The Innovator's Solution: Creating and Sustaining Successful Growth
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The Growth Paradox
At best one company in ten is able to sustain profitable growth. Yet capital markets demand that all companies seek it relentlessly and mercilessly punish those who fail. Why is consistent, persistent growth so difficult to achieve? Surprisingly, it?s not for lack of great ideas or capable managers, nor is it because customers are too fickle or innovation too unpredictable. Innovation fails, say Clayton M. Christensen and Michael E. Raynor, because organizations unwittingly strip the disruptive potential from new ideas before they ever see the light of day.
In his worldwide bestseller The Innovator?s Dilemma, Christensen explained how industry leaders get blindsided by disruptive innovations precisely because they focus too closely on their most profitable customers and businesses. The Innovator?s Solution shows how companies get to the other side of this dilemma, creating disruptions rather than being destroyed by them.
Drawing on years of in-depth research and illustrated by company examples across many industries, Christensen and Raynor argue that innovation can be a predictable process that delivers sustainable, profitable growth. They identify the forces that cause managers to make bad decisions as they package and shape new ideas?and offer new frameworks to help managers create the right conditions, at the right time, for a disruption to succeed. The Innovator?s Solution addresses a wide range of issues, including:
? How can we tell if an idea has disruptive potential? ? Which competitive situations favor incumbents, and which favor entrants? ? Which customer segments are primed to embrace a new offering? ? Which activities should we outsource, and which should we keep in-house? ? How should we structure and fund a new venture? ? How do we choose the right managers to lead it? ? How can we position ourselves where profits will be made in the future?
Revealing counterintuitive insights that will change your perspective on innovation forever, this landmark book shows how to create a disruptive growth engine that fuels ongoing success.
Surpasses "The Innovator's Dilemma" This book crisply explains the meaning of disruptive innovation
in business. While many of the examples of disruption are
technological innovations, many other examples are
not technological. Nor are the technological examples all
The authors go on to explain why companies fail to embrace
disruptive innovation and give some advice for how
companies can change to sustain growth through disruption.
Understand though that the authors admit (or claim) that no
company have managed to sustain innovation through disruption
across two or more CEOs.
Even if you aren't in management, as an employee this
book might be of use in helping you understand why your
company is winning or losing, and what to look for in
a future employer....more info
Every Page Gave Me a New Idea Great combination of "egg head" business theory and practical techniques. If you're in the technology world your head will spin with all the new ideas this book will generate....more info
Recommended reading for entrepreneurs and corporate managers Collaboratively written by Clayton M. Christensen (Robert & Jane Cizik Professor of Business Administration, Harvard Business School) and Michael E. Raynor (Director, Deloitte Research - Deloitte & Touche and Deloitte Consulting), and The Innovator's Solution: Creating And Sustaining Successful Growth is an informed and informative business guide to creating sustained growth and success. Individual chapters cogently address a variety of relevant concerns, including how to avoid commoditization or disruptive growth, creating products that customers want to buy, distinguishing between "good money" and "bad money", and more. The Innovator's Solution is especially recommended reading for entrepreneurs and corporate managers charged with the responsibility of enhancing their company's success and growth within a local, regional, or multinational marketplace....more info
Ground-Breaking Thinking: Still Quite Relevant Companies of all sizes and in all industries are under constant threat by disruptive business models and technologies. I recommend this book to many CEO's of my business clients, as they grapple with new competitors, many aided by unimaginably low barriers to entry via the Web. A recent example is an 80 year-old travel company, which used to fill tours easily, with thousands of people on a given tour series, is now competing against tiny operators with web-based business who offer niche travel offerings, e.g., for Italian cooking in Tuscany, and whose entire customer base is less than 100 passengers. Clayton Christensen gives both disrupters and the disrupted frameworks for understanding and taking action in these scenarios. This book is an essential read and reference for any C-level executive or anyone tasked with competitive strategy today. Its ideas and examples are as fresh as the day they were penned....more info
Managing Growth Christensen and Raynor argue that growth is not only to be found in sustaining innovation strategies (i.e. incremental improvements made to existing products for a firm's current most profitable customers); but also through disruptive innovation strategies (i.e. seeking out ways of developing, often simpler products targeted at over-served customers, non-users, or both).
