A good CEO is typically known as an individual that not only has the ability to critically think, but the ability to think integratively. The founder of the Four Seasons hotel, Issy Sharp, created the Four Seasons hotel business model while using integrative thinking. He created a plan where Four Seasons hotels would have 200-350 rooms, great service and charge a price premium to fund its amentities. I think the “Resolution” part of the integrative thinking cascade model stood out to me because the CEO did not choice between the typical hotel models – option A: build a motel chain with low amenities or option B: create a large, pricey hotel chain. Instead, he decline both options and created his own option.
Q: Can you think of any other CEO’s that have used integrative thinking to create success in their companies? If so, explain how.
The Nintendo Switch could be considered both a sustaining and a disruptive innovation to the video game industry. On the one hand, the Switch has revolutionized the console and handheld gaming market by bringing console-quality games to be on the go. Gamer groups across the internet have been debating the merits and innovation of the Switch ever since it released on March 3rd. It has changed the metrics of success from quality of graphics and gameplay to sheer portability. Previously, the main metrics for game success have been gameplay, and, in recent years, graphical quality. Home console systems and desktop PCs have stayed relative in a mobile world by offering superior graphical quality to handheld games. The Nintendo DS and PlayStation Vita had fair graphics for the form factor of the device. The Switch, while somewhat wide for a handheld and small for a TV-connected console, was an instant hit — entire online communities cropped up based on the local stock of the Nintendo Switch in stores and online. By changing the entire game from graphical quality — as the console has home-console-like graphics — to portability. The Switch is wireless and can be taken anywhere for on-the-go play, or hooked into a TV for home gameplay. This “switch” has careened Nintendo into a brand new market for versatile consoles.
Are self-driving cars ripe for a low-end disruption before they even hit the road? In much the same way the open-source, highly compatible and customizable Linux operating system presented a low-end disruption by being “good enough”, will open-source software disrupt a market currently driven by proprietary R&D? George “Geohot” Hotz, the hacker known for disabling security software on the iPhone and Playstation 3 has released the source code for a semi-autonomous driving car system similar to Tesla’s Autopilot after he started receiving questions from the US NHTSA (transportation safety regulatory agency). Another project called “Udacity”, led by the creator of the Y-Combinator startup, is creating open-source challenges to act as an impetus for the development of an open source self-driving car.
Could the extra competition introduced by an open source development community accelerate the development of a self-driving car that will have a cascading effect of low-end disruptions to shipping and transit? Will a lower barrier to entry accelerate competition in the low end and make high end competition less viable for an emerging technology?
The average 10,000 students are creating more than one million records of data and schools are struggling to store and make sense of the data using old legacy systems. A software and interface company, Alma, has launched a cloud based data management tool that will track student records from K-12 education. This new software allows teachers and administrators to differentiate the needs of students and focus on competency-based learning and move away from high-stakes testing. Alma’s cloud based solution has not only proven to be more beneficial to how the students learn but it is also saving schools money. Legacy systems have proven to be more expensive to maintain and internal changes can take lengthy periods of time to implement. The transfer from a local server to a remotely-hosted system has also enhanced the security of the school’s information.
Do you think the benefits out-weigh the initial cost of Alma?
Would you agree or disagree that public schools should be required to improve their information systems?
The Raspberry Pi is now well-known tech enthusiasts where the low cost flexible computer has found endless uses with millions of users. One of the more interesting business uses of the Raspberry Pi has been as a low-cost thin client for PC’s. Thin client management vendor ThinLinx used the technology with Linux and created custom hardware which can be administered and governed within an organization. Thought it lacks fancy features and hardware support, the small and efficient PC has found a low-end market niche. As displayed in the graph, thin models of enterprise machines took time to meet customer requirements and are now commonplace in most offices. A unique aspect of Disruptive Innovation theory is that technological capabilities improve faster than customer requirements. Over time, this low-cost product in a low-end niche market may advance from a hobby to a corporate asset.
- Do you see Raspberry Pi climbing “up-market”, or will the incumbents be able to quell their uprising?
- Can you think of an example where this customizable and low-cost hardware would be a viable option? Or, do you think more time needs to pass before we can judge their growth and future?
