CASE STUDY

Hedging Disruption by “Cannibalizing” Current Products and Services

Industry(s):

Financial Services

Emerging Technology:

Computer Vision

Business Drivers

Increasing Market Pressure From Both Existing New Competitors

Key Performance Indicators:

  • Develop an alternative for creating a functional group responsible for driving disruptive products or services
  • Consider incentive mechanisms to attract talent for driving disruptive products
  • Identify the most effective approach for creating market awareness and penetration
  • Determine mechanisms to assimilate disruptive products, services and capabilities into the enterprise

Experimentation Approach & Methodology

2THEDGE developed a competitive intelligence overview to support the business case for developing new products and services. Based on CEO guidance, 2THEDGE collaborated with business leaders to develop the following:

  • An alternative organizational model for creating a functional group responsible for driving disruptive products or services
  • Incentive mechanisms to attract talent for driving disruptive products
  • The most effective approach to creating market awareness and penetration
  • Mechanisms to assimilate disruptive products, services and capabilities into the enterprise

Recommendation

2THEDGE’s Testing and Experimentation as a Service (TEXaS™) provides enterprises with tailored, agile and on-demand innovation services that provide real-world INSIGHTS into emerging trends and accelerate ACTION that delivers transformational business OUTCOMES.

Internal resistance to change is a consistent condition within all organizations. The degree of change required by the employees or organization guides the approach for developing disruptive products or services. Given the highly disruptive nature of these new products and services, 2THEDGE advised creating a separate and non-associated entity to incubate new products and business models based on the following key principles:

  • Focus on innovation and incubation of new ideas and approaches that challenge current market and product assumptions
  • Separate from core business and profitable products to protect both current revenue and blunt corporate resistance to change
  • Minimize corporate association to protect strategic intent and accelerate the product development process

This new and convert entity could be absorbed back into the parent company based on changing market forces such as the following:

  1. Competitor Emergence
  2. Market Growth
  3. Product Profitability

Each of these conditions would foster greater internal acceptance of a disruptive product.