Researching Disruptive Innovation in Cloud and Telecom Markets from an Incumbent’s Perspective Through Organizational Sensemaking

The research endeavors to understand how decision makers in incumbent organizations receive, perceive, and make sense of disruptive innovation events in respective markets. This research idea was sparked and motivated by an observation that top-level leaders in many large, successful busi-nesses continued to ignore obvious warning signs of imminent disruption from competing busi-nesses, to a point where their entire businesses were no longer salvageable. Inspired by Christen-sen’s (2000, 2006 and 2008) views on disruptive innovation, the research uses the lens of organi-zational sensemaking, most notably based on the works of Weick (1993 and 2005) as well as many other scholars who presented key research on the topic of organizational sensemaking, endeavour-ing to answer the main research question “How do managers in incumbent businesses receive and make sense of relevant disruptive innovation events in their respective markets?” Research bound-aries were chosen to demarcate a sampling frame within telecom and cloud computing domains, due to the fast pace of innovation within these domains. The research adopts a pragmatic method-ology with a social constructivist epistemological foundation. Thus, the research employs qualita-tive methods and textual analysis of semi-structured interviews.

Analysis revealed two central findings generally present across the sample data set: organizational blindness (inability to detect threats) and organizational paralysis (inability to act upon threats). Constructing a code model for both phenomena uncovered causal, contextual, and intervening conditions and paved the way for answering research questions. Further analysis included thematic analysis, which uncovered significant themes within the data set. Further analyzing these results led into the construction of new theories, namely, innovation peripherality continuum – a novel concept to describe how decision makers view different types of innovation as a continuum based on how ‘peripheral’ the innovation is, relative to the technological core. Another key theoretical contribution is the introduction of the peripheral parallax theory, which suggests that decisionmakers tend to misread oncoming threat signals and interpret them as having a lower technological peripherality (i.e., innovations that are of a more technological nature) than they really do.

The research also introduces a competency destruction theme that is specifically applicable to sales suborganizations, showing that organizations exhibit greater abilities to respond to threats when they are able to reconfigure their sales arm. Additionally, a role-commoditization theme is iden-tified alongside the process of super-specialization in large incumbent organizations, which in turn leads to organizational partial blindness – or the inability to detect oncoming disruption-based threats.

There are numerous implications of the research on management practices. The research exposes new dynamics beyond traditional concepts such as organizational inertia, frame flexibility and frame rigidity, and presents possible answers to the puzzling phenomenon of partial organizational paralysis (when decision makers are able to identify oncoming threats of disruptive innovation, but still do not act upon such identified threats). The research also reveals certain patterns which tend to render organizations more susceptible to the partial blindness phenomena, such as being a disruption leader themselves.