Shipulski On Design

Innovation is difficult. Often, we argue about the definition of the word at the expense of actually doing the work.  There is sustaining innovation and disruptive innovation, and though they share the same last name, they are not related.  In fact, they cannot exist within the same resource allocation rule set.

A sustaining innovation can be delivered within the existing resource allocation rule set, and disruptive innovation cannot. The resource allocation rule set is an umbrella term for the logic you use to run your business.  Your sales team’s compensation model will fit with a sustaining innovation. They’ll sell the heck out of the sustaining innovation because it amplifies their existing compensation system.  They will NOT sell the disruptive innovation because it violates their existing compensation system.  Think high dollar, high margin, sell just a few units versus low dollar, low margin, many units, sell a boatload of units.

A sustaining innovation can be successful with your existing team’s capability, and disruptive innovation cannot.  For example, if your resource allocation logic caused you to develop the world’s best mechanical engineering team to commercialize your world-leading mechanical product, you will be able to execute a sustaining innovation because you have the mechanical engineering skills to pull it off.  A new product that requires a world-class software team is a disruptive innovation because it violates your resource allocation (invest in mechanical engineers) logic.

A sustaining innovation can succeed within your existing customer base because the value proposition fits with THEIR resource allocation logic.  The previous product helped them make progress (and profit) in a specific way that fits with their resource allocation logic.  For example, if the product helped them make their products faster, a sustaining innovation will improve on that value proposition and help them go even faster.  A disruptive innovation will deliver on a whole new value proposition.  For example, where the previous product delivered speed, the disruptive innovation delivers improved portability.  And if the customer has invested in a system that is stationary, the innovation will be disruptive because it will not fit with their resource allocation choices.

Sustaining innovation and disruptive innovation are both good, and I’m not judging one over the other.  The point I want to make is that sustaining innovation and disruptive innovation cannot coexist within the same resource allocation logic space.  Said differently, to succeed, they need to be brought to life in different resource allocation frameworks.

When you’re doing innovation, I think it’s important to know whether it’s sustaining or disruptive.

Image credit – Angela Kanner