Innovation vs. Disruption in the Insights Industry: Semantics Matter

June 19, 2018 Author: Mario X. Carrasco

Last week, I was honored to speak at IIeX2018 NA in Atlanta. We presented a paper on a study that investigates whether there is a better way to drive television return on investment (ROI) with Hispanics at a time when television viewership is declining, and digital and social media usage is ubiquitous among Hispanics. Given lleX's focus on innovation, our presentation, for some, may not have checked all the boxes, especially for those who only see innovation through the lens of technology. But innovation isn’t inexorably linked to technology. Innovation in the insights industry can reference methodology, sampling, survey design, business models, and much more.

In fact, I noticed that innovation was not linked to just technology in the minds of many vendors there either. The words “innovation” and “disruption/disruptive” were used interchangeably among vendors. While this may seem like a minor case of semantics, in my opinion, use of the words interchangeably could be potentially detrimental to our industry as it sets the stage for complacency, drowning out calls for real disruption and real innovation.

So, what is the difference between innovation and disruption and why is this difference important to the insights industry? Let’s first start with defining innovation and disruption:

While there are many types of innovations, the one we see most often in the market research industry is incremental innovation:

Incremental Innovation is the most common form of innovation. It utilizes your existing technology and increases value to the customer (features, design changes, etc.) within your existing market. Almost all companies engage in incremental innovation in one form or another.

About 99% of the vendors at the IIeX fell into the incremental innovation bucket. VR shop alongs? Incremental innovation. Neurotracking? Incremental innovation. While both examples seem like disruptive innovations, they are technologies building on existing methodologies and technologies in an effort to increase value to the customer. In other words, these offerings boast new features that improve output but are not necessarily breaking the mold.

So, what makes an innovation a disruptive innovation?:

“Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others.

This definition is significant in a couple of different ways:

  • Disruption is distinctly different than innovation in that it doesn’t focus on improving products and services like innovation. Instead, it aims to fulfill client needs in an entirely new way.
  • This definition points to how many of us think about innovation in the industry while calling it disruptive, allowing smaller more nimble companies to come in and challenge not only incumbent businesses but industries within the insights market.

Why is this discussion relevant to insights industry? IIeX 2018 highlighted how rapidly technology is changing within our space. However, the technology has been focusing on incremental innovations, largely ignoring the potential for disruption from smaller players focusing on technologies such as blockchain and AI.

While we should all be focusing on innovation to starve off complacency and raise the value meter for our clients, we should also be looking to the future for the next potential disruptive company that could change the way we practice market research forever. Better yet, we should all strive to be that company.