Before emerging in the taxi industry, Uber began as a Black Car/Limousine service. They offered a much less expensive and far more convenient service that was viewed as “better” than the current providers. Because every ride has a low marginal cost for Uber, more rides translates into more profit. Their platform created a great deal of opportunities for limo drivers, which in turn translated into direct profit for Uber. In disruptive innovation theory, how a company measures its profitability determines what is up-market, not how consumers perceive the value of the service. This unique movement “up-market” into the taxi industry (which was initially viewed as down-market), helped Uber increase ride volume and utilization of their technology platform. It is argued that Uber did not actually become a taxi company at their inception and that their disruption of the taxi industry came as a reaction after a period, which creates confusion on whether they are disruptive. Though taxi organizations have fought against Uber (and failed), they are still not viewed by some as a disruptive innovation to the taxi industry.
- Do you agree with this point of view about being non-disruptive? If you disagree, which type of disruption is Uber: New Market or Low Cost? Elaborate.
- Uber moved from a perceivably higher class market into the taxi market and were incredibly successful. Can you cite any other organization that made a move like this which was dependent on technology?
Imagine the many working processes running on a car’s computer at any given point in time. Now imagine anyone with $69 and the desire to experiment can read and write to the car’s memory effectively changing it’s software.
Integrative thinking is the practice art of taking all factors into consideration and not accepting an either/or solution in favor of finding a creative way to approach the problem wherein tension is handled effectively. User customized firmware running in the car can certainly lead to creative solutions but is it possible for hobbyists to take a heuristic approach, especially without the proper means of testing?
At the same time, a popular consultant recently stated his firm is handling 2-4 tech startup closures in a week. Should startups take a more integrative approach when attempting to disrupt an industry? For example, Dinner Lab thought pop up restaurants would be a great idea to a single problem but didn’t consider the difficulties of finding qualified chefs with a freelancer’s schedule.
Among the many different ways for disruptive innovation to arise, one avenue to consider in this day and age is through the introduction of carbon laws. With the growing interest in and necessity for sustainability, renewables are becoming more and more popular. Director of the Climate & Energy College at the University of Melbourne, Malte Meinshausen, claims “Regions that make way for future-proof renewable energy and storage investments will turn a zero-emissions future into an economic opportunity.” A shift towards renewables and different sources of energy will undoubtedly bring about a new wave of disruptive innovations.
Can you think of another example of a time that government regulations brought about disruptive innovations? Have we already been introduced to any disruptive innovations surrounding the recent interest in sustainability and renewable energies?
Over the past 50 years of air travel, there has not been much progress and innovation when it comes to the technology surrounding flights. With such dramatic advances in computers and technology over recent years, you would expect planes with faster speeds and other advanced features to be more popular. With the realization that technology is available to bring a new age of flying, start-ups are beginning to figure out how to harness all this technology to bring flights at supersonic speeds at business class prices. If these airline were to succeed, it would disrupt the airline industry with a sustaining innovation. These start-up would bring better products to the established business class market. More advanced airplanes would allow business professionals to more efficiently travel for work by getting them to where they need to be faster and potentially providing a better infrastructure for employees to complete work while on a flight.
Do you think that the failure of traditional airline companies to continually innovate will allow this industry to be taken over by innovative start-ups? What obstacles do you see these start-ups running into?
Our discussions concerning disruptive innovation theory has lead us to many examples of innovations that fit multiple descriptions. However, most disruptions fit one mold better than the others and if not you reach a situation like we discussed with Twitter where the company doesn’t tailor its disruption to fit a successful mold. You can also have a situation where the company trying to sell a disruption gets the question of its own type wrong. The dynamic between fit bits and dedicated smart watches like the Apple Watch illustrates a potential example of this. While we were left debating this, the fit bit can be categorized as a low-end disruption because it consolidates a lot of technologies in one package. It’s a watch, a pedometer, it tells you when you get a text message ect. While you could make a point that the Apple Watch does the exact same thing, the price of that product will prevent it from succeeding as a proper low end disruption. For that reason, you see a lot more people with fit bits than Apple Watches.
Do you see smart watches failing for the above reasoning?
Do you think that disruptions success is at determined by who they fit one of three types we’ve studied? It so, than to what degree does that determine success?