Christensen and Raynor stress that the challenges facing many CEOs today are managing the two types of innovation strategy simultaneously within the same firm; and being able to resist the forces such as resource allocation criteria that force companies to maintain sustaining innovation strategies in industries that may be displaying signs of imminent disruption.
This book is excellent if you wish to understand the forces that can drive or hinder a firm's growth with numerous real-life examples throughout the text....more info
Motivation assymetries Already a business classic, this book does not disappoint. Picking up from where the 'Innovator's Dilemma' left off, Christensen and Raynor examine in detail the barriers towards innovation and growth. Perhaps surprisingly, the concepts discussed are as applicable to large enterprises as they are to one man startups. The problem is one and the same - enterprise readers will learn about the pitfalls of institutionalized processes and sustaining innovation; startup teams will learn how to position their products for future success. Whether you are an aspiring entrepreneur, or a high-ranked executive, 'Innovator's Solution' should be at the top of your reading list....more info
Radical theory!! Whether you are a manager or CEO of an established company, an enterpreneur or graduates/MBAs, you will find radical insights in this book.
Mr Clayton M. Christensen has provided revolutionary theory to explain the various phenomena for the rise and falls of great businesses in the past decades. He has explained why some companies with great disruptive ideas failed and how focus approach could incubate innovative disruptive ideas.
In essence, Mr Clayton M. Christensen provides hope for managers and CEOs who are frowning on what is the right strategy for their companies. "There is no right strategy but the management of emergent strategy"....more info
NO SOLUTION HERE. Let me save you the time. The writing in this *executive book* is fluent, reminiscent of Clayton's Innovator's Dilemma. Which makes this a readable book.
But the idea is VERY ordinary if you think about it for more than a minute, a near-mindless rehash of perfectly predictable research methods that are already prevalent and have been available (and exercised) for decades, which means do not expect any solutions to the intriguing and universal problem Clayton posed in "Dilemma."
We are presented with example after example of how companies have missed out on customer targeting. The big token example is of a milkshake retail outlet, which just mistargeted their clientele. The authors then reveal the big tra-la find that this firm's customers in the morning were health-unconscious commuters who needed something to sip on trains, and some kids in the evening...etc etc.
One wonders if the authors have been so busy writing this tripe that something called qualititative marketing research totally escaped their radar. I could count a dozen MR companies *off-hand* that could conduct simple research like this in a matter of 1 week, and have the results on my desk by next Friday.
So much for the "solution." I was sorely disappointed with this book because I have the utmost regard for Clayton. Grab this biz pulp for embellishing your next staff speech. But manage your expectations in terms of real take-aways....more info
A critical tool to understand and succeed with innovation I rate business books on how well they help me understand the business and industry I work in, and at that score, I found The Innovator's Solution to be an extremely valuable book. It builds upon Clayton Christensen's previous book, The Innovator's Dilemma, which showed the paradox that well managed companies that listen to customers, and target the most attractive markets are often blind sided by disruptive change.
While The Innovator's Dilemma described the phenomena, The Innovator's Solution is the business playbook to capitalize on it. The authors categorize business innovations into two types: Sustaining innovations target demanding, high-end customers with better performance than previously available, and disruptive innovations that introduce a product or service to new or less demanding customers, usually by providing a new level of convenience, or similar performance at a lower price.
Christensen and Raynor argue that both innovations are important to companies, although disruptive innovations are the ones that have the greater potential for growth. Unfortunately, disruptive innovations are difficult to identify, and as the authors demonstrate, often are not properly confronted and dealt with by managers. This book shows how businesses can identify the nature of innovations, and how best to allocate resources and plan strategically depending on whether an innovation is sustaining or disruptive.
The authors draw on a large body of case histories and business theory to present a compelling case. It differs from most business books by establishing a model, and then testing the predictions and limits of the model. For that reason alone, it is more valuable than the typical management book, which simply documents what was successful elsewhere, without a real analysis as to the reasons and limitations of this success.
I work in sales and marketing for a niche optical test and measurement company and this book allowed me to identify the sustaining and disruptive innovations occurring in this industry. The Innovator's Solution will help me to make my company more successful, and I expect it will have the same effect for you....more info
Another win and the other shoe of the dillemma The innovator's solution helps answer all of the questions raised in Christensen's first book: the innovator's dilemma. The book is well researched -- to be expected. However, what is different is that the explanations are clearer and more business focused. I can apply these concepts and through processes to my work, which is the best thing, one can say about a business book.
