Disruptive Innovation

“If I’d asked my customers what they wanted, they’d have said a faster horse.”
–Henry Ford

Based on search terms used by visitors to Leading Space, many are interested in transactional and transformational change.  And why not?  The topics of change and innovation are quite popular in both the public and private sector.  Closer to home, we are on the verge of both houses of Congress passing a landmark NASA Authorization bill that, depending on one’s perspective, injects needed change in how the United States conducts human spaceflight: relying upon commercial entities to provide routine access services to low Earth orbit, and permitting NASA to focus upon beyond low Earth orbit exploration and “game-changing” technologies necessary to make that happen.

That is not what I’m going to write about today.

Instead, I’m going to focus on an aspect of innovation whose terminology is fairly new to my realm of understanding.  However, the associated framework has crystallized several key thoughts I’ve been mulling in recent months.  That term is disruptive innovation.

The term disruptive innovation, and its earlier form disruptive technology, were coined by Clayton Christensen in articles and books he wrote in the mid 1990’s and early 2000’s when describing how it is that large companies can fail to see and react to new technologies and innovations because of their current successes.  However, the concept pre-dates the time of Christensen’s writings.  One of the most often cited earlier references is the quote from Henry Ford, above. This statement reveals one of the key characteristics of a disruptive innovation, in that it gives a customer what s/he needs, rather than what s/he wants.  We see the same thing in action today, most notably by Apple with the introduction nearly a decade ago of the iPod, followed by the iPhone and most recently the iPad.

In the space realm, we have the potential for a disruptive innovation with the introduction of commercial crew and cargo transportation services.  Much of the debate around commercial versus government has centered on capabilities of today and projecting a future performance curve based on previous experiences with government systems.  Concerns over safety and demonstrated reliability enter into the fray, as do costs.

To turn the discussion into one of a disruptive innovation, we need to understand a key measure: performance over time.  In the case of a standard process or system, the performance over time trajectory tends to be flat or changing with a shallow slope (and hopefully with a positive sign, or we have bigger problems).  In the case of a disruptive innovation, the performance over time trajectory is much steeper.  What is typical about disruptive innovations is that when they are initially identified, their performance is typically lower than that of the standard process or system.  However, due to the steeper performance over time slope, the disruptive innovation can meet, even exceed, the performance of the standard process or system.

Take crew and cargo transportation services as an example.  Today’s government-provided system is the shuttle, due to be retired soon.  Depending on who you ask, and what axe that person has to grind, the cost of a shuttle flight is anywhere from $400 million to $1 billion per flight for delivering 7 crew members and roughly 50,000 pounds of cargo to low Earth orbit.  The reason the cost number is hard to pin down is due in part to the associated processes and systems used to prepare, launch, and operate the shuttle, requiring a large fixed infrastructure and workforce.  (I’ve been through this exercise myself earlier in my NASA career as a group lead.  When asked to calculate the difference in cost for running my group of flight controllers for 4, 5, or 6 shuttle flights per year, the answer came out close enough to the same as to render the difference moot.)  The shuttle is extremely capable performance-wise for delivering cargo and crew to low Earth orbit; in fact, it is unmatched today by any existing system for the tonnage of cargo or the number of crew members that can be flown in a single launch.

So, are commercial crew and cargo transportation services a disruptive innovation compared with the government-provided system?  To answer that, we need to look at the following:

Determine whether the innovation is disruptive or sustaining. Christensen offers that one could look at the position of the marketing and financial managers versus the technical staff with an outstanding track record.  If there is an internal disagreement between the two communities, one is probably looking at a disruptive innovation.  If one were to substitute “public sector policy makers” for the marketing and financial managers, I’d say we have a sign of a possible disruptive innovation, whether we are talking about existing expendable launch vehicles such as Delta II/IV or Titan V, or vehicles in development such as Falcon 9.

Define the strategic significance of the disruptive innovation. Here, we have to ask the right people the right questions to get a clear understanding of the significance of commercial crew and cargo transportation services as a disruptive innovation.  This is a bit tricky, because as Christensen points out, current customers are typically not the right people to ask; they will give a great answer for assessing the potential of sustaining efforts, yet are notoriously bad at identifying disruptive innovation.  (Take the Henry Ford case as an example.)  It’s also a bit challenging to inquire with emerging markets, because in the case of commercial crew and cargo transportation services, there is Bigelow, and that’s all that I’m aware of.  Yet there is an angle unique to the public sector involvement, and that is one of policy: using commercial services for routine access to low Earth orbit frees the government to invest in exploration beyond low Earth orbit.  This is a significant strategic point that cannot be underemphasized.

Place responsibility for building a disruptive innovation in an independent organization, and keep it independent. The reason for keeping the development of the disruptive innovation separate from the sustaining effort is that by integrating them together, the disruptive innovation is often the one that gets cannibalized when the going gets tough.  By keeping them separate and measuring performance and outcomes independently, the disruptive innovation is allowed to develop fully.  In the case of crew and cargo transportation services, NASA appears to be embracing this advice for the most part: the government-supplied system is being managed by one organization, and the commercial transportations services by another.  The challenge will be when the day comes that NASA has to face budget cuts, where will those cuts be made?  Additionally, when the commercial transportation services reach a state of readiness, how will they be managed?  These are open questions.

Whether you agree with my analysis above or not, I found the examination of disruptive innovation in the context of crew and cargo transportation services quite useful in looking at my current role in mission operations in Houston.  I see some strong analogies between our situation and the above, and I believe firmly that my work can benefit greatly from an analysis of disruptive innovation.  Those details are for another time and place.

What are your thoughts about disruptive innovation in human spaceflight?