Making disruptive technological change happen; June 2020

In our time of fast technological change, the game-changing consequences of disruptive technological innovations^[*] capture our attention. As firms are increasingly confronted with technological developments that have disruptive effects on firms’ existing (technical) competences and knowledge base and destroys their business models and strategic positioning, ‘disrupt or be disrupted’ seems to have become the mantra that keeps organizations and managers busy.

Making such disruptive technological change happen remains, however, a challenge on its own. The diversity in current discussions within organizational practice and within extant disruptiveness research regarding introducing and developing disruptive technological innovations indicate that important lessons can be learned from empirical case studies.

One of such innovative technologies is called Multi-Party Computation (MPC): MPC consists of cryptographic techniques that make it possible for parties to jointly rely on and analyse their data as if it were a shared database, while they cannot access each other's data with mathematical certainty. In the Care for Data innovation Multi-Party Computation (MPC) technology is introduced in the healthcare domain in collaboration with three organizations. A recent qualitative case study of Care for Data, carried out within the Techruption programme by TNO and the same three organizations, highlights that to understand the challenge of making disruptive technological change happen, one needs to consider two important characteristics of the disruptive technological innovation itself: 1) its collaborative nature, and 2) its emerging nature.

^[*]Disruptive technological innovations concern the process whereby new technologies - often introduced by newcomers - develop into disruptive innovations that capture the market with new business models - often at the expense of established companies. Creative start-ups want to develop disruptive innovations, while established companies fear being surprised by them – see Christensen, 1997 or Christensen & Raynor, 2003.

1) Issues for collaborative disruptive technological change. MPC technology makes it possible to securely analyze data from various organizations as if they were gathered in a single database, without actually having to reveal or share this data. An important finding from the case study is that the incentives, as well as the organizational procedures and formats widely differ across the various organizations eager to exploit MPC technology together. When introducing and scaling-up the technology, these variations pose challenges to the collaboration and coordination. For this reason, governance (i.e. the governance structure of the collaboration as well as a joint IT governance and a joint data governance system), and standardization of formats and procedures are important challenges to address when introducing and scaling-up disruptive technologies across organizations.

2) Issues for emerging disruptive technological innovations. MPC technology is still characterized by a low technological readiness level and thus a dominant design does not yet exist. Furthermore, knowledge of and skills to employ MPC technology within the different organizations is still lacking. Due to this emerging status, the familiarity and reliability of MPC technology is low, making it hard for users to trust – and ultimately accept – MPC technology. Ethical issues, including bias and (human) responsibility in decision-making, and legal issues such as privacy, GDPR, and domain-specific and/or organizational-specific jurisprudence provide added complexity to the introduction and scale-up of MPC technology.
Our findings thus describe several specific challenges for organizations that want to jointly develop and implement disruptive technological innovations for which the technological readiness level is still low. Our main finding regarding the overarching research question is that the technology itself only covers part of the innovation process.

Although Christensen’s theory has received much managerial and academic attention, it remains a managerial challenge to actually make disruptive technological change happen. The analysis of the MPC case study stimulates discussions regarding this disruptor’s dilemma by highlighting the need to consider non-technological challenges to make disruptive technological change happen.

Amber Geurts

This blog was written within the Techruption programme and is co-financed from a PPS allowance for research and innovation from the Dutch Ministry of Economic affairs.