The chapters on growth and avoiding commoditization are particularly important in today's environment.
To be sure that some of the concepts are proposed in an academic way and it takes a while to understand what the "more than good enough" and "less than good enough" concepts. Nevertheless, it works and is worth the time to reflect on what these concepts mean to your business and your future.
Disruption is one of the forces in our society and business. It is one that this book explains very well. You do not have to read the first book "dilemma" to understand and get value out of this book, but once you read the "solution", you can gain a greater appreciation of Christensen's earlier works....more info
Disruptive Innovations Key to Spicing Up Competition Clayton Christensen and Michael Raynor set the tone immediately by showing that most companies cannot sustain growth and by explaining to readers how stock markets factor in growth in the price of any publicly-traded stock. Growing faster than what stock markets see now and expect in the future is essential to move up a stock price.
The resource allocation process is the key culprit in humbling many market leaders when dealing with disruptive innovations. That process typically invites up-market flight rather than head-to-head fight with new market entrants. That flight mechanism is applicable not only to product/service makers, but also to their distributors and retailers. Unlike a sustaining innovation, a disruptive innovation is not compatible with the business model of market leaders. Christensen and Raynor call this behavioral pattern asymmetric motivation.
The way out of asymmetric motivation is for the leadership of an established player 1) to frame the disruptive innovation as a threat during the resource allocation process and 2) to shift responsibility for the project to an autonomous organization that has the relevant experience to frame it as an opportunity. The leadership needs to have a clear understanding of the respective impact of resources, processes, and values on what an organization can or cannot accomplish. Resources and processes are often enablers while values often represent constraints. Unlike deliberate processes, emergent processes should dominate when the future is hard to predict and the right strategy is not yet clear. That is especially true at the beginning of a company's existence. Once the winning strategy becomes clear, deliberate processes become a must to maximize the changes of success.
Christensen and Raynor continue their analysis by sub-dividing disruptive innovations into two categories: new-market disruptions competing with "non-consumption" and low-end disruptions that go after the proverbial "low-hanging fruit." Charting the upward path for a new-market disruption is more daunting because nobody has ever walked the walk. In practice, the distinction between the two types of disruptive innovations is not always clear-cut due to the existence of hybrid disruptions that combine new-market and low-end approaches. Christensen and Raynor also point out that an innovation that passes the new-market or low-end test must be disruptive to all of the significant established players to deserve the label of disruptive innovation.
Christensen and Raynor clearly show that new entrants in turn do not escape from the up-market urge. After driving out the last established market player competing in a certain market segment, cut-throat competition forces new entrants to also move up market for greener pastures.
Christensen and Raynor also reflect on why an overwhelming majority of new products fail miserably in the market-place. Attribute-based segmentation for which data are often available is the lead explanation for these failures. That type of market segmentation too often ignores the jobs that people and companies need to get done and how a product or service can be "hired" for that purpose. Targeting a product or service at the circumstances in which the target audience finds itself, rather than at the target itself is the key to success. Christensen and Raynor drive that point home very well with their story about the milkshake doing a different job for a bored commuter and his/her child at different times of the day. Christensen and Raynor blame the counterproductive attribute-based segmentation to 1) fear of focus, 2) senior executives' demand for quantification of opportunities, 3) the structure of channels, and 4) advertising economics and brand strategies.
Christensen and Raynor pursue their analysis by looking at the traditional distinction between core and non-core competences. Unlike competitiveness that is focused on what a customer values, core competence, as it is usually practiced by managers, is ominously inward looking. The rigidity of that categorization results in downplaying the evolving product architectures and integration over time. Christensen and Raynor highlight the respective impact of interdependent architectures that optimize performance in terms of functionality and reliability and modular architectures that optimize flexibility on industry structures.
Dis-integration that modularity makes possible does not preclude re-integration down the road if market circumstances change or vice versa. Savvy managers anticipate where the money will be instead of solely focusing their companies on the profitable businesses of the past. Developing this intuition is essential to avoid the process of commoditization. If commoditization already happens, de-commoditization can be achieved as well. Christensen and Raynor describe both processes in much detail. For example, the integrated American automakers are evolving toward modular architectures for their mainstream models in order to compete on speed and flexibility. This has in turn led to a significant consolidation of their suppliers.
