Protect Your Company from the Threat of Disruptive Technologies

You've heard how disruptive technologies can upset entire industries and perhaps you're worried that an up-and-coming innovation will throw a wrench into your business model. It's not an unfounded concern,

especially if your business is technology-driven. Just look at how Voice over Internet Protocol (VoIP) shook up the market for traditional telecommunication providers by allowing anyone with an Internet connection to receive a range of voice services at lower costs than those offered by most carriers.

But how worried should you really be, and what can you do to prevent a disruptive technology from putting a crimp in your business?

First off, let's talk about where these technologies come from and just what makes them disruptive. The term "disruptive technology" was coined by Harvard Business School Professor Clayton M. Christensen in his 1997 book The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Christensen used the term to describe a product or service that overtakes the existing dominant technology or product in the market. It does this by filling a need the other technology could not fill, such as providing a new capability or lower price point, or by moving upmarket through performance improvements that eventually overturn the existing technology. (For an fascinating analysis of where the next significant changes are expected to occur, be sure to read Six Next-Gen Disruptive Technologies.)