BUS020X618S: WeWork's Historical & Future Development via Innovation

This report examines WeWork's innovation strategies through the lens of disruptive innovation theory. It begins by defining disruptive innovation, outlining its principles, processes, benefits, and limitations. The report then applies this theory to WeWork's historical development, detailing the company's background, target market, and unique services, highlighting how WeWork implemented disruptive innovation to revolutionize shared workspaces. Furthermore, the report explores potential future development pathways for WeWork, recommending strategies based on the continued application of disruptive innovation principles to maintain a competitive edge. This analysis provides insights into how disruptive innovation can drive growth and shape the evolution of organizations like WeWork.

Running head: MANAGING INNOVATION IN ORGANIZATIONS
MANAGING INNOVATION IN ORGANIZATIONS
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Application of Disruptive innovation theory...................................................................................2
Application of disruptive innovation in historical development of WeWork.................................6
Application of disruptive innovation in future development of WeWork.....................................10
Conclusion.....................................................................................................................................11
Bibliography..................................................................................................................................12

2MANAGING INNOVATION IN ORGANIZATIONS
Introduction
As discussed by Vecchiato (2017), innovation can be defined as the methods or ways that
are implemented by organizations for the purpose of doing things or completing specific tasks as
well. The new ideas and devices alone are not able to signify the process of innovation in
different organizations. Modification in the business models and adapting to the changes can be
helpful in achieving the better services and products. Innovation is thereby considered to be the
process of introducing new products and services in the industry and implementing the new ideas
as well. An innovative idea proves to be highly useful in the current business world and it is able
to enhance efficiency levels of different organizations as well (Christensen et al. 2018).
According to Hopp et al. (2018), disruptive innovation can be defined as an innovation
which has the ability to create an entirely new market as well as value based network. The
established market and value network is thereby displaced by the development of a new network
with the implementation of disruptive innovation. Disruptive innovation has also been named as
one of the most influential ideas implemented in the 21st century in different organizations. The
innovative ideas or activities that are a part of disruptive innovation process are considered to be
revolutionary in nature (Gobble 2016). The report will be based on the study of the development
and implementation of disruptive innovation in a major technology based organization like
WeWork.
Application of Disruptive innovation theory
Definition – According to Christensen et al. (2018), the theory based on disruptive
innovation has proved to be powerful method based on proper thinking related to growth that is
driven by innovation. The leaders of the small entrepreneurial organizations have provided major

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levels of importance to the process of disruptive innovation. However, the core concepts of
disruption theory have been misunderstood in a huge manner due to which it is applied in an
ineffective manner. The industry patterns are changed in a huge manner due to the
implementation of disruptive innovation and this is also able to bring changes in various strategic
approaches (Wilson and Tyfield 2018).
The success that is gained by an organization as a disruptive innovator is not applicable
for the all the firms in the same industry. Disruption can thereby be defined as the process in
which a smaller organization can challenge the established incumbent business organizations
with the help of few resources. The entrants are considered to be disruptive in nature if they are
able to overlook the segments by gaining a foothold in the industry. The incumbents in the
industry who seek high levels of profitability provide quick response to the disruptive innovation
processes that are implemented in the operations (van den Broek and van Veenstra 2018).
Principles and processes of disruptive innovation theory – The management of an
organization is considered to be responsible for maintaining its competitive edge in the industry
when the changes are implemented in its operations. The success and failure of a firm is thereby
based on the methods by which different processes are completed rather than the implementation
of any particular technology (Reinhardt and Gurtner 2018). The five principles related to ways
by which disruptive companies run and the reason behind their success are as follows,
1) Customers are able to determine the process of resource allocation – The needs
and demands of customers are taken into consideration by disruptive companies
to decide the resources that are required for development of the products. The
entire organization can be aligned with the disruptive innovation or the entire
organization can split the focus between the sustaining and the disruptive

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innovations or a separate unit can be developed by the firm (Nagy, Schuessler and
Dubinsky 2016).
2) The small markets are able to solve the needs of large firms and they are provided
huge pressure from the shareholders based on consistent levels of growth.
Disruptive innovation can provide major growth opportunities to the small
organizations in different parts of the world.
3) Implementation of disruptive innovation is able to create an entirely new market
that cannot be analyzed easily and the incumbent organizations thereby need to
more time to provide appropriate responses (Sampere, Bienenstock and
Zuckerman 2016).
As discussed by Nagy, Schuessler and Dubinsky (2016), disruptive innovation is
considered to be a process with the help of which different services or products that take root in
the simple applications at bottom of the market. The organizations that implement disruptive
innovation aim at starting the operations at bottom of the market that is more accessible and less
expensive in nature. The disruptive innovators can thereby move to upmarket consumers in order
to displace the established competitors (Alsaaty and Sawyer 2019). Different companies are able
to enhance their growth levels in an effective way with the support that is provided by proper
implementation of disruptive innovation. The disruptive innovation needs to support the
organizations so that they are able to gain a foothold at the lower end of the market (Tabbah and
Maritz 2019).
After an organization has gained success in gaining a foothold in the lower end of the
industry, the quality of products will be improved and the position of the firm will also improve
in the process. The organizations that have implemented disruptive innovation process are

