Dynamics, Disruption and the Running Shoe

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This post is a self indulgent exploration of how the new minimalist running shoes represent an excellent example of a classic market disruption to a mature market that exhibits some interesting system dynamics.

The objective of this post is to showcase system dynamics at play in the context of a disruptive market. It is my hope that by the end of this post you will be interested in how system dynamics could provide insights into potential market disruptions.

The chart below is a simple System Dynamics Model developed for this post. We will explain the model a bit more later in the posting. (Sorry iOS crowd, simulation is a flash file, still looking for good HTML5 options for dashboards)

To start, let me briefly provide some context for the topics of this post.

Minimalist running is a new approach to the age old art of running that suggests that less is more. The extreme of minimalist running is barefoot running, but more common adaptations include the popular “five finger” shoes by Vibram, or the more recently released “Minimus” shoes by New Balance.

Regardless of the brand, the idea is that if you do not have padding on your shoe, you will change the way you run to reduce impact. The result is a better running style and fewer injuries. For more background on minimalist running, check out Chris McDougall’s book “Born to Run”

The other topic in this post is system dynamics. This is a rather old framework for thinking that emerged from hard engineering, but has since been adapted to address a wide range of issues. At the heart of system dynamics is the premise that most things in life operate as and can be explained as part of a system. Importantly, these systems contain a number of positive and negative loops that create dynamic behavior in the system. After modeling these systems, we are better able to test and explore how they operate . For more on system dynamics check out the Systems Dynamic Society

The third major concept in this post is the concept of a “disruptive product”. Clayton Christianson’s classic “Innovators Dilema” outlines this concept in great detail, but for the purposes of this post, a disruptive product is one that is initially perceived (and often is) inferior to current market offerings because it is competing on different features or values than the established market offerings.

The minimalist running shoe market is an excellent case to explore an application of system dynamics to a disruptive market, and to see how system dynamics can help us understand and manage market disruptions.

Let’s begin by taking a look at the dynamics of the running shoe, and specifically the dynamics between running injuries and the amount of padding or support in a running shoe. We are looking at these dynamics because the primary job to be done of running shoes is to eliminate or reduce injury.

The systems map details the dynamics that have arguably created the modern two pound, $150 dollar running shoe. The dynamic is that;

  • As people get injured, they feel the need for and demand more padding and support in their running shoe.
  • As the shoe industry complies to this demand, shoes get bigger and more expensive. More importantly, the increased protection disguises the cause of the injury in the first place, and perpetuates or even accelerates a deterioration in our running form.
  • This deterioration in our running form perpetuates and in many cases accelarates the number of running injuries, which starts the cycle over again of demanding more padding and support.

In system dynamics, this is referred to as an accelerating feedback loop. One of my propositions is that, these accelerating feedback loops wherever they are present, represent markets that are ripe for disruption.

The reason these dynamics represent a likely disruption is not actually that complicated. If you think about it, any system that exhibits accelerating growth needs to eventually be brought into balance. Things cannot accelerate endlessly.

While there are a variety of effects, internal or external that could bring this system into balance, a disruptive offering is a common and likely scenario.

Often in systems there are capacity limits. As a system reaches its capacity limit, another dynamic in the system becomes more powerful and begins to overtake the dominant dynamic. Another way to state this, which lines up with the literature on business model innovation, is that the “basis of competition”, or “what really matters” begins to shift.

Another way to state this in system dynamics language is that “disruptions dynamics” often exist in a system already, but are disguised by the dominant dynamic. Classic disruption authors would state this as disruptive offerings being perceived or actually inferior to existing offerings.

To deal with this, we have added a capacity limit to our model. The capacity limit is the point at which enough people are “injured” to cause people to seek or at least be open to alternatives. It is at this pivotal point that an interesting shift in the dynamics takes place. This is the inflection point that gives birth to the disruptive offering.

My proposition here is that capacity limits, if identified, represent the beginning of a disruptive dynamic.

As people “get frustrated with a growing and sustained level of injury, they begin to explore the alternative approach of minimalist running. At this point a balancing dynamic kicks in that lowers the amount of padding, improves form and lowers the number of injuries.

What we suggest in this dynamic model though is actually even more profound. Rather than just bringing the system back into balance, the awareness of a “better way to run” actually changes the capacity threshold for injuries. What this means is that rather than just bringing injury levels to a steady state, the minimalist shoe reduces the number of injuries until they reach the lower state that they started at.

Low levels of injuries are the underlying need of the consumer, and the problem that the running shoe was designed to address. The disruption occurred because something needed to bring the escalating injuries back into balance. The emerging dynamic, or disruption, is a natural outcome of a system seeking balance.

One of the key benefits of system dynamics is the formal mapping of the key dynamics and then the ability to simulate possible scenarios. System dynamics could play a useful role in mapping markets that experience accelerating growth trends in order to identify sub-dominant dynamics, and to explore which of these dynamics has the potential to disrupt the existing dominant dynamic.

In addition to identifying what the potentially disruptive dynamics are, systems models also provide an interesting tool in projecting the potential timing of disruptions. If we can identify the rate of growth of sub-dynamics, we may be able to estimate how much shelf life existing offerings have, and time the introduction of new, potentially disruptive offerings.

With this little post I open myself up to the expert critique of minimalist advocates, system thinkers and purveyors of disruption. Let me know what you think, what resonates or where I am off base?

Also note that the relationships in this model are speculative and used for the purpose of this post rather than to make a definitive statement about this market. With this said, I believe the relationships in this model could be quantified with hard data.

About Brian

Innovation & Strategy Specialist; Focus on Innovation Roadmapping & Business Modeling; Husband, Father, Systems Thinker, Babson MBA, Triathlete. View all posts by Brian →

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