Christensen and Raynor also clearly demonstrate that none of the attribute-based categorizations of funding such as venture capital vs. corporate capital and public versus private capital are a reliable predictor of a new venture success. Christensen and Raynor correctly point out that the best money is patient for growth but impatient for profit in the first years of a new business. The deal spiral from inadequate growth as Christensen and Raynor call it, results from impatience for growth and patience for profit.
Finally, Christensen and Raynor highlight the three roles that senior executives have to play in leading new growth:
1) Short-Term: To be at the juncture between disruptive growth businesses and the mainstream businesses to decide on the allocation of the company's resources and processes
2) Longer-Term: To lead what Christensen and Raynor call a "disruptive growth engine" to repeatedly launch successful growth businesses
3) Perpetual: To anticipate when the circumstances are changing, and to pass on their know-how to others to identify these signals.
To summarize, Christensen and Raynor made with The Innovator's Solution an important contribution to the better understanding and harnessing of disruptive innovations that are an essential ingredient of what Joseph Schumpeter called "creative destruction."
Insightful exploration into successful growth The Innovators Solution is an OUT-OF-THE-BOX thinking manual which gives expression to the disruptive elements of growth and how to deal with them, amongst other issues. The book is well researched and enlightening, and should be read by serious business people. If you are interested in corporate OPTIMIZATION (not just improvement) read Optimal Thinking: How To Be Your Best Self to OPTIMIZE your growth with a team of optimizers. These books are cutting edge innovative solutions for this millenium....more info
The Next Step in Developing a Powerful Theory "The Innovator's Solut!on" is a worthwhile follow-on to "The Innovator's Dilemma". Some similar case studies are provided, as well as completely new material. Where the "Dilemma" book went deeply into theory and just hinted at solutions, Christensen et al. have advanced and amplified on the original work. If I had to recommend only a single book, I'd put forward "Solution" as it covers much of "Dilemma" and provides new material. However, It is quite worthwhile to take the full depth of background provided in "The Innovator's Dilemma", especially if you find yourself in the position of needing to sell these challenging theories inside a mature organization. Highly recommended, highly actionable, has the potential to be a "game changer"!...more info
Even better than _Dilema_, provides a framework for growth Even software developers should read this book; much like the better books on Agile methodologies, the major contribution is a framework for finding the right kinds of processes for the particular situation that your product and market are in. Naturally, it's also filled with a ton of business information relevant for anybody who cares about the bottom line, but I particularly enjoyed that the text remained a readable set of strategies while still feeling like all sides of the arguments had been thoroughly researched and referenced. Most research paper writers would do well to read this book just to get a feeling for their approach.
The only negative comment I have is around the lack of advice for folks who are running successful sustaining products so that they can assess competition -- it's hard to differentiate crackpot ideas from real threats to the business model, and reacting to every single idea with a competitive solution isn't practical....more info
Excellent analysis Christensen analysis is perfect insofar as its views of disruptive technologies are concerned. I wonder what is the cost analysis of disruptive technologies deployed near or after its life cycle is exhausted.
A Must for all Product Developers If you are at all involved with the creation and marketing of new products (and not just high-tech products), I heartily recommend this book -- you'll walk away with a better understanding of:
-- How resources, process, and values combine to determine what a business organization can, and cannot do -- How to think about "jobs for hire" in order to shape your user-centric innovation strategy -- When to think about producing an integrated vs. a dis-integrated product offering, and why -- What the resource allocation process is and how it will shape the destiny of your company
And, if you've already read "The Innovator's Dilemma", this book will help to expand and clarify many of the concepts you already have seen. For instance, the emphasis is now on "disruptive business models", rather than "disruptive technologies", because it is really how something makes money which is the determinant of whether it is disruptive or not. Disruption is a choice, not something intrinsic to a specific technology.
