Michael Docherty defines Collective Disruption as "harnessing the power of two seemingly disparate groups and aligning the best of both worlds at each stage of the value creation process."
Those two "seemingly disparate groups" are (1) startups and (2) large corporations. The brilliant insight that Mr. Docherty shares is that both groups need each other. It's not news to many that corporations are looking to startups like never before for new innovations. But he's promoting the idea of early-stage partnering to co-create new businesses. Startups bring a level of risk-taking and entrepreneurial sprit that is lacking in most large corporations, while those same large corporations have the resources, experience and operational proficiency that most startups lack.
I had the pleasure of interviewing Mr. Docherty and I encourage you to watch our lively discussion about this topic.
Innovation is Not Enough
"Gone are the days when incremental core business innovation was enough to drive business growth," says Docherty. "Core business innovation is now what it takes to simply stay in the game." The whole concept of "New and Improved" is expected and is what it takes just to stay in business today. If you don't make these small innovative changes, you are likely to go out of business. Simply put, incremental innovation helps you survive, not thrive.
"Consumers want to buy the new, exciting stuff," Docherty explains. "Who wants the slightly new iteration on an old product you've known and loved when you can have the fascinating, mind-blowing newness of the latest gadget or software?"
With every industry experiencing an exponential rate of change, incremental innovation helps you stay in the game, but it won't help you grow in any meaningful way. That's why a new approach is needed; one that combines the power of large corporations with the scrappy nature of startups.
No Shortage of Great Ideas
"The world has no shortage of great ideas," says Docherty. "What's often lacking is the ability or the will to act on them." In his book, he talks about the idea of transformative innovation. This is the kind of innovation that doesn't build off an existing product, but rather transforms through seeing the future differently (see related article on Peter Thiel's book Zero to One.)
If your business has a problem following through on transformative innovation, Mr. Docherty believes that chances are "you are identifying needs to support today's business, but are missing the major shifts with your customers."
His recommended solution is that, "big businesses need to partner with entrepreneurs in new ways. The game has changed, so the players must change with it." This requires a new kind of collaboration, which is less about strict (legal-binding) joint-ventures and non-exclusive agreements, but rather a focused collaboration between big and small companies to execute against great ideas.
Give Up the Illusion of Control
What's stopped large corporations with working with startups in the past? The primary issue as Mr. Docherty sees it is the illusion of control. Large enterprises typically want to control ventures and partnerships with startups. But a large corporation's need for control is often the very thing that destroys the entrepreneurial spirit that startups bring to the partnership.
Instead, he recommends that enterprises need to build networks of entrepreneurs. He outlines how to build these innovation networks using 5 steps:
- Set clear goals
- Identify key players
- Informally launch
- Formalize and Expand the Network
- Experiment and Evolve
Trust is build through action steps, instead of a "command and control" mentality. By taking a leap of faith that both parties will mutually benefit, Docherty sees collaboration in ways that allow collective disruption to occur.
A Model for Collective Disruption
"Collective disruption is about applying many of the concepts of collaboration to the strategy of new business creation," Docherty explains. "It's about building and nurturing a network of entrepreneurs, technology startups, and other creative minds and working in concert with your internal resources in a networked approach to rapidly envision, incubate, and commercialize a pipeline of new business opportunities."
Docherty identifies the collective disruption framework in four iterative phases:
When both startups and large enterprises play to their strengths, individuals are tapped for their specialties and transformative innovation can occur. The alternative distribution path is about startups and large corporations working together to co-create transformative new business opportunities. Mr. Docherty brings real experience to this book, having been a corporate executive, entrepreneur, venture investor and now CEO of Venture2, a consulting and venturing firm.
If you're looking for a detailed roadmap on how to co-create transformative innovation, I highly recommend reading Collective Disruption. Michael Docherty delivers a well-documented path to success from which both startups and large corporations can benefit.