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ARE YOU READY TO An Illustrated Guide to Disruptive Innovation ARE YOU READY TO An Illustrated Guide to Disruptive Innovation Edited by: Ron Dvir Fiona Lettice Pete Thomond With Carol Webb Illustrations by Arye Dvir DISRUPT IT ? ‘ A re You Ready to Disrupt It?’ is a unique knowledge safari into the wilderness of a new type of innovation which has emerged in the business world as well as in the research arena: Disruptive Innovation. T he book is the culmination of a project by The EU Disrupt-IT project consortium, reflecting the collaboration of experts from 6 countries. The consortium was formed in 2002 to develop a methodology and supporting software for enabling and catalysing the creation of new products, services and business models which have the potential to disrupt their markets. T he book conceptually clarifies some of the phenomena related to the realities of disruptive innovation, like: “ Low-end” market vs. New market disruptive innovation Technological vs. Business Model disruptive innovation The challenge of “ Crossing the Chasm ” T he book offers a comprehensive toolkit to foster disruptive innovation: this includes a “Knowledge Safari”, “Idea Pipeline software”, a “Disruptive Portfolio Management Tool”, an “Opportunity Recognition Workshop”, the “DI Compass” and an “Innovation Ecology Portal ”. D etailed descriptions of real case studies complemented by a utopian urban story enrich the concepts and make the complex and intangible ideas come alive. T he lively graphics and illustrations that enrich the insights in the text reflect the consortium’s philosophy that visualisation is an effective method of conveying, and absorbing, new ideas. T he Disrupt-IT project was co-funded by the European Commission Information Society Technology (IST) programme, which is a fertile ground for leading edge Knowledge Management research.

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Introduction Fiona Lettice What does the journey into Disruptive Innovation look like? This chapter tells the story of the fascinating journey which led to the idea and the writing of this book. A. Dvir 2004

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<ul><li>Part ONE </li></ul><ul><li>What is Disruptive Innovation? </li></ul><ul><li>The reader is invited on a short and risk-free knowledge safari. Three questions are explored: </li></ul><ul><li>What is disruptive innovation? </li></ul><ul><li>What are the core principles? </li></ul><ul><li>What does disruptive innovation look like in </li></ul><ul><li>the real world? </li></ul>A. Dvir 2004

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The Principles of Disruptive Innovation Fiona Lettice and Pete Thomond What is disruptive innovation, and why is it so challenging? The increased market, technical and environmental uncertainty surrounding the introduction of disruptive innovations increases the need for companies to extend beyond their traditional view of markets and products - and this requires new approaches to innovation. 1 A. Dvir 2004

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Easy Innovation Palie Smart and Fiona Lettice The easyWay to become a serial Disruptive Innovator This chapter illustrates disruptive innovation in action by describing the successful case of the easyGroup - an organisation that has repeatedly deployed disruptive innovation thinking across different service sectors. Despite its initial success, it is an on-going struggle to bring a disruptive idea to full commercialisation. 2 A. Dvir 2004

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Disruptive Snapshots Pete Thomond and Fiona Lettice Eight examples of Disruptive innovation in action This chapter provides further examples of disruptive innovation case studies. These snapshots should all be familiar stories and as a reader you will probably be able to think of more. They demonstrate different types of disruptive innovation: business model innovation, technological innovation, and some innovations based on a genuine combination of the two. 3

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Part TWO Making Disruptive Innovation Happen How do you make Disruptive Innovation happen, again and again and again? Disruptive Innovation requires a fair amount of serendipity, good brains , sparkling ideas, a s well as a dash of luck. Our basic assumption is that, in addition, good processes, methodologies, systems and the right organisational environment can increase its likelihood. Part TWO is about a toolkit designed to enable, foster and catalyse it.

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The Disrupt-It Way Pete Thomond and Fiona Lettice How do you turn the theory of Disruptive Innovation into a structured methodology? This chapter outlines the Disrupt-It methodology, which is a simple but pragmatic process for capturing and managing ideas, through a series of discrete operations, and bringing them to commercialisation. The complete gated process is explained step by step. 4 A. Dvir 2004

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The Tools for the Job Ron Dvir How do you put the DI methodology into practice? This chapter presents an overview of the six modules included in the Disruptive Innovation Toolkit. Although each can be used as a stand-alone tool, best results are achieved when they are integrated into a complete DI programme. 5 A. Dvir 2004

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Disrupting Strategically Disruptive Portfolio Management Pete Thomond and Fiona Lettice How do you balance incremental, evolutionary and disruptive innovation ? This chapter shows how portfolio management techniques can be adapted to address the challenge of creating and sustaining an innovation strategy, which aims to deliver both sustaining and disruptive innovations. 6 A. Dvir 2004

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Identifying Hidden Opportunities The Opportunity Recognition Workshop Laura Vidal, Fiona Lettice and Pete Thomond Where do you go to look for gold, before the other prospectors turn up? The creativity and idea generation inputs and outputs, which are required for Disruptive Innovation, are different to those needed to deliver incremental or evolutionary innovation. 7 A. Dvir 2004

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Turning Ideas into Value The Idea Pipeline Tomás Garcia and Pete Thom ond How do you expedite the flow of the best ideas into the market, and not into the organisational idea graveyard? The Ideas Pipeline is a gated process to catalyse the lifecycle and flow of ideas, from idea to business plans for the new business concepts, products and services. 8 A. Dvir 2004

