Insurgent Innovation: A strategy to navigate a world where the ‘winner-takes-all’

Gebhard Fugel. (1863–1939) David gegen Goliath.
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Each member of the MAIM Class of 2016 proposes their individual perspectives on innovation management in the lead up to their Degree Show “Through the Kaleidoscope: Perspectives on Innovation Management”. In this post, Nicholas Stafford, shares his perspective on strategic implementation of the digital-age car.

“The revolution is not an apple that falls when it is ripe. You have to make it fall.” – Che Guevara

 

The empire vs. the innovator

 

Over the past hundred years, the car has attained rich social, cultural and commercial significance and built a global empire which is deeply embedded in contemporary society. Cars, and the infrastructure they have established, dominate many landscapes. However, the car is not free to roam where it pleases. Cars navigate the countryside, suburbia and the city landscape by clearly defined and policed roads, junctions, ring roads and motorways and when stationary, they inhabit permitted residential streets, garages and multi-storey car parks. Drivers and their cars rely on national infrastructures of dealerships, fuelling stations and servicing facilities to purchase or lease them, keep them running and maintain them; while national and international authorities regulate and govern their usage within society through legislations and policies. Taking advantage of this intricate ecosystem, savvy entrepreneurs have found gaps to create new business models to cater specifically for the roving car user, establishing chains of motels, drive-through outlets and out-of-town superstores. The gigantic network the car has generated of human and non-human interactions, be they physical, spatial, social, cultural, political or commercial is complex yet ordered. Therefore, any future evolution or paradigm shift of the car will need to either adhere to the embedded system, try to disrupt it or instigate a rival network.

 

The growing discourse on the future of mobility, the car and the automotive industry is gaining momentum with an ever increasing inevitability that dramatic transformations are on the horizon. The emergence of twenty-first century, digital-technology companies such as Google with their self-driving car, luxury electric car manufacturer Tesla and the car-sharing platform Zipcar are challenging the car’s social and cultural relevance in today’s digital-age; much akin to the early automobile pioneers over a hundred years ago who disputed the need for horses with the invention of the internal-combustion engine in an industrialised-age. Car Crazy by G. Wayne Miller (2015) tells the story of the rise of the automobile at the beginning of the twentieth century when zealous rival start-ups battled with one another to establish the motorcar industry in the milieu of an apprehensive public who were unfamiliar with the foreign, noisy, gas-guzzling contraption. The parallels between the past and the current surge in the development of electric, autonomous and connected vehicles as successors to today’s car archetype can be clearly drawn. On one side are the ambitious innovators pushing technology forward, and on the other, the incumbent manufacturers who are content with the status quo; and somewhere in-between a divided public who are influenced by personal experience, global media and the propaganda both sides deliver.

 

My research aim was to 1) further unpack the car’s future transformation in regards to its design and technology, 2) better understand the wider global drivers of change which will impact on the car’s social and cultural significance and 3) devise an innovation implementation strategy for automotive entrants to not only disrupt the current status quo, but to flourish and potential cause an automotive revolution.

 

Change is coming

 

The research I conducted revealed that advancements in automotive technologies and manufacturing techniques is producing a contemporary car which is highly automated, systematically controlled and ‘hermetically sealed’ (Baudrillard, 2005, p. 118). For example, the latest cars are offering Advanced Driver Assistance Systems (ADAS), such as automatic parking features and motorway lane changing assistance which are starting to blur the line between driver control and the car’s autonomy. Volvo’s Concept 26 prototype takes this notion a step further with an interior design which can morph from a driver mode position to a driverless entertainment or work layout—portraying a split personality or multi-image and a multi-purpose car for the near future. While Tesla’s recently launched Model X features a ‘bioweapon defence mode’ which is a medical grade air filtration system which filters out pollen, bacteria, viruses and pollution from entering the interior cabin space—quite literally creating a ‘hermetic seal’ for its passengers to the outside world. The electric-powered Model X sends out a strong statement of ‘I’m not polluting you, and you are not polluting me!’

 

Analysing the wider disruptive drivers of change which are impacting on the car’s use, social position and relevance include demographic shifts (the movement of people, urbanisation, an ageing population), increasing reliance on technology (greater availability and usage) and global connectivity (wider internet access and cheaper air travel). All of which are transforming the global flow and distribution of people, goods, information, knowledge, skills and wealth. These changes are forming new social, political and commercial alliances which are evolving social practices, attitudes and expectations. For example, greater urbanisation, connectivity and smartphone adoption has allowed the Uber taxi-hailing app to flourish because the diverse melting pot of the city is filled with social groups who more readily accept change and embrace new ideas and movements such as the ‘sharing economy’. While the combination of an ageing population and a cohort of Millennials preoccupied with advancing their careers over starting families could greatly accelerate the need, development and adoption of autonomous technologies to fill the inevitable future human workforce gap (Dobbs et al., 2015).