Definitely one of the best business books of the past year. The chapter on "jobs for hire" is worth the cover price alone....more info
not very bad sorry for my poor english but i am a student in kyoto university in japan and i really enjoyed this book. i have read many reviews on this website and it make me understand that many people will focus on marketing side of the analysis inside this book. but this is not true. the book has many good idea about overall business management. some people will say that these idea are not new. so what? good idea is good idea and i surely enjoy reading the wonderful thought in this book. i would recommendation you read it for youself. i hope my reader review is useful to you. thank you....more info
A must for product developers In this book, Christensen and Raynor argue that disruptive technologies (those technologies with a great potential, like for example: LCD displays, 802.11 wireless protocols, Linux OS, etc) are stall in some companies because of their own culture. The authors explain how innovation can be a predictable process that delivers sustainable and profitable growth. They identify the forces that cause managers to make bad decisions and present their ideas and a new framework to help product developers to create the right conditions, at the right time, for a disrupting-technology to succeed in the company and the market.
They provide real-life examples from many different companies (companies like IBM, AT&T, Sony, Microsoft, and others) that sustain their claims. The authors recommend in the book a mix of sustaining innovations, outsourcing of commoditized products, and recognition and development of disruptive technology-based products.
This book identifies the processes that create successful innovations and the most important thing is the strategies that can be applied in your own project....more info
Innovator's Solution Review This is another Masterpiece from Clayton Christensen, one of the acknowledged opinion leader on Innovation. This 2nd book is a MUST READ for those who have read his first book, "Innovator's Dilemma". This 2nd book provides several good case studies and information on how business growth can be and should be sustained and how to create the necessary growth potential. Once you are done with this book, continue to to read on another of Clayton's book known as Seeing What's Next. Steven Lim (RSTN) Singapore....more info
In Praise of a Disruptive Innovation Theory The first two chapters of this book are so well thought out and beautifully written that reading them literally made my muscles ache and toes curl. I've never had that strong a reaction to any portion of a business book before.
The Innovator's Solution builds on Professor Christensen's landmark book, The Innovator's Dilemma, and explains how managers can overcome the bias he described in the earlier book toward being blindsided by new entrants bringing disruptive technology and products to bear.
There's so much good material in The Innovator's Solution that it is hard to fairly summarize it.
Let me attempt to give you an overview. The authors point out, based on the studies of others, that few large companies are able to grow faster than average. Worse still for managers, they point out that studies of those few which have grown faster are often contradictory in their findings. Best practices may be nothing more than an accidental reaction to a temporary situation. The authors go on to create a generalized theory of what needs to be done in every situation that a company may face in creating and responding to disruptive technologies and products. It's as though Michael Porter had taken his tomes on competitive advantage and provided a single theory for when to apply what. As such, this is one of the most advanced books for creating management processes for using disruptive technologies and business models to discomfit the competition in profitable ways.
Appreciating Figure 2-3 on page 44 is worth the price of the book alone. The authors have created a graphic to explain how markets develop in growth and competitive characteristics. No one who ever sees this graphic depiction will ever think about competitive and development strategies in the same way again.
Although the authors use examples from many different industries, the most detailed and compelling examples come from technology based companies and industries. I found the Sony examples particularly interesting for their repeated creation of new markets and business models.
The book beautifully elaborates on the thinking processes that companies use to lose competitive advantage . . . and should help many leaders counter these wrong-headed thoughts and instincts.
Why, then, does the book have so much theory? As the authors candidly point out at the end, there are few models for what they are proposing. As a result, they have cobbled together a theory from bits and pieces of concepts that appeal to them and seem to fit with one another. Only with experience can we tell how good this theory is. But it's worth understanding and considering.
The authors seem to have missed the bulk of the examples of companies that have made continuing business model innovations in the last decade. That appears to be because they relied on the published literature prior to 2003 to find examples, rather than doing their own research from scratch. Since continuing business model innovators are seldom written about by academics and consultants, these are a little hard to find. A large number of such innovators appear in service industries, which are relatively little mentioned in The Innovator's Solution. Surprisingly, many continuing business model innovators in software, semiconductors, computer components and medical testing are missing from the book. I suspect that the proposed theory could have been much improved by considering these cases. I look forward to seeing what the authors have to say in the future as they look at more cases.
Without attempting to know if the theories are right or not, I can mention my own subjective reactions. The authors seem to be overly focused on products as compared to business models. It is helpful to use both perspectives as starting points for strategic thinking. Analyzing customer behavior by considering what job customers are trying to do seems to me to be much too simplistic. The most disruptive products, technologies and business models have often created changes in behavior where customers do things for the first time. On the other hand, the points made about how to beat the most powerful competitors, selecting the right target customers, scoping the business correctly, avoiding commoditization, managing strategic development, working with the right sources and amounts of funding, and the role of senior executives struck me as more often on the mark than not based on my own research and experiences. Any of the chapters except chapter 3 would probably make helpful reading for just about anyone.
