Beyond Disruption

1. Nondisruptive Creation: Growth Without Displacement

Nondisruptive creation creates new industries without leaving failed companies, lost jobs, and destroyed markets in its wake.

Beyond disruption. For decades, disruption has been seen as the primary engine of innovation and growth, often implying that creating the new requires destroying the old. However, another powerful form of market creation exists: nondisruptive creation. This approach focuses on generating entirely new markets outside the boundaries of existing industries.

Creating new space. Unlike disruptive creation, which invades and displaces existing markets (like Netflix vs. Blockbuster or digital cameras vs. film), nondisruptive creation opens up new market space where none existed before. Examples include:

• Corrective eyeglasses
• Sanitary napkins
• Microfinance
• Sesame Street

Complementary, not replacement. Nondisruptive creation is not a replacement for disruption but a vital complement. It offers a path to innovation and growth that avoids the painful social costs often associated with displacement, providing a win-win scenario for businesses and society.

2. A Positive-Sum Impact on Economy and Society

With nondisruptive creation, in contrast, the new is achieved without disrupting a preexisting market and its associated companies and jobs.

Win-lose vs. positive-sum. Disruptive creation, while offering significant value to consumers and driving aggregate long-term growth, inherently creates a win-lose dynamic. The disrupter wins, but existing companies, industries, and jobs are displaced, leading to painful social adjustment costs like layoffs and hurt communities.

Growth without pain. Nondisruptive creation, however, is a positive-sum approach. It delivers compelling value to buyers by solving previously unaddressed problems or seizing new opportunities, but because it operates outside existing market boundaries, there are no evident losers. This means:

• No displacement of established players
• No loss of existing jobs
• Minimal to no social adjustment costs

Bridging economic and social good. This form of innovation allows economic growth and social good to move in lockstep. Growth is positive from the start, generating new jobs and opportunities without the negative externalities of displacement, helping to bridge the gap between business prosperity and societal well-being.

3. Distinct Business Advantages Over Disruption

Nondisruptive creation opens a much less threatening path to growth and market innovation than disruption does.

Avoiding confrontation. While disruptive creation often means directly challenging well-entrenched incumbents with deep resources (like MoviePass vs. movie theaters), nondisruptive creation allows entrants to bypass this confrontation entirely. Companies like Square and GoPro created billion-dollar markets without attacking existing players, avoiding backlash and costly fights.

Internal and external support. Nondisruptive creation is also easier to implement within established organizations. Because it doesn't threaten existing business units or jobs, it garners greater support from internal stakeholders (employees, managers). Externally, it largely sidesteps the negative backlash, lobbying, and regulatory challenges often faced by disrupters (like Uber or Smile Direct Club), as it doesn't create social carnage.

Viable response to threats. For incumbents facing disruptive threats, pivoting to nondisruptive creation can be a powerful response when direct counter-disruption is unfeasible. Cunard, facing displacement by air travel, pivoted to create the cruise industry. La Poste, challenged by email, created the elder care service Veiller Sur Mes Parents.

4. Rising Importance in a Changing World

Nondisruptive creation is not the answer to the jobs challenge posed; there are many other pieces to the puzzle that are needed.

Stakeholder capitalism demands it. The growing demand for businesses to consider their impact beyond just shareholders is pushing for a more socially responsible form of capitalism. Nondisruptive creation aligns perfectly with this, enabling companies to achieve profitable growth while simultaneously contributing positively to society by creating value without causing harm.

Addressing the jobs challenge. The Fourth Industrial Revolution, driven by AI, automation, and smart machines, promises unprecedented productivity but also significant job displacement across industries and skill levels. While disruptive creation may create new jobs, it often does so by eliminating existing ones. Nondisruptive creation is crucial because it generates net new jobs without displacement, helping to buffer the social and economic costs of technological change.

A policy imperative. Governments seeking to foster growth while maintaining social stability should actively support nondisruptive creation. It offers a path to generate needed employment and economic expansion without the disruptive consequences that require costly social safety nets and can lead to societal unrest.

5. Three Paths to Market-Creating Innovation

What leads to one type of market-creating innovation over another largely comes down to the type of problem or opportunity you set out to address.

Problem dictates outcome. Market-creating innovation isn't a single phenomenon; it manifests in different ways depending on the strategic intent and the nature of the problem or opportunity being addressed. Understanding these paths allows for more purposeful innovation efforts.

The three distinct paths:

• Disruptive Creation: Offer a breakthrough solution to an existing industry problem. This leads to displacement and a win-lose outcome (e.g., smartphones displacing MP3 players).
• Blue Ocean Strategy: Redefine an existing industry problem and solve the redefined problem. This creates new market space across boundaries, resulting in a blend of disruptive and nondisruptive growth (e.g., Cirque du Soleil redefining circus).
• Nondisruptive Creation: Identify and solve a brand-new problem or seize a brand-new opportunity beyond existing industry boundaries. This leads to no displacement and a positive-sum outcome (e.g., microfinance for the unbanked poor).

Intentional growth. By understanding which type of problem or opportunity corresponds to which type of market creation and growth, organizations can consciously direct their efforts towards the desired outcome, whether it's disruptive, a blend, or purely nondisruptive growth.

6. Lead With the Right Perspectives: Agency, Value, and the Many

Established ideas and words lean heavily on us all.