 

Challenging Christensen in a world where the ‘winner-takes-all’

 

Clayton Christensen (1997) coined the term ‘disruptive technologies’ twenty years ago, which advocated a strategy of creating innovative products which were cheaper and less sophisticated than competitors to disruptive the market and then incrementally improving the specifications and performance of the products as they became more established. This orderly, gradual approach may have been viable in a previous commercial era where consumers were more sceptical of adopting new technologies and less demanding, but today the world moves at a faster pace where ‘today’s technology could be outdated tomorrow, and a seemingly irrelevant acquisition or strategic move may wind up shaking up the industry’ (Dobbs et al., 2015, p. 50). Today we expect ‘one-click’ online purchasing and delivery within a few days, we upgrade our smartphones every couple of years, we instantly switch to the latest, greatest and most widely used social media app and happily accept the ease of contactless payment over the inconvenience of chip and PIN. It is little wonder that Christensen’s (2007) original ‘disruptive technologies’ theory seems antiquated and almost irrelevant. Harking back to a time before the arrival of such game-changing, digital-age technologies such as broadband internet, social media and the smartphone which have dynamically influenced social, cultural and economic behaviour, attitudes and practice in the twenty-first century.

 

Although the digital-age has broken down traditional barriers allowing a greater global flow of resources, information, knowledge and capital—bringing greater opportunities to a wider audience—the result has actually been an increased ‘winner-takes-all’ economy and ‘superstar’ markets (Brynjolfsson & McAfee, 2014). For example, ‘Only 4 percent of software developers in the burgeoning app economy have made over a million dollars’ (Brynjolfsson & McAfee, 2014, p. 151) while ‘average FTSE 100 CEO pay in 2014 was 183 times the earnings of the average full-time UK worker’ (Rodionova, 2015) and with a reported $178 billion in cash, ‘Apple could buy Ford, GM, and Tesla and still have $41.3 billion left over’ (Colt, 2015).

 

The foundations of Insurgent Innovation

 

Evaluating the research insights, the principal recommendation I propose is that automotive innovators and start-ups have the option of taking two routes to develop and implement a twenty-first century, digital-age car. The first is the regular ‘disruptive technologies’ (Christensen, 1997) route and the second is an irregular insurgent one. The decision of which path to take will depend on the innovator’s aim and business model; either to grow, gain mass and sell-out to a cash-rich rival or to start a revolution. The disruptive route entails incrementally developing new technologies and expanding evenly until a competitor feels threatened or wishes to absorb the technology into their own network. While the insurgent route is more fragmented, adaptable and holistic, involving not only developing new technologies but also a widespread rival network; the logic being that an uneven infrastructure with diverse followers is more resilient to being acquired or quashed in one swoop. The ultimate aim of the insurgent innovator is to outsmart, out-manoeuvre and encircle its rivals and force them into subordination. Tesla is a good example of an Insurgent Innovator because they taken a top-down approach to their product development—starting with high-end, luxury, sophisticated vehicles to gain prestige before entering the mass market. Simultaneously, Tesla is building a global network of electric charging stations in anticipation of future uptake and also gaining a hold on the development and manufacture of battery technology which competitors will undoubtedly come knocking on Tesla’s door to purchase in the future as over-crowded global cities start enforcing zero-emission vehicle policies. Both implementation routes risk failure if the proprietor’s innovation doesn’t reach a critical market significance. While both routes adhere to the idea that even though the digital-age world has become more open and offers more opportunities to a wider community, it is increasingly unequal where power and technological advances are short lived and the ‘winner-takes-all’.

 

Stay tuned for the upcoming MAIM 2016 Degree Show, taking place at Central Saint Martins from 22 to 26 June 2016.

 

*Baudrillard, J. (2005) The System of Objects. London: Verso.

*Brynjolfsson, E., & McAfee, A. (2014) The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York: W. W. Norton & Company.

*Christensen, C. (1997) The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business Review Press.

*Colt, S. (2015) 15 Mind-Blowing Facts About Apple’s Latest Quarter. Available at: http://uk.businessinsider.com/15-mind-blowing-facts-about-apples-q1-15-earnings-2015-1?r=US&IR=T#in-fact-apple-could-buy-ford-gm-and-tesla-and-still-have-413-billion-left-over-8 (Accessed: 08/03/2016).

*Dobbs, R., Manyika, J. & Woetzel, J. (2015) No Ordinary Disruption: The Four Global Forces Breaking All the Trends. New York: PublicAffairs.

*Miller, G. (2015) Car Crazy. New York: PublicAffairs.

*Rodionova, Z. (2015) CEO pay gap demotivates staff, report finds. Available at: http://www.independent.co.uk/news/business/news/ceo-pay-gap-demotivates-staff-report-finds-a6778291.html (Accessed: 08/03/2016).