Creative destruction feels like an oxymoron, partnering something good for business with something less helpful. However, it’s a method companies have used for years, combining ideas of innovation with disruption to build something new. We’re going to take a look at creative destruction, how it operates in practice, and how you can implement it in your business.
WHAT IS CREATIVE DESTRUCTION?
According to the Massachusetts Institute of Technology (MIT), creative destruction refers to ‘incessant product and process innovation mechanism by which new production units replace outdated ones’.
First coined by Joseph Schumpeter (1942), the business world viewed creative destruction as the backbone of capitalism, continuing economic performance through the repeated reviewing and replacement of outdated systems.
HOW DOES CREATIVE DESTRUCTION WORK?
An example from recent years would be the changes in businesses since the advent of the internet. The online marketplace increased competition on a global scale and forced companies to rethink their marketing strategies. When the internet became portable on smartphones, businesses needed to adapt again to entice customers into their stores.
HOW CAN YOU IMPLEMENT CREATIVE DESTRUCTION?
One way to include creative destruction into your business plan is to use the lean startup model. This methodology for starting a business seeks to shorten product development cycles and thrives on experimentation. With 60% of new UK businesses failing in their first three years, having an adaptable business model that responds to new data can be hugely beneficial.
In the Lean Startup Methodology by Eric Ries, he sets out three key steps to this methodology:
- You start with a business idea that is important enough customers will want to buy it.
- You execute the business idea with the minimum viable product (MVP) required.
- You validate the business idea by testing it with consumers and continue to adapt it.
Creative destruction is an excellent way to keep your business fresh and innovative. If you’re interested in incorporating creative destruction into your business model, get in touch with MATTERS2 today.