Flip the script. Generating nondisruptive creation requires leading with perspectives that challenge conventional business thinking. Instead of being constrained by "what is" (structure), successful nondisruptive creators lead with "what could/should be" (agency), envisioning new realities irrespective of current limitations.

Value first, technology second. While technology is a powerful enabler, it's not the goal. Nondisruptive creators prioritize value innovation – delivering a compelling leap in value for buyers – and then seek the necessary technology (new or existing) to achieve that value. Confusing the means (technology) with the ends (value) can lead to market failure.

Creativity is ubiquitous. The myth of the lone genius entrepreneur overlooks the vast potential for creativity in everyone. Nondisruptive creation benefits from tapping into the ingenuity of the many – employees, customers, partners, and even seemingly unrelated individuals – recognizing that collective wisdom and diverse perspectives are crucial for identifying and realizing novel opportunities.

7. Identify Opportunity: Explore Unaddressed Problems and Opportunities

When we care deeply about something, it usually means that the issue is of central importance.

Purposeful search. Identifying a nondisruptive opportunity begins with a clear intention to solve a brand-new problem or create a brand-new opportunity outside existing industry boundaries, driven by passion for the issue. These issues are often pressing but have been overlooked or accepted as unchangeable facts of life.

Two main avenues:

• Existing but unexplored: Problems or opportunities that have long existed but lacked a market solution (e.g., lack of credit for the poor, difficulty correcting typing errors).
• Newly emerging: Issues arising from socioeconomic, environmental, demographic, or technological changes (e.g., need for cybersecurity, challenges of rapid urbanization).

Ways to spot opportunities:

• Directly experiencing: Recognizing a problem or opportunity in your own life or work (e.g., McKelvey losing a sale, Fry's bookmark falling out).
• Empathetically observing: Noticing issues faced by others and feeling compelled to address them (e.g., Adebiyi-Abiola observing trash in Lagos slums, Cooney observing children watching TV).
• Actively scouting: Purposefully searching for unaddressed problems or opportunities (e.g., Not Impossible Labs seeking "impossible" challenges).

8. Unlock Opportunity: Challenge Hidden Assumptions

The question to answer here is: What industry should theoretically address this issue, and why hasn’t it done so?

Unearthing the blind spots. Once a nondisruptive opportunity is identified, the next step is to understand why the relevant existing industry has overlooked it. This involves unearthing the implicit and explicit assumptions that have concealed the opportunity, often related to the industry's conventional business model.

Assumption-Implication Analysis: This tool helps analyze the industry's assumptions regarding:

• Risk-return assessment: How the industry evaluates potential risks and rewards (e.g., banks requiring local collateral/credit history).
• Target customers: Who the industry considers its viable customers (e.g., banks focusing on citizens/residents, not foreign students).
• Business scope: What the industry considers within its operational purview (e.g., banks limiting loans to domestic use).

Reframing for possibility. By drawing out the business implications of these assumptions, the reasons for the oversight become clear. The crucial step is then to challenge and reframe these limiting assumptions to find a viable way to unlock the opportunity, as Prodigy Finance did by reframing creditworthiness based on future earning potential and global enforceability.

9. Realize Opportunity: Leverage Enablers and Mindset

Collectively, the three building blocks give you a structure for developing the competence and confidence necessary to succeed on the journey of realizing nondisruptive creation.

Essential enablers. Bringing a nondisruptive opportunity to life requires securing key enablers and adopting a specific mindset. These elements work together to achieve high value at a low cost.

The three enablers:

• Resourcefulness: Creatively leveraging external knowledge, expertise, resources, and capabilities without necessarily owning them (e.g., Square using iPhone's headphone jack, Grameen leveraging social capital).
• Internal resources and capabilities: Effectively utilizing existing organizational assets and building or acquiring new ones (e.g., Tongwei combining aquaculture and solar expertise, Ping An building a network of top doctors).
• "Could," not "should," mindset: Focusing on possibilities and creative solutions rather than being constrained by perceived necessities or existing norms, enabling flexibility and adjustment (e.g., McKelvey asking "Could" we use the headphone jack?).

Confidence meets competence. Success hinges on both the collective confidence of the team in the opportunity and their competence to execute. The Confidence-Competence Map helps assess where an idea stands and guides the necessary rethinking to move it into the "pursue" quadrant, ensuring intellectual and emotional commitment alongside capability.

10. The Future Is Ripe for Nondisruptive Creation

The world is what we make it.

Digital power for creation. The increasing accessibility of digital technology empowers more people than ever to identify and pursue innovative solutions. This ubiquitous power can be directed towards creating new markets that benefit both businesses and society.

Areas of opportunity. Numerous pressing global challenges and emerging trends present fertile ground for nondisruptive creation:

• Aging populations and the need for elder care and new life chapters.
• Growing demands for digital privacy and sovereignty.
• The surging need for reliable, affordable, and clean energy.
• The unprecedented challenges of rapid urbanization in developing countries.
• Environmental issues like waste management and carbon capture.
• The vast, unexplored frontier of space.

A call to action. Nondisruptive creation offers a powerful path to generate growth and jobs without the social costs of displacement, serving as a vital counterpoint to disruptive forces, especially in the age of AI. By applying the frameworks and perspectives outlined, individuals and organizations can systematically identify, unlock, and realize these opportunities, building a better world together.

Last updated: May 27, 2025