it is only so in relation to your opponent 6competitor7 position

The five elements therefore must "e considered for "oth, you and each opponent in the game you

are playing, in other words, the mar#et you are in

ne ma-or fault of the current strategic analysis prevailing in the mar#et place, called, %SWT%$6Strengths Wea#nesses pportunities Threats7, is the fact that it deals with these four elements in

isolation of the competitor situation

What may "e perceived as wea#ness in an organisation may not "e so in comparison to all the

competitors in this mar#et

Therefore, it is fruitless to do a %SWT% analysis without ta#ing your opponent situation or

position into account

4et;s loo# at the Sun Tzu five elements in details:

@ The 0ission

( The /limate

A The 9round

B The 4eadership

) The 0ethods

9etting these five strategic elements right "efore any e&ecution or venturing into "usiness, is the

"est way to ensure success in any endeavour you choose to underta#e in life

3ontinue...

Strategic 2lanning . 2art ne 4ou Are $ere5

Strategic 2lanning is the process you follow to form a Strategy Using this powerful strategic

http://www.easy-strategy.com/strategic-planning.htmlhttp://www.easy-strategy.com/strategic-planning.html


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planning system, you will, in five easy steps, create your own strategy in one day

Strategic 2lanning . 2art Two

The mission is what unifies or creates unity 6clarity, understanding7 "etween the leader of the

"usiness, the people wor#ing in "usiness, and the customers

Strategic 2lanning . 2art Three

The climate is a"out timing


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&art /ne

Strategic 2lanning is the pro#ess you follow to form a Strategy

Using Sun Tzu powerful strategic planning system, you will, determine your position and start

creating your own strategy in an enlightened and powerful way

The process is so simple, so simple that people sometimes prefer to ignore it, and instead, spend

too much money to hire consultants to give them the same planning results$ /;est la ?ie , such is

life

Sun Tzu overall strategic system consists of two ma-or parts:.

• What is strategi# position 1strategi# planning2

• $o% to advan#e that position 1strategy2

ne word of caution: .

• Strategy in itself is not 2lanning

• 2lanning is usually done in a controlled environment

• Strategy comes later and it deals only with the changes in the field of operation


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In this article, we will only deal with strategic planning, or positioning, not the strategy itself

This is +uite another matter

The five elements or steps must "e considered and analysed in any strategic planning processThe analysis is relative to your opponent situation It is a fact that a position on its own is not

strong or wea#, it is only so in relation to your opponent 6competitor7 position

The five elements therefore must "e considered for "oth, you and each opponent in the game you

are playing, in other words, the mar#et you are in

ne ma-or fault of the current strategic analysis prevailing in the mar#et place, called, %SWT%$6Strengths Wea#nesses pportunities Threats7, is the fact that it deals with these four elements in

isolation of the competitor situation

What may "e perceived as wea#ness in an organisation may not "e so in comparison to all the

competitors in this mar#et

Therefore, it is fruitless to do a %SWT% analysis without ta#ing your opponent situation or

position into account

4et;s loo# at the Sun Tzu five elements in details:

@ The 0ission

( The /limate

A The 9round

B The 4eadership

) The 0ethods

9etting these five strategic elements right "efore any e&ecution or venturing into "usiness, is the

"est way to ensure success in any endeavour you choose to underta#e in life

Disruptive Innovation ART of WAR

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