Innovation Starts With Disruptive Hypotheses. Here's How To Create One

Innovation Starts With Disruptive Hypotheses. Here's How To Create One
Luke Williams

The process hinges on three steps: Defining the situation, searching for cliches, and twisting those cliches around, according to Luke Williams. A disruptive hypothesis is an intentionally unreasonable statement that gets your thinking flowing in a different direction. It’s kind of like the evolutionary biology theory of “punctuated equilibrium,” which states that evolution proceeds slowly and every once in a while is interrupted by sudden change. Disruptive hypotheses are designed to upset your comfortable business equilibrium and bring about an accelerated change in your own thinking.

The ability to ask, “What if?” is an essential part of every executive’s skill set.
Contrast this with the more traditional definition of “hypothesis,” which is a best-guess explanation that’s based on a set of facts and can be tested by further investigation. With a disruptive hypothesis, however, you don’t make a reasonable prediction (if I charge the battery, the phone will work). Instead, you make an unreasonable provocation (what if a cell phone didn’t need a battery at all?). The difference between prediction and provocation, to paraphrase George Bernard Shaw’s famous line, is the difference between “seeing things as they are and asking, ‘Why?,’ or dreaming things as they never were and asking, ‘What if?’” In our fast-changing world, when business certainties are no longer certain, the ability to imagine things as they never were and ask, “What if?,” is an essential part of every executive’s skill set.

What Do You Want to Disrupt?
To meaningfully differentiate yourself from everyone else in the same space, you have to define the situation in the industry, segment, or category that you want to challenge. Here’s what a list of what you want to challenge might look like:
This is an area in which everyone seems to be stuck in the same predicament and nothing has changed in a very long time.
This is an area where profit performance is average—it really should be more successful than it is.

This is a category where growth is slow and everything seems the same.
Once you have a situation to focus on, describe it in one sentence: “How can we disrupt the competitive landscape in [insert your situation] by delivering an unexpected solution?”
Whether you choose to think about an industry, segment, or category is up to you and your business needs. For example, if you owned a boutique hotel in San Francisco, you might describe your situation in one or more of the following ways:
How can we disrupt the competitive landscape of the Travel & Leisure industry by delivering an unexpected solution?
How can we disrupt the competitive landscape of the Hotel segment by delivering an unexpected solution?
How can we disrupt the competitive landscape of the Luxury Hotel category by delivering an unexpected solution?
That’s it. The important thing is that the high-level situation you choose is just that—high-level. It’s essential that you resist the natural urge to start thinking in terms of specific “problems.”

What Are the Clichés?
Now that you’ve defined your situation, what are the clichés—the widespread, hackneyed beliefs that govern the way people think about and do business in a particular space? If you pay attention, you’ll notice that clichés are everywhere.
Consider the multi-billion dollar video gaming industry. Video consoles were driven by several clichés. First, that the world is split into “gamers” and “nongamers.” Second, that gamers mostly care about faster chips and more realistic graphics. Third, game consoles are expensive. And fourth, that people play video games sitting down, barely moving anything but their fingers. With the Wii, Nintendo turned the gaming industry’s clichés on their head.

Searching for Clichés
Just being told, “Okay, get out there and find those clichés,” can be extremely daunting. So, here are a few tips that will help you jump-start the process. Start by getting online and identifying a handful of direct competitors in the industry, segment, or category you’re focused on. Group together those with similar characteristics (such as size and resources), strengths (such as brand name, distribution), and strategies (such as high quality). Select one or two competitors in each group that are pretty representative of the group as a whole. A total of three to six competitors are the ideal number to work with.
With the Wii, Nintendo turned the gaming industry’s clichés on their head.
Now, do a little research on each competitor and make a list of the clichés that keep everyone doing the same thing, competing the same way, or operating with the same set of assumptions. Keep your research activities quick and informal, intuitive and qualitative. To keep you from drowning in a sea of information, consider using the following three filters:

Product clichés: What are the cliché features and benefits? What are the cliché product attributes that are advertised (convenience and reliability, for example)? Where are the cliché areas where the product competes (typical customers, typical geographies, and typical market size?).

Interaction clichés: What are the cliché steps a customer experiences when buying and consuming their products and services? Is the interaction face-to-face? How frequently do customers purchase or use? In the rental car business, for instance, the prevailing interaction clichés include the following: face-to-face interaction with a service agent, completing a lot of paperwork, and renting vehicles by the day.
Pricing clichés: What are the typical ways companies price their products and services and charge customers? Are they packaging products and services together or pricing them individually? Are they charging the customer directly or through a retail partner? Are they offering discounts or other incentives?

What Are Your Disruptive Hypotheses?
Now that you have a list of the clichés that are influencing the business situation you’re focused on, your next goal is to start provoking the status quo. To do that, you’ll take those clichés and twist them like a Rubik’s cube. You’re trying to find a way to rearrange the pieces, which in turn will provoke a different way of looking at the situation.

What Can You Invert?
If there’s an action, look at the opposite action. If something is happening over time, run the time scale backward. Whenever there’s a one-way relationship between two parties, try changing the direction 180 degrees.

What Can You Deny?
The denial method works by completely dumping key aspects of a cliché. Back to our rental car example for a minute, where the prevailing industry clichés include: See the customer. Complete a lot of paperwork. Rent by the day.
What would happen if you no longer needed to see the customer, you got rid of the paperwork, and you started renting by the hour? Well, you’d end up with something very much like Zipcar. The disruption? Don’t see the customer. No paperwork. Rent by the hour.

What Can You Scale?
What is scarce that could be made abundant? What is abundant that could be made scarce? What is expensive that could be free?
After going through these steps, you should be able to generate several hypotheses that will challenge your established way of looking at an industry and help you imagine radically new scenarios, ask unconventional questions, and discover unexpected advantages. The general rule is that the bolder your “What Ifs,” the fresher the perspective they offer.
Now, while that’s a huge accomplishment, hypotheses aren’t really worth much all by themselves. In the next post, we look at the process process of taking hypotheses and gaining the customer insight necessary to turn them into business opportunities.