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Creating the Climate – Disruptive Innovation Ecology Ron Dvir In what conditions can Disruptive Innovation flourish? Well-defined processes are not sufficient. This chapter is about the “environment”, “climate”, or “organisational ecology” in which disruptive innovation is enabled, or better still, is encouraged and flourishes. 9 A. Dvir 2004

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The Disruptive Innovation Compass The Fast Assessment Tool Matthias Stabe and Patricia Wolf Where is the company heading – and why? Businesses are regularly confronted with the threats and opportunities of disruptive innovation – most of which go unnoticed until it is too late. The DI Compass sensitises organisations to essential stimuli to ensure speedy detection and assessment of such threats and chances through an interactive card game. 10 A. Dvir 2004

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Part THREE Stories from the Disruptive Innovation Campfire Live disruptive innovation is exciting, but what happens back stage? Discover how four organisations have put the Disrupt IT Way into practice and kick-start ed the disruptive innovation process in their own firms. A. Dvir 2004

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Innovation at Ultra-Sonic speed Yinon Friedberg, Edna Pasher, Rennen Sior, and Ron Dvir How can large corporations embed Disruptive Innovation into their culture? Innovation is one of four core values of Israel Aircraft Industry. The implementation of the Disrupt It toolkit at IAI’s LAHAV is part of a company wide effort. A diary captures the different stages in LAHAV`s innovation journey. 11 A. Dvir 2004

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Cooking Up a Storm in Catering Menno Marien and Laura Vidal How can a small company disrupt a traditional service ? The mission of the Competitive Design Network (CDN ) is to help its clients surprise their customers and disrupt their markets. The story of one traditional service which was turned up side down demonstrates how this works. 12 A. Dvir 2004

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When Helmets are not Enough Fred Michel, Antoine Monville and Pete Thomond What would you do in the event of an attack by a low cost Chinese manufacturer? Pactuco is a French plastics mouldings manufacturer. The chapter shows how insurgent Chinese manufacturers have begun to disrupt its core market –forcing it to consider new competitive positions. Pactuco leaders used the DPM tool to identify a disruptive response. 13 A. Dvir 2004

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14 How Vikings Disrupt Intellectual Capital Elisabet Gemzell Mikkelsen, Ann-Sofie Fjällström and Henrik Danckwardt Is Disruptive Innovation relevant to consultancy firms? ICC is a small Swedish company focusing on helping communities leverage their Intellectual Capital. This chapter describes what they discovered about their services portfolio, as a result of an Opportunity Recognition workshop . A. Dvir 2004

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Part FOUR Flying into the Future What’s next in disruptive Innovation ? In part FOUR of the ‘ Are You Ready To Disrupt It? ’ book, we summarise where research and practice in disruptive innovation could take us and propose a vision of the future. A. Dvir 2004

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Fiona Lettice and Patricia Wolf What are the next research frontiers? The research of Disruptive Innovation is at its infancy. It is a complex way to create value; it involves technological, economical, cultural and organisational inter-related challenges. In this chapter we highlight the research areas that need to be further explored. 15 Outlook – Disruptive! A. Dvir 2004

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16 DI-Utopia? Ron Dvir What does Urban Disruptive Innovation mean? It is a story about a city that was in a state of decline just like many other shrinking cities in the world. As a result of its determination to revitalise itself through the application of disruptive innovation to all aspects of urban life, this city has changed its own destiny. Welcome to our vision of the disruptively innovative future: DI-Utopia! Join us as we start our tour… A. Dvir 2004

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A: Contributors B: Product Sheets C: Internet Links D: References E: Publications Disruptive workshop, December 2003, Rubi Appendices And Finally…

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Appendix A: Contributors A great many innovative thoughts and ideas from a great range of inspiring sources have gone into the spirit that has given birth to this book. The book reflects that creative diversity and the synergies that have emerged through the personal journeys and collaborative efforts that have taken place on the road that has led us to ask, ‘Are You Ready To Disrupt It?’ Here we introduce you to the people who have helped to make it possible.

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Appendix B Products Sheets

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Are you Ready to Disrupt-It? A n illustrated guide to Disruptive Innovation Edited by Ron Dvir, Fiona Lettice and Pete Thomond With Carol Webb Illustrations by Arye Dvir ‘ A re You Ready to Disrupt It?’ is a unique knowledge safari into the wilderness of a new type of innovation which has emerged in the business world as well as in the research arena: Disruptive Innovation. T he book is the culmination of a project by The EU Disrupt-IT project consortium, reflecting the collaboration of experts from 6 countries. The consortium was formed in 2002 to develop a methodology and supporting software for enabling and catalysing the creation of new products, services and business models which have the potential to disrupt their markets. T he book conceptually clarifies some of the phenomena related to the realities of disruptive innovation, like: “ Low-end” market vs. New market disruptive innovation Technological vs. Business Model disruptive innovation The challenge of “ Crossing the Chasm ” T he book offers a comprehensive toolkit to foster disruptive innovation: this includes a “Knowledge Safari”, “Idea Pipeline software”, a “Disruptive Portfolio Management Tool”, an “Opportunity Recognition Workshop”, the “DI Compass” and an “Innovation Ecology Portal ”. D etailed descriptions of real case studies complemented by a utopian urban story enrich the concepts and make the complex and intangible ideas come alive. T he lively graphics and illustrations that enrich the insights in the text reflect the consortium’s philosophy that visualisation is an effective method of conveying, and absorbing, new ideas. T he Disrupt-IT project was co-funded by the European Commission Information Society Technology (IST) programme, which is a fertile ground for leading edge Knowledge Management research.