On this week's episode of Inside Outside Innovation, we sit down with Marguerite Johnson, author of Disruptive Innovation and Digital Transformation, 21st Century New Growth Engines. Marguerite and I talk about the evolution of disruptive innovation theory and how legacy companies can embrace digital transformation and open innovation. Let's get started.

Inside Outside Innovation is the podcast that brings you the best and the brightest in the world of startups and innovation. I'm your host, Brian Ardinger, founder of Insideoutside.io, a provider of research, events, and consulting services that help innovators and entrepreneurs build better products, launch new ideas and compete of change and disruption. Each week we give you a front row seat to the latest thinking tools, tactics, and trends in collaborative innovation. Let's get started.

Interview Transcript with Marguerite Johnson

Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger and as always, we have another amazing guest. Today we have Marguerite Johnson. She is the author of a new book called Disruptive Innovation and Digital Transformation: 21st Century New Growth Engines. Welcome to the show.

Marguerite Johnson: Thanks Brian for inviting me and thank you to your Inside Outside audience for listening.

Brian Ardinger: I'm excited to have you on because you've got a new book and it's all about disruption and we are clearly in that particular pathway. That train is hitting us full force. Why don't we talk about how you got involved in innovation space? Give us a little bit background about your career and why this is so important to you.

Marguerite Johnson: I've been in innovation as a practitioner for just over 20 years and my career. Initially started in market research in the big dot com era where anyone, everyone with a website could make money.

It evolved from there into doing a lot of scientific research on cardiovascular blood pathogens for Bristol Myers. And so, moving the large context of digital and how digital was basically burst onto the scene with a lot of companies in this kind of new, exciting way. All the way to how large established companies like pharma was using science and research to touch patients who were experiencing either the need for, the drug at that time was Plavix a blood thinner, primarily used to help patients after a cardiovascular event or primarily a stent. And so my background in innovation was very much a convergence of technology becoming a key player in the role of business. And the larger companies that we're learning to navigate to use it in unique ways and spaces that touch people's lives.

And then it evolved into mostly industrial businesses. So, your large-scale engines, fracking, air motors, industrial pumps, and mixers, and mixing systems and conveyors, and all the way to automotive and electronics and seating systems and safety systems. And so, I've gone through the full gamut, starting with the digital.com era and then evolving into a lot of other what we call nonnative digital, traditional big businesses.

Brian Ardinger: Yeah. Those legacy industries that are facing that disruption and may be in a little different position than some of the new startup technology companies that we're seeing today. Tell me a little bit about why you decided to write this book.

Marguerite Johnson: Like so many other people right now, we're looking around and we're trying to understand and interpret this system environment that we're in. In the past, digital and these large traditional companies were basically separate and apart from one another, they were playing in their own space.

And now we're seeing this drive to bring these competencies together. And when you look at big traditional legacy companies and you look at your native digital, such as your Apples, your Amazons, and Googles, and you see this apex or this inflection point where everyone is moving it into creating more value with digital. And the traditional innovation literature was not ready for this.

When you do any type of research on disruptive innovation and you look at all of the practices around, where do you find new growth in these new spaces? They were all around B2B enterprises and B2B enterprises positioned themselves to defend against new market entrance. And that was primarily focused around a new market entrant coming in with a cheaper, more simple, maybe a less functionality product, and then grabbing additional functionalities and moving up market and taking bigger share.

And so that was the conversation. It did not include digital at all. In fact, Christensen later on came back to explain the reason why the iPhone wasn't included in his original assumptions about disruption. It was more related to the evolution of the laptop, which I challenged that in the book. And, you know, I want to make clear to the audience that my desire is not to rewrite the history or up end the history of disruptive innovation, as it pertains to Christensen's original theory.

I build on his theory. I pride myself in taking all of the published works from many, many authors and researchers in the past and using it to evolve my own knowledge. And that is a reason why I wrote the book as well is, I wanted other people to live their evolution on disruptive innovation through me, as other authors have given me the benefit to live it through them.

That's very, very important to me. I did not want to keep all this knowledge to myself and be the little wizard behind the scenes and say, aha, I have the secret sauce. Knowledge should be shared. And with the accumulation of knowledge, I think we all grow as a society and we all benefit. That was very important to me.

So, understanding the context of disruptive innovation in the past, making sure it was relevant to today, looking around at the science and the research and, and understanding that it wasn't there. And then building on what others have done to bring us to the point where we can have this discussion and move forward as a society and innovation.

Brian Ardinger: So legacy companies obviously need to embrace digital a lot more than they have in the past and that. Why is it so difficult for them to do so, or what's been holding them back?

Marguerite Johnson: If you've spent a century building talent, assets, operations skills, supply chains, and your entire profit model is built around those assets. It's very hard. I mean, it's literally throwing the baby out with the bath water. I mean, that's what it seems like. Okay. So that's absolutely not what it is, but that's how it could sound.

You come to some of these conferences and digital is presented as a disruptor. Digital itself is not a disruptor, how it changes innovation, product services and business models can be a disruptor, but it's not a competency and a capability that's out of the scope of knowledge and abilities of a big company.

You have the customers; you have the biggest part of digital that you need. You can learn to add value to the products and services you're already delivering to them by enabling it with technology. By providing additional value through some connectivity. So traditional companies shoul...

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