Management & Leadership in the Environment of Disruptive Innovation

Long-term research in various industries (Abernathy et al. 1983, Utterback. 1997, Christensen. 2003, Christensen et al. 2003, 2004) offers evidence as to why established organisations are able to deal with incremental innovation and why their failure rate increases when innovation becomes radical or disruptive. In a Schumpeterian understanding, disruptive innovation simultaneously destroys existing and creates new industries (the wind of creative destruction), e.g., typewriter vs. computer or VHS vs. DVD. Other industries, e.g., computer and the camera industry, are confronted with radical innovation, e.g., by convergent technologies, causing major shifts in the macro and microenvironment.

Employing two theories, the disruptive innovation theory and resources, process, and values theory, the paper sets out to explain underlying reasons for such adaptive failure and identify the challenges for both management and leadership in such turbulent environments.

The proposition is that the more radical an innovation becomes, the impact of both technologies and market linkages may result in threats for an industry to become obsolete. Management and leadership need to reflect then on adopting either end-game strategies in a disruptive (Harrigan. 2003, 1980, Harrigan et al. 1983) or change strategies in a radical environment (Balogun et al. 2004, Johnson et al. 2008, Trott. 2008, Tidd et al. 2005).

Such challenges in the environment require management and leadership styles, which embrace organisational learning and future orientation to improve an enterprise’s position in its permanent struggle for survival (Helfer et al. 2006).

Key words: Management and leadership, disruptive innovation, radical innovation, change.