Don't be put off by the authors' emphasis on theory. They are trying to help make you more practical . . . not more abstract. Think of their theory as being like an operating manual for a new product. You may get better results by having clear instructions rather than relying totally on trial and error.
I was extremely impressed by the gracious and thorough acknowledgments in the book of the thinking and research of others. Even when the authors point out the extreme weaknesses and limitations of a particular piece of work, they praise the positive aspects of that work in kind and thoughtful ways. I cannot remember the last time I read an academic book that took such a considerate approach.
After you finish this book, I suggest that you think through how you can inexpensively create a better and more effective balance between creating the industries of the future and optimizing the businesses of today. Your stakeholders will thank you....more info
Another Fad Business Book Alas for those of us who exist in the real world. It is demonstrably untrue that most of the major companies in the industry lost their leads to their competition because of "disruptive" technology. 32-bit OS/2 lost to a 16-bit shell riding on top of an 8-bit OS core (Windows 3.X). You might claim the PC was a "disruptive" system, but Dell is certainly no innovator, nor was Compaq nor was Gateway nor were any of the cloners. They just were more efficient manufacturers, hardly a disruptive "technology." Novell did not lose to NT because NT was disruptive; it lost because it actively discouraged third-party application development and refused to add a GUI to NetWare years after it was clear people wanted one. The Mac was "disruptive" yet a second-rate imitation ended up owning the GUI roost. MicroPro once owned word processing but failed because of an internal positioning war. Ashton-Tate crashed and burned because of a PR fiasco. WordPerfect introduced a stinker of a Windows product just as the market was turning to Windows because the head of the company didn't want to force his best programmers to leave their DOS code bases. CA has flourished by buying dying mainframe companies and milking installed bases. Borland nearly died by pursuing object-oriented programming, arguably a disruptive technology, and held up releases of its core products while it innovated itself into irrelevance. What does any of this have to do with disruption?
The disk drive industry the authors used in "Dilemma" is not very disruptive; rather, it represents an industry that makes steady incremental progress on an underlying technology that has not changed since the 60's; spinning platters coated in metal oxides over which a metal boom rides reading data from magnetically charged particles. This has always been a commodity-driven industry, margins are intrinsically slim, and the key to success is managing the inventory flow as you move to a next generation of smaller, more densely packed platters. A well-run company can handle this and continue to make money at a nice clip if its internal business processes are geared to do this efficiently; Intel is the prime example.
Is the Pentium 4 a "disruptive" chip? Hardly, but it makes Intel a lot of money! Is the Opteron more disruptive? Probably, but is AMD rolling in dough? Nope.
Going back in time, was the 8086 more disruptive than the Motorola 68000? Nope. Who won that war? Intel. How? Crush, a marketing and sales program. Is this an example of "disruptive" technology?
People continue to fall for these fad theories which simply don't track back to events as they actually occurred....more info
Innovators Solution Book It took awhile for the book to get here, but it arrived in good condition. I would use this supplier again....more info
Understands the problem but not the solution. Impractical. This book makes a prescription. It's a pretty simple one. Make sure innovation happens. Hire people to cannibalize the business you are in. Back those people. I will say flatly it is simple-minded.
Another strategy is for a company to get in on disruptive technologies by participating in a venture capital pool in their sector. That's an insurance policy, and a win-win all the way around. They can get a look at what is coming at them and so they can make plans for what the future life of their current line is likely to be - invaluable business intelligence. If the competition is really a disrupter, they get the big payoff from their venture capital investment. Heads they win, tails they win.
This book has a good description of how things work, but the prescription isn't terribly useful. It indicates just how lacking in real world experience Mr. Raynor is....more info
Skip the Dilemma, go straight to the Solution This is one of the best books on business strategy to be published in a long time. If you haven't read the earlier "Innovator's Dilemma", don't bother, just read this book instead.
One of the most interesting discussions in this book is just the definition of a disruptive innovation. It is not, as one might think, simply something new or technically innovative. More importantly, the disruption is relative to the current state of the business. In fact, the exact same innovation may be disruptive to some businesses, but sustaining for others. For example, online retailing, though technically innovative, is not disruptive to existing catalog retailers -- it is merely a more effecient method of doing business. However, it can be very disruptive to existing "bricks and mortar" businesses.
