How to Identify Your Enemies Before They Destroy You (HBR OnPoint Enhanced Edition)

This is an enhanced edition of HBR article R0211J, originally published in November 2002. HBR OnPoint articles include the full-text HBR article, plus a synopsis and annotated bibliography. We've all heard the stories about corporate giants who ignored disruptive innovations and paid a steep price. Most of the nascent technologies that typically bombard executives will not amount to competitive threats and deserve to be ignored. As a result, disruptions are usually not taken seriously until they become obvious--when it's often too late. A disruptive innovation is a technology, product, or process that creeps up from below an existing business and threatens to displace it. Gradually, it improves to the point where it displaces the incumbent. But, the authors argue, disruption isn't inevitable. They have developed a tool that can help companies detect potential disruptive innovations while management still has time to respond effectively. The tool's decision-making methodology harnesses the organization's collective wisdom to determine how likely it is that a particular innovation will seriously damage an incumbent's business. The methodology has two components: an analytical instrument and an organizational process. And the tool's rigorous approach can spell the difference between flailing around and acting effectively in the face of a serious competitive threat.