I have noticed a new term that is often chanted in the business world: “Disruptive Innovation”. It seems to occur with frightening frequency in the technology sector. Apple famously disrupted the music recording industry with iTunes as an example. Can EHS be disrupted? If so how? Hypothetical discussion you say? I’ll bet that’s what the entrenched music industry people said…
Disruptive Innovation is the term coined by Clayton M. Christensen (renowned Harvard
Business Professor) to describe the impact of innovations that enable a new business model at the expense of existing models. Typically it is cheaper and allows a bigger group of consumers to obtain the product or service. It may also solve problems for customers or other stakeholders that the existing products or practices don’t . Frequently it is a new entrant into the market that is not encumbered by the need to focus on sustaining innovations to fend off other existing participants and does not have to worry about existing profit margins on upscale products.
This is an important theory because it can be used to understand the future of markets and thus set the stage for effective business strategy to result in continued business success. Companies that fail to understand this theory can end up realizing too late that their products, services, production method or business model has been replaced in the consumers decision making process . If they wait until the moment the market (consumers) signal them, it’s too late. The incumbents usually can’t make changes fast enough at that point. It’s also quite likely that they don’t have the financial resources to invest in such a transition.
What if EHS was disrupted? How would you serve your customers as an EHS Professional? How would you lead your company to take advantage of this new disruptive technology? For these reasons it’s important for EHS & Sustainability (EHS&S) professionals to understand the theory and remain vigilant for disruptive innovations affecting our markets.
Fast Company published a good article on how to create disruptive innovations and it’s what started me on this post. I would love to prove my skills as the EHS&S Oracle and legendarily predict the most significant disruptive innovations that will occur in the next 5 to 10 years. The only problem is, I don’t know them… yet. I too am on the journey to understand this model. There is a great video on “How to Spot Disruptive Innovation Opportunities” from the Harvard Business School (HBS) that builds on Clayton’s video above. The speaker in the video lists several key aspects of markets to look at as genesis points.
I want to focus on one method/aspect in particular: find the pain points and deliver a simple and cheap answer. What are the pain points for our customers in the EHS world? I came up with the following list:
- Existing training methods
- The difficulty in complying (human behavior)
- The cost of compliance
We have learned from the videos that it’s not usually technology that creates disruptive innovation, it’s alternative business models. What is the typical EHS Business Model? I’ll try a stab at it in a sentence or two:
EHS & Sustainability professionals serve their markets (internal and external) by being subject matter experts. They take specialized knowledge and attempt to deliver useful tools for the organization/customer to use. They attempt to influence the organization/customer to use these tools to improve their operations and activities.
I have simplified the mission and methods of our profession for the ease of this discussion. So what is an alternative business model? Here’s a couple I’ve been thinking of:
- Crowd Sourced EHS – Essentially, it’s using the existing knowledge of the workforce to deliver EHS tools.
- Outsourced expertise – a 1-800 EHS&S service that you call only when an issue or significant need arises. The EHS organization would have a large number of subscribers.
- Free EHS&S service – The cost of EHS would be born buy sponsors who hope to sell their products to the organizations being serviced by the EHS&S organization.
It was not my goal in this post to develop these theories further. Perhaps in another post. My goal today was to get you thinking about disruptive innovation. How to watch out and prepare for it, and to attempt to do it. Those who are successful at disrupting a market leave an indelible mark on our world. Wouldn’t it be great to leave such a positive mark for EHS&S in our world’s great institutions?