The Man in the White Suit and Disruptive Innovation

by Jörgen Eriksson on February 15, 2013

Mrs. Watson, Sidney’s landlady: Why can’t you scientists leave things alone? What about my bit of washing when there’s no washing to do?

The Man in the White Suit

During the 1950s, Ealing Studios in England produced a string of brilliant satirical movies, often with Alec Guinness as the leading actor. The string of movies included Kind Hearts and Coronets, Ladykillers, The Lavender Hill Mob and the movie that is the topic of this blog post, The Man in the White Suit.

The Man in the White SuitIn The Man in the White Suit, Sidney Stratton, a brilliant research chemist and former Cambridge scholarship recipient, is obsessed with inventing an everlasting synthetic fibre. Whilst working at the Birnley mill, he accidentally invents an incredibly strong fibre which repels dirt and never wears out. From this fabric, a suit is made, which is brilliant white because it cannot absorb dye, and slightly luminous because it includes radioactive elements.

Stratton is praised as a genius until both management and the trade unions realise the consequences of his invention. He has created a disruptive innovation. Once consumers have purchased enough of the new cloth, demand will drop and put the textile industry out of business.

The managers try to trick Stratton into signing away the rights to his invention but he refuses. Managers and workers each try to shut him away, but he escapes. The movies climax sees Stratton running through the streets at night in his glowing white suit, pursued by a mob of both industry managers and employees.

Critical reception of The Man in the White Suit was warm. The movie captures the tensions of 1951 Britain as it moves from socialist austerity towards Tory affluence and it is as critical on the boardroom as on the unions. If you have not seen it then take a look at the theatrical trailer below.

The Man in the White Suit–UK trailer

 

Disruptive Innovation

Guiness-being-held-by-three-menIt is worth while to remember Ealing Studio´s timeless and cautionary tale, when a new disruptive technology seeks to change the rules for everyone. 

A disruptive innovation is an innovation that helps to create a new market and eventually goes on to disrupt an existing market, displacing an earlier technology, and in the process of doing so relentlessly destroys existing companies and value chains.

Disruptive innovation is usually about improving a product or service in ways that the market does not expect, typically first by launching for a different set of consumers in the new market and later by lowering prices in the existing market.

Established companies are usually aware of the disruptive innovations, but their business environment does not allow them to pursue them when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from that of sustaining the incremental innovations that are needed to compete against current competition.

Disruptive innovations are not always disruptive to customers, and often take a long time before they are significantly disruptive to established companies. They are often difficult to recognize. It is often entirely rational for incumbent companies to ignore disruptive innovations, since they compare so badly with existing technologies or products, and the deceptively small market available for a disruptive innovation is often very small compared to the market for the established technology.

Even when a disruptive innovation is recognised, existing businesses are often reluctant to take advantage of it, since it would involve competing with their existing and at the moment more profitable technological approach. 

Disruptive innovations rarely wipe older technologies off the face of the earth, or out of the business world altogether. But they do often wipe out particular companies. One recent such example is Kodak, who continued to focus on film and print as the market moved to digital photography and online publishing, until there was no market left for Kodak.

Often established firms will flee upmarket trying to make up for the revenues and margins lost to the disruption that is rising from below. They often eventually fail. Later on their original technologies may still find suitable applications in human life and commerce. But they will no longer be manufactured by those original firms of the earliest generations, and the value networks around them will be substantially different from the original ones.

The Man in the White Suit portrayed disruptive innovation before the concept was named. The term disruptive innovation was introduced in 1995 by Clayton Christensen and Joe Bower’s in their article "Disruptive Technologies: Catching the Wave" in Harvard Business Review.

Christensen and Bower’s article offered the counterintuitive notion that great companies fail for the same reasons they initially experience success. They listen to their best customers, making increasingly complex products to meet those customers’ most sophisticated needs. This process leaves companies vulnerable to competitors who develop new forms of technology that initially fail to serve the "best" customers well, but quickly improve.

Mobile phone developmentThis process of disruptive innovation enables new competitors to create entirely new product categories. For example, early mobile phones were unreliable and their voice quality paled in comparison with land lines. Then rapid improvement in cell phone technology combined with sharp reductions in cost opened up massive new markets that existing terrestrial business telecommunications companies had missed.

About Jörgen Eriksson :

Jörgen Eriksson is the founder of Bearing and is the Chairman of the firm since it was created. He has successfully expanded Bearing into covering projects on four continents. He is also Adjunct Professor of Innovation Management at the International University of Monaco and at Universitat Politècnica de Catalunya in Barcelona and he is an active member of the Founders Alliance organisation.

Working with consulting engagements across Bearings practices, he has over the past fifteen years participated in and supervised a large number of client projects, from innovation system development and place development and branding, to merger and acquisition assignments and leading edge research and business development activities for key clients.

His new book, Branding for Hooligans, will be published in 2015. It is about how innovation and branding are key survival factors in our modern times of hyper competitive markets.

Prior to Bearing, he was Director of Europe, Middle East, and Africa for Trema Treasury Management, a technology and consulting services provider, supplying financial software solutions for the global financial industry, Clients included The European Central Bank, Citibank, SEB, South African reserve Bank, Deutsche Bank, Abu Dhabi Investment Authority (ADIA), as well as many other large financial institutions and Fortune 500 companies.

Early in his career Eriksson was educated at the Stockholm School of Economics, where he studied economics, financial economics and philosophy. He then worked in Scandinavian investment banks and also for the Swedish Institute of National Defense Research.

You can contact Jörgen on e-mail jorgen.eriksson@bearing-consulting.com, connect on LinkedIn on http://fr.linkedin.com/pub/jörgen-eriksson/0/38/8a0/ and follow him on twitter on joreri508.

{ 4 comments… read them below or add one }

sjmanniex February 15, 2013 at 09:26

Hi Jörgen, I really like your use of ‘The Man in the White Suit’ to illustrate the concept of disruptive innovation. Companies mustn’t get complacent or too comfortable, but need to keep their eyes open for disruptions sneaking up from behind when least expected. Excellent article, thank you.

Jörgen Eriksson Jörgen Eriksson February 15, 2013 at 09:27

🙂

James Nolan March 4, 2013 at 15:04

Hi, Jorgen (sorry about the umlaut)….I really enjoyed this article and the creative presentation of it (with the WHITE SUIT piece.) I have collected a list of many, many articles related to Disruptive Innovation, wwhich, while probably not a “new” concept, is nevertheless MUCH more prevalent in the US these days due to the transition of the economy. The more people writing about it from diverse angles, the more we will all learn about how this devlopment is going to impact the world in which we live. Thanks for the insights. I offer mine as published in Huffington Post, related to the industry of Higher Education….
http://www.huffingtonpost.com/dr-james-michael-nolan/disruptive-innovation-nee_b_2650098.html

Thank you,
Jim Nolan

Jörgen Eriksson Jörgen Eriksson March 4, 2013 at 20:43

Dear Jim,

Thank you for your kind words! As you may have noticed from my posts on this blog, I have a passion for encouraging growth and development through innovation. As the concepts of hyper competition and innovation are not so easy to grasp, I try to present the driving forces through examples like the Man in the White Suit movie. 🙂 I do so both here and in my academic teaching and in our consulting practise.

I will take a look at your text at Huffington Post when I am by my computer tomorrow.

Best regards,
Jorgen

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