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gradually able to target the mainstream customers with the help of products that are offered by
the firms (Petzold, Landinez and Baaken 2019). The established organizations can aim at
targeting the profitable customers and are able to late reactions to the changes that have taken
place after implementation of disruptive innovation. The main customer is thereby able to kill the
established organizations if the new products are able to fulfil their needs (Nagy, Schuessler and
Dubinsky 2016).
The process of disruptive innovation can occur with the implementation of a number of
steps that are as follows,
1) Incumbent businesses can innovate and also develop the services or products for
the purpose of appealing to the most demanding and the profitable customers and
also ignoring the needs of the down market.
2) The entrants can target the ignored market segment and can also gain traction by
meeting the needs at reduced costs in comparison to the cost that is offered by
incumbents (Gobble 2016).
3) Incumbents do not provide response to new entrants and they continue to focus on
the profitable segments.
4) The entrants can move to upmarket by providing solutions which can appeal to
the mainstream customers of incumbent organizations.
5) After a new entrant has started attracting the mainstream customers of the
incumbent disruption can take place in the industry (Petzold, Landinez and
Baaken 2019).
Benefits of disruptive innovation –

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 The growth and survival of organizations and their respective industries is
considered to be a major benefit that is provided by disruptive innovation
processes.
 The ability to take risks is also a major benefit that is provided to the organization
by implementation of disruptive innovation in its operations (Sampere,
Bienenstock and Zuckerman 2016).
 Disruptive innovation is also considered to be a key aspect that is able to support
the improvement of products or services that are offered by the organization.
Limitations of disruptive innovation –
 Disruptive innovation requires an entirely new strategy and organizational
process.
 The disruptive businesses are not able to achieve high profits fast due to the
nature of implementation.
 The venture capitalists become highly impatient for the purpose of gaining profits
after implementation of disruptive innovation based processes (Reinhardt and
Gurtner 2018).
Application of disruptive innovation in historical development of WeWork
Company background – WeWork is a commercial real estate based organization of
American origin that mainly provides the shared workspaces for different technology based
startups and the services for different other enterprises as well. The organization was established
in the year 2010 and is headquartered in New York City. WeWork has managed more than four
million square meters of office spaces within the year 2018. WeWork mainly operates in the

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designing and building of the virtual and physical shared offices for different companies and
entrepreneurs as well (Wework.com, 2020). WeWork had gained greater than 5000 employees in
around 280 locations that are spread in 86 cities of 32 countries. In the year 2019 the firm had
announced that it aimed rebranding its operations as The We Company and the valuation of the
firm had been around 47 Billion Dollars (Wework.com, 2020).
Disruptive innovation has been an important part of the products as well as the services
that are provided by WeWork to the customers in the different parts of the world. WeWork has
been successful in providing the best levels of services to the entrepreneurs and different
business organizations based on fulfilling their needs related to the development of effective
office spaces. The disruptive innovation had been implemented by the organization for the
purpose of providing the unique services to customers (Klempova and Liepelt 2018). The
support related to the development of an effective workspace that has been provided by WeWork
has been a major part of the innovative activities of the organization. The collaboration among
the members or employees of the organization has been able to support the growth of WeWork
in the industry. WeWork has been able to develop different customer base with the support
related to effective services that are provided for development of workspaces (Avdikos and
Merkel 2019).
Application of disruptive innovation in historical development of WeWork - WeWork
only operates the physical stores rather offering the services on internet as the sales returns
provided by online sales are considered to be unfavorable in nature. The target customers of
WeWork mainly include the young consumers or entrepreneurs who are highly price conscious
in nature and are also require a trendy and effective shared workspace. The target market of
WeWrok is not segmented with respect to the age and lifestyle of consumers. On the other hand,

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WeWork aims at target a broad customer group including different organizations with the help of
proper development of the new trends (Morrison and Macky 2017).
WeWork has become a trend chaser in the industry and this is able to save the costs
related service design and service development process. WeWork is able to offer value to the
customers or entrepreneurs by rented workspaces to them and providing the business
organizations with a complete makeover as well. WeWork has been able to expand its operations
in an exponential rate with the support provided by the unique services of the firm (Lee et al.
2019). The organization has also made major levels of investments in the aspects of data analysis
and machine learning in order to track the ways by which their spaces are being used by the
organizations. The concept of shared workspaces that had been popularized by WeWork had
gone from a single area in New York to different parts of the world due to the levels of
innovativeness that was a part of the idea (Khazanchi et al. 2018). Disruptive innovation has
been implemented by WeWork in order to provide the innovative shared workspaces to its
customers in different parts of the world.
The business model that has been implemented by WeWork is considered to be
disruptive in nature due to the ability of the firm to provide workspaces that are able to enhance
the operations of the firm. WeWork has always aimed at encouraging innovation in the
workplace. The five-step process has been implemented by the organization in order to empower
the employees so that they are can generate the new ideas and can execute them as well (Babb,
Curtis and McLeod 2018). The team partners in WeWorl labs work with the companies of
different sizes in order to implement the framework that is able to generate high levels of
innovation. Business innovation can thereby lead to the creation of new products or streamlining
the existing processes as well. The end goal of innovation implementation is based on driving the

