In previous chapters, The Innovator’s Solution authors Christensen and Raynor explored a disruptive strategy of “competing against nonconsumption.” But in so doing, companies are faced with the immediate challenge of how to find and sell to the nonconsumers who can become your customers.  A case study with which many of us are familiar — how Sony scored numerous times with disruptions such as the transistor radio and the Walkman — illustrates the point perfectly.

The Sony case also illustrates another point made in this chapter, which is that disruptive products often require disruptive channels for sales and distribution.  This point is even more pertinent when you use the broader definition of channels that the authors are using: “A company’s channel includes no just wholesale distributors and retail stores, but any entity that adds value to or creates value around the company’s product as it wends its way toward the hands of the end user.” Example: computer makers such as IBM and Compaq are the channels through which Intel’s microprocessors and Microsoft’s operating system reach the end-use customer.

So if a disruptive strategy of “competing against nonconsumption” makes so much sense, the authors point out, why do incumbent companies do the opposite, which is “trying to stretch the disruptive innovation to compete against — and ultimately supplant — established products sold by well-entrenched competitors in large, obvious market applications”? The answer has to do with resource allocation.

Mistake No. 1 is to frame the disruption as an opportunity. Christensen and Raynor’s theory (much of which they credit to HBS professor Clark Gilbert) is that the disruption should be framed not as a potential opportunity for further growth, but as a threat to existing business that cannot be overlooked.  Framing the disruption as a threat allows for top-level resource commitments. Then the disruptive technology should be developed by an “autonomous organization” (another division, a spin-off company) that can frame it as an opportunity.

Mistake No. 2 is to promise big numbers in the future in exchange for resources in the present. “The very effort of trying to articulate a convincing case for resources actually forces the entrepreneurs to cram the innovation as a sustaining technology in the existing market,” because the biggest markets whose size can be substantiated are those that already exist. Then when the results fall short of the promised numbers – because the market of nonconsumers is not being effectively targeted – resources are cut.

The authors suggest that companies that try new-market disruption establish a parallel process in which to evaluate potentially disruptive opportunities, a process in which the go/no go decisions are made based not on numerical rules but on how well they fit the pattern for disruption already explicated by the authors. And even then, the best that can be predicted is that “the initial conditions are conducive to successful growth.”

Disruption is, after all, still a risk.