HBX’s Disruptive Strategy course spurs creativity in the boardroom, in the C-Suite, and in student Melaine D’Cruze’s notebook. She applied a unique lens to Clayton Christensen’s course by illustrating “sketchnotes” of the concepts she learned. Read on to see some of Melaine’s illustrations and learn three key ideas from the course.

TYPES OF INNOVATION

There are three types of innovation: sustaining, low-end disruptive, and new-market disruptive.Graphic of innovation types; width: 100px; align: right;Sustaining Innovation

Sustaining innovation is technological progress that results in better products that can be sold to an organization’s best customers. Sustaining innovation typically favors industry incumbents and has three qualities:

  • Makes good products better 
  • Targets most profitable customers
  • Improves profit margins

Low-End Disruptive Innovation 

Low-end disruption occurs when new entrants to the market provide new products to the low end of the market, causing incumbents to flee. This type of innovation is identified by three characteristics:

  • Provides “good enough” products 
  • Targets “over-served” customers, or those are at the bottom of the market who require less product functionality
  • Utilizes a low-cost business model

New-Market Disruptive Innovation

New-market disruptive innovation creates new markets and also disrupts existing competition. This type of innovation is characterized by three qualities: 

  • Targets non-consumption
  • Makes profit for lower price per unit sold
  • Provides lower performance for existing consumers, but higher performance for non-consumers
PHASES OF BUSINESS DEVELOPMENT AND GROWTH 

Growth Phases; width: 100px; align: right;

The growth of a business can be divided into three stages:

Market Creating Phase: the organization focuses on developing a product or service to meet the customer’s needs

Sustaining Phase: the organization evolves the product or service to meet the needs of the best customers in order to beat the competition 

Efficiency Phase: the organization sells mature products or services to the same customers at lower prices



PROFIT FORMULA

Profit Formula; width: 100px; align: right;

All companies must determine how to allocate their resources, and this process decides which initiatives get funded and implemented. To make these decisions, use the profit formula to drive resource allocation effectively. The profit formula is a mix of deliberate and emergent strategies, which both feed into the resource allocation process. That process, combined with learnings from experience and unanticipated opportunities, results in the organization’s actual strategy and the profit derived from it.

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Melaine D'Cruze

About the Author

Melaine D’Cruze participated in the October 2017 cohort of HBX Disruptive Strategy to learn to be a better innovation strategist. She is the manager of planning and operations for the Institute for Educational Development at the Aga Khan University in Karachi, Pakistan. To see more of her work on visual thinking, follower her on Twitter @melainedcruze.