{"id":16755,"date":"2020-11-29T10:11:01","date_gmt":"2020-11-29T14:11:01","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=16755"},"modified":"2020-11-29T10:11:08","modified_gmt":"2020-11-29T14:11:08","slug":"disruptive-products","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/disruptive-products\/","title":{"rendered":"Disruptive Products: Setting The Stage for Success"},"content":{"rendered":"\n<p>What are disruptive products? How can you ensure that your organization has the capabilities to support developing disruptive products?<\/p>\n\n\n\n<p>A disruptive product is able to change up the market landscape, often pulling customers away from industry staples. Having the <a href=\"https:\/\/www.shortform.com\/blog\/building-a-successful-team\/\">right team<\/a> working on a <a href=\"https:\/\/www.shortform.com\/blog\/disruptive-projects\/\">disruptive project<\/a> is essential.<\/p>\n\n\n\n<p>Read more about how to set up your organization to support developing disruptive products.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">Organizational Structure and Disruptive Products<\/h2>\n\n\n\n<p>When a manager evaluates her company\u2019s capabilities and disabilities in order to take on a new project for a disruptive product, it\u2019s critical that she chooses the right <a href=\"https:\/\/www.shortform.com\/blog\/how-to-organize-a-team\/\">team organization<\/a> to manage it.&nbsp;<\/p>\n\n\n\n<p>These are the most effective organizational structures based on capabilities:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>The values are compatible, but not the processes<\/strong>: If the project is a sustaining technology\u2014meaning it fits the company\u2019s values\u2014but it\u2019s radical enough to require new processes, the project can be executed within the company. However, it needs a heavyweight team, which has the autonomy to create new workflows and patterns of communication that become processes specific to that team. Heavyweight team members must each act as a sort of general manager to make decisions that are in the best interest of the project.&nbsp;<\/li><li><strong>The values and processes are both compatible<\/strong>: Disruptive products can be executed within the company by a functional or lightweight team, which simply has a project manager overseeing the project.&nbsp;<\/li><li><strong>Neither the values nor processes are compatible<\/strong>: If the project is disruptive, it\u2019s incompatible with the company\u2019s values as well as its processes. This kind of project requires a spin-out or acquired entity managed by a heavyweight team.<\/li><li><strong>The processes are compatible, but not the values<\/strong>: If the disruptive products project fits the company\u2019s existing processes, but not its values, because the innovation requires a different cost structure, there are two options: First, the project could be executed within the company, as long as company leaders ensure that the project develops independent budgeting and management processes. Second, the project could be carried out in a spin-out or acquired organization.&nbsp;<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Values and Processes Case Study<\/strong><\/h3>\n\n\n\n<p>Digital Equipment Corporation (DEC) was a major minicomputer maker from the 1960s to the 1980s, but the company failed to adapt when personal computers disrupted the industry.<\/p>\n\n\n\n<p>Let\u2019s look at each of the sources of capabilities and disabilities to see why DEC struggled with disruptive products.&nbsp;<\/p>\n\n\n\n<p>1) Resources: DEC had ample resources\u2014including money, competent engineers, and advanced technology\u2014to transition to the personal computer market.&nbsp;<\/p>\n\n\n\n<p>2) Processes: <strong>DEC\u2019s processes were tailored to the minicomputer market, which became disabilities in the personal computer market. <\/strong>DEC designed and manufactured many custom components for their minicomputers, which they sold directly to customers. As a result of this highly detailed and hands-on process, the company turned out a new product every two to three years.&nbsp;<\/p>\n\n\n\n<p>Personal computers were disruptive products that required very different processes. The market and cost structure demanded that computer makers order components from <a href=\"https:\/\/www.shortform.com\/blog\/bargaining-power-of-suppliers-understanding-michael-porter\/\">suppliers<\/a>, manufacture the computers in high-volume assembly lines, and <a href=\"https:\/\/www.shortform.com\/blog\/how-to-sell-a-product\/\">sell the products<\/a> via retailers. Additionally, companies had to turn around new products once or twice a year.&nbsp;<\/p>\n\n\n\n<p>3) Values: DEC\u2019 valued projects that brought in 50 percent gross margins or higher. Its processes and the nature of the minicomputer market created high overhead costs that required high gross margins. However, <strong>personal computers didn\u2019t fit that cost structure, making DEC\u2019s values a disability.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What are disruptive products? How can you ensure that your organization has the capabilities to support developing disruptive products? A disruptive product is able to change up the market landscape, often pulling customers away from industry staples. Having the right team working on a disruptive project is essential. Read more about how to set up your organization to support developing disruptive products.<\/p>\n","protected":false},"author":6,"featured_media":2624,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,104],"tags":[141],"class_list":["post-16755","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management","category-marketing","tag-the-innovators-dilemma","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Disruptive Products: Setting The Stage for Success - Shortform Books<\/title>\n<meta name=\"description\" content=\"What are disruptive products? These norm-shattering innovations can&#039;t be made without the right team. 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