I’ve been asked to comment on stories like this. Ouya isn’t even a game console as it is an open platform (hackable). That alone makes Ouya stuck in the universe of PC gaming. Just because a computer is dedicated to gaming doesn’t make it any less a computer. (No one would argue the Commodore 64 was a ‘console’ even though no one used it for much more than playing video games).
Disruption is about good management. When in times of crisis, we fall back on our training (no matter what field or job). When a business enters a time of crisis, the manager falls back on his or her training. This business management training has always revolved around sustaining innovations. The business manager immediately responds by directing the company to make a ‘better’ product due to ‘consumer feedback’.
The result is that the business makes a ‘better product’ that only fewer and fewer consumers can use. The business ends up retreating while the disruptor takes over the market.
Previous business books blamed the managers for their business’s failures. Christenson’s innovative disruption became very popular because he did not blame the managers. He blamed the business schools and the training they gave out.
Concerning the Wii, Nintendo used disruption correctly in its right context. The ‘training’ has always been to think that ‘more graphics’ and ‘more power’ equals more success with video game consoles. If Nintendo listened to consumer feedback, unanimously the consumers would want a console that was ‘better’ in the conventional way. Nintendo realized something needed to change as their console sales kept decreasing by making ‘bigger and better’ consoles from the Super Nintendo to the N64 to the Gamecube.
The handheld hardware market shows that ‘bigger and more powerful’ doesn’t equal success. Black and white Gameboy outsold its color based competitors. The DS outsold the PSP.
The Wii was a result of Nintendo re-examining their instincts and training on how to make a video game console. Disruption is about management.
Disruption is not about the product.
“Is this product disruptive?” That is the wrong question. Does the manager think and operate in disruptive ways? Or is the manager ‘tunnel visioning’ and going just the sustaining route.
An example of disruptive innovation could be Microsoft turning the Xbox 360 into a very cheap console combined with a controller with a screen in order to take the wind out of the Wii U’s sales. Christensen, himself, suggested Sony do this with the PS2 (and a motion controller) to stop the Wii juggernaut.
Disruptive innovation flows from business managers, not from ‘products’.
Christensen recently used this example to show just how important management is. Imagine a man who just quit his work because he got a job doing something he LOVES. He leaves the work place all excited and skipping with his steps. He comes home to his wife to tell her the Wonderful News. The wife is aghast. She tells him he is an idiot, makes him feel really bad. While the man may be making less money initially doing what he LOVES, the potential for him to make more money than ever is now possible. But the wife was only thinking in a sustaining type of way. She only has the expectation for the husband’s output to be the same or more. If the wife had better training and thought of the matters differently, than the man’s life wouldn’t have gone from sheer bliss to pure hell upon telling his wife that he quit his job to do what he loves.
The point is that business managers can make their employees’ lives into pure hell (we’ve all had these type of managers) as well as their investors. Since we spend most of our waking life in our work, the importance of creating quality business management would greatly improve life in general as well as business productivity. Remember that Christensen was responsible for Intel making the Celeron processor. How did cheaper computers affect your lives?
As a product concept, the Celeron was introduced in response to Intel’s loss of the low-end market, in particular to the Cyrix 6×86, the AMD K6, and the IDT Winchip. Intel’s existing low-end product, the Pentium MMX, was no longer performance competitive at 233 MHz. Although a faster Pentium MMX would have been a lower-risk strategy, the industry standard Socket 7 platform hosted a market of competitor CPUs which could be drop-in replacements for the Pentium MMX. Instead, Intel pursued a budget part that was pin-compatible with their high-end Pentium II product, using the Pentium II’s Slot 1 interface.
Intel would have made a ‘better’ processor and almost did so. But what intervened was one Clayton Christenson who explained disruption to the CEO. The business management changed. And thus, it changed not only Intel’s fortunes but made computers more accessible (by becoming cheaper).
Now imagiine if better business management was applied throughout the world. The Industrial Revolution would seem like stagnation compared to the cornucorpia unleashed.
Can we stop placing disruption into Schumpeter’s ‘creative destruction’ context? It is much BETTER and MORE REVOLUTIONARY than that.