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growth of the firm and providing better solutions to the issues as well (Li, Greenberg and Sharlin
2017).
The process to make innovation possible is thereby based on the following five steps,
 Step 1 – Identification of the issues to work on. The issue can be based on
industry level operations. For example, for the fintech startups the issues have to
be solved on an industry level. Leaders within the legacy banks have been able to
identify the opportunities to create better digital products (Wework.com, 2020).
 Step 2 – Engaging the employees – The employees are considered to be the ones
who are on the frontlines and are able to make the products and communicate
with the customers as well. The engagement of employees can thereby provide
the closest view into different organizational processes. The entire company has
to be engaged in the innovation process for the purpose of ensuring the growth of
the firm (Wework.com, 2020).
 Step 3 – Brainstorming the ideas – After setting up the program or framework the
employees can also start ideating. The employees have to work in such a manner
that leads to the development of startups. The experiences of employees will be
able to play a major role in proper implementation of the concepts and ideas.
 Step 4 – Judging the ideas – After the collection of all the ideas provided by
employees the business leaders have to analyze them in a detailed manner. The
ideas that can be feasibly implemented can thereby be separated from the rest in
this step (Wework.com, 2020).
 Step 5 – Empowering the ideas that have to be executed – The newest and
freshest employee ideas can be generated and they can be implemented in the

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execution stage. The employees who have best levels of ideas can be connected to
the individuals who will be able to implement the ideas (Wework.com, 2020).
The frameworks developed by WeWork have been used by different organizations in
order to ensure that the organizations can become more innovative in nature and the office
spaces can also be developed in an efficient manner. The decentralized decision making based
process of WeWork has enhanced the efficiency levels of the operations of the firm. WeWork
has formed small teams that are mainly dedicated to different sections and collections. The
promotional activities of WeWork had been able to offer autonomy to the organization in order
to design as well as manufacture the services within a short period of time (Klempova and
Liepelt 2018).
Application of disruptive innovation in future development of WeWork
The future development based goals that have been set by WeWork are able to play a
major part in the methods by which the organization aims at maintaining its position and brand
value in the industry. The organization has aimed at planning new priorities for the purpose of
maintaining the services that are being provided to the customers. New priorities have been
planned by the organization for enhancing the future innovation levels in the firm. Diversity has
been in increased within the group and the organization has aimed at gaining the ideas from
employees who belong to different backgrounds (Li, Greenberg and Sharlin 2017).
WeWork aims at gaining new partners and enhancing the revenues gained in its
operations for the purpose of operating effectively in the year 2020. The company has also aimed
at focusing on the opportunities of sales growth that are able to provide a dual purpose. The
levels of brand affinity and revenues have been able to play a major role in proper enhancement

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of services that are offered to the consumers (Avdikos and Merkel 2019). Sustainability also has
been taken into consideration by WeWork in order to uphold the processes in the industry for a
longer period of time. WeWork is trying to create the organic connections with communities in
order to ensure the levels of growth in an effective way (Morrison and Macky 2017). The
support of local communities can be gained by the organization with the help of different
activities that can be performed in order to provide them with effective benefits. Employee
wellbeing will also be provided with maximum levels of importance by WeWork in order to
ensure that the highest levels of contribution are provided by them to the operations of the firm
(Wework.com, 2020).
The enhancement of promotional activities by WeWork will be able to play a key part in
the methods by which the firm can aim at enhancing the awareness related to services that are
provided to the entrepreneurs and different other organizations as well. WeWork can also aim at
providing different attractive packages to the startups or the entrepreneurs so that they can use
the services at lower costs (Babb, Curtis and McLeod 2018). The ideas developed by WeWork
can be communicated to the consumers with the help of proper communication and support that
is provided by the social media as well. The communication process with the customers can play
a major role in enhancing the services that are offered by the organization (Wework.com, 2020).
Conclusion
The report can be concluded by asserting that WeWork has been able to play a key part in
bringing changes in the highly competitive technology industry. The development of innovative
office spaces and services have been able to offer major levels of growth to WeWork in the last
few years. The organization has however started facing some major issues due to the rising
environmental concerns and the enhancement of sustainability levels in the operations have also