The Formula Below Is Often Used By Project Managers When Being "Disruptive" is a Good Thing

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When Being "Disruptive" is a Good Thing

A disturbing person or thing is often associated with negativity. The sub-prime mortgage crisis disrupted financial and housing markets. That’s bad. My son was interrupting dinner while someone else was talking. That’s bad too.

But I believe that the idea of ​​deliberate disruption can be a very good thing when it is used for the development of strategies, organizations, products, business models and markets. In particular, disruption can be beneficial to those companies trying to serve low-income markets and alleviate poverty, while building a successful business.

Back in early 2005, I read CK Pralahad’s Fortune at the Bottom of the Pyramid and Clayton Christensen’s Innovator’s Solution as I started my new job as General Manager of the Emerging Markets Platforms Group at Intel. Our team is responsible for developing and marketing new PC and mobile products designed to meet the specific needs of those at the bottom of the pyramid. One of these products is the Classmate PC, which has become very popular due to the ongoing battle between it and Nicholas Negroponte’s OLPC XO laptop.

The theories put forward in Prahalad and Christensen’s books, combined with my experience trying to create a viable business with clients making only $1 to $2 a day, is the foundation of my belief that the disruptive approach is the way to go when building businesses. focuses on marketing and improving the lives of the poor.

When I talk about disruption, I’m talking about tactics and techniques that change the game, change the status quo, and ultimately make the biggest impact possible. In this post, I will touch on the following areas where I think disruptive strategies are needed:

  • Product planning
  • Business models
  • Leadership and management

Disruptive Production Plans

Let’s start with the product plan. Clayton Christensen’s theory is that a disruptive innovation or technology is a product that is easy to use, affordable and adds unique value that a market leading product cannot. These products become very successful, often completely displacing an existing product or technology. Think of a PC as a mini computer. The telephone replaces the telegraph. Digital photos are replacing traditional photos. The list goes on. Is the mobile phone replacing the PC? It is not. If it happens, it will be a problem for the PC.

I believe that the product that will displace the PC will come from a company that has developed an easy-to-use, affordable device with a “special” price that benefits those at the bottom of the pyramid. That was my decision after reading Prahalad and Christensen – and it was the way I wanted to set up Intel.

The Classmate PC is not a disruptive innovation. The idea was to create R&D labs in four developing market countries and include various tools based on empirical research conducted in those regions. Unfortunately, due to the worldwide attention on Negroponte’s OLPC and the competitive pressure it puts on Intel (XO uses AMD chips, which competes with Intel), the Classmate PC project has absorbed most of the available resources and therefore I think it is impossible to Intel. it will create that disruptive device, and as such, it is not taking the country by storm (at least not yet).

Is OLPC’s XO a disruptive innovation? Probably not. It has some unique features in the “special value” category but nothing mind-blowingly new or different. The special price is usually direct. The phone allows you to talk vs. telegraph dialing. A transistor radio was portable. The special price is usually the quality of the play. It’s also trying to be more affordable, although any computing device runs into the same quality challenges in component costs and distribution and economics. It is built with an interface that works to improve ease of use, but often these features are skin deep and challenging, as you delve deeper into the software and content.

There’s nothing to stop any device from eventually becoming a disruptive innovation… most innovations are repetitive in comparison.

Disruptive Business Models

In general, the penetration of technological products in emerging markets has not made a significant impact in closing the digital divide, even with higher growth rates than are usually found in mature market countries (the mobile phone is an exception). Others argue that it is the absence of one or more of the product’s “disruptive” features (accessibility, ease of use, price). It is not.

Also, looking at PC accessibility directly, there have been a number of campaigns aimed at bridging the PC divide by introducing very cheap, and sometimes free, computers. None of these efforts have gone on a large scale, at least that I know of. Please point to any successful ones (for example, that have shipped millions of units to at least 5 or more countries on different continents).

I think the bottom line is business model strategy is often given lower priority than product development. The business model required in emerging markets is very different from what works in traditional markets.

Take prices for example. Not the actual price, but how the “price model” works. One of the reasons mobile phones are so successful is that they meet the hallmarks of disruptive change AND have a business model that allows the poorest to afford phone service. In many developing markets the best way to pay is with a prepaid card compared to fees. Safaricom has disrupted the payment model even more – they pay in seconds vs. minutes. Safaricom is the poster child of a company that seems to understand how to create a successful business in Kenya’s BoP. I recently wrote an article on my blog, Disruptive Leadership, that examines Safaricom’s disruptive business processes titled “Safaricom Got It.”

So you can imagine that the same model could work for PC — offer a pay-as-you-go service on PC via subscription or prepaid cards. Microsoft introduced such a service called in 2006 and it has not grown beyond small trials. Protecting the PC and its components from resale (the PC is an open device with many replaceable parts, unlike a mobile phone) and getting banks to provide financing services are two challenges that hinder the project. Bottom line: the business model must be appropriate for a particular device or solution.

Apart from the pricing model, a disruptive strategy may be needed to think about how the company gets the product to the customer (at Intel, we called these channels). Outside of the big cities in many developing countries, especially Africa, there are few or no stores selling PCs. How do you get PCs to a customer when you don’t have a channel?

Another out-of-the-box idea is to sell PCs by mail order. We at Intel intend to do this in Egypt with the cooperation of the government to increase the access of the PC in the areas outside of Cairo and Alexandria, the two largest cities of Egypt. There are few PC shops in small towns and villages, but there is always a post office. We started a project to install PCs in post offices where people can buy a PC directly.

Finally, I would like to stretch the definition of a business model to include how the company is set up and operated. Should the company be set up as a for-profit business with a mission to create success, a high-growth venture that brings returns to its investors (e.g., Intel), or should it be set up as a non-profit that relies on donations and grants to finance its operations even when it sells its own product (e.g., OLPC )? I have made the argument that OLPC would be more successful in achieving its goals if it were a for-profit business, which has been discussed extensively on Due to the number of comments and their intensity, this article was a clear hit. Or maybe I’m wrong…perhaps the most successful “corporate” model is a mix between for-profit and non-profit. This is something I want to explore more in future posts.

Disruptive leadership

I submit that in addition to disruptive innovation and business models, you need “disruptive leadership.” I believe that disruptive leadership captures the essence of what it takes to succeed as a business leader trying to break the secret path to growth in emerging markets.

I did not coin the term “disruptive leadership;” Google it for a while and you’ll find some interesting articles, like this one by Edward Marx where he says:

“If I’m not upsetting the proverbial apple cart, then I’m adding little value. By keeping what’s been done before, I’ll bring in little if any profit. Because of stirring the pot. Disruptive leadership must have a purpose and be supported by a vision.

Another good one by Ted Santos talks about how good leaders create problems:

“What separates extraordinary leaders from managers? One way to tell the difference is to compare the minds of leaders and managers. Managers are great at solving problems. Leaders, on the other hand, show their greatness by creating problems.”

A disruptive leader stirs the pot, thinks outside the box, is willing to challenge the norm, thrives on change and uncertainty, and most importantly, can navigate the turbulent political waters that are inevitably created in response to various disruptive strategies AND. leaders. A disruptive leader creates a company culture that embraces all of these ideas.

These leaders are few and far between. I liked a quote from a recent Economist article about the work of Mr. Ramadorai, CEO of one of India’s largest software outsourcing companies, about how believing that only facing adversity makes companies stronger. “If everything is peaceful, you don’t force yourself,” he said.

“Troubles” has negative connotations, as does the word “disturbing.” But as Mr. Ramadorai says, hardship makes you stronger. I think distraction does too.

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