I particularly like the academic bent to the book. While by no means a textbook, the authors strongly emphasize that you can't just look for trends in business, and try to predict futures based on trends. Rather, you need to create defensible, testable theory based from the trends, and only then can you start to develop a more scientific approach to strategy.
For example, the authors cite popular books which champion opposite theories of vertical intergration. Rather than blithely saying the vertical integration is good or bad, they try to develop a theory for the contexts where this makes sense, or where outsourcing is a better way to operate.
All in all, this book is not the fundamental treatise on strategy that Michael Porter's seminal book is, but it is still a must read for the modern business....more info
Interesting theory for big company innovations This is a well researched and informative book that I read after reading "The Innovator's Dilemma" by Christensen. This book answers the questions raised in the first book. I therefore strongly recommend reading the "The Innovator's Dilemma". The books are complementary and outstanding. Christensen and Raynor explains so eloquently and compellingly, the problem of managing and sustaining growth as large companies suffer from the problem of "stalling" since innovations that address small markets get eliminated in the resource allocation process. Conventional market research methodologies are often unable to reveal the potential for markets that do not exist. Disruptive innovations are targeted at exploiting the markets of products that are "good enough" or are competing against "non consumption".
The book provides solution frameworks for design, manufacturing, distribution, organizing and financing of successful strategies of disruption. This book identifies the processes that create winning innovations and the strategies that can be applied in your own project. References at the end of each chapter provide you with useful and insightful sources for further reading should you wish to pursue this subject further. The researcher made good use of these references in piecing together their theories. The authors reinforce their arguments, claims and solutions with real-life examples from many different companies including IBM, Sony, AT&T, Microsoft, and others.
This book focuses on new product ideas at big enterprises and how they should be effectively pursued. When there is no current market for these innovative products and hence no customer base, these technologies are called disruptive. The authors explain how innovation can be a predictable process that can result in sustainable and lucrative growth. They identify the factors that result in poor judgment by managers and present their ideas and a new framework to help product developers to timely create viable and profitable disrupting-technology that meets the needs of the market.
I recommend this book to managers who are interested in cutting edge innovative solutions. This book should be helpful to define a strategy to form the idea into a commercially viable product or service. This book is excellent reading if you wish to understand the forces that can drive or hinder a firm's growth with numerous real-life examples throughout the book.
On the right track This book is an extension of the concepts in Christensen's earlier book "The Innovator's Dilemma" in its attempt to help managers put theory into practice. Though it is advisable to read "The Innovator's Dilemma" before reading this book, Christensen and Raynor have brought out the fundamentals of "Disruptive Innovations" very clearly in the initial chapters, both as a refresher and reinforcement.
While the concept of disruptive innovation cuts across industries , the principles of harnessing the power of such disruptions are equally applicable across various disciplines of management. It is here that the book is a clear winner. It provides solution frameworks for design, manufacturing, distribution, organizing and financing of successful strategies of disruption.
Companies have been constantly grappling with the problem of managing and sustaining growth. Growth is the agenda point # 1 for CEOs of publicly held companies. Big companies have the capacity to attract the best talent and invest large sums of money in growth opportunities, but bigness creates the problem of "stalling" since innovations that address small markets get eliminated in the resource allocation process. A 5 billion dollar company needs 1 billion dollars in growth while a 50 billion dollar company needs a 10 billion dollar opportunity to achieve the same rate of growth. Simple arithmetic, but a very tough situation. Consider the fact that between 1955 and 1995, of the 172 companies that were on the list of 50 biggest companies, only 5 percent were able to sustain inflation adjusted growth of 6 percent. Even across shorter time spans, the number of companies achieving double digit growth rates is in single digits. Size and success suddenly become liabilities of large companies.
Conventional market research techniques fail to unearth the potential for markets that do not exist. Disruptive innovations are targeted at exploiting the markets of products that are "good enough" or are competing against "non consumption". The concept of "hiring products for jobs to do" under the "categorization of circumstances" is bound to generate good debates on how we analyze and size market opportunities. MBA classrooms and corporate boardrooms will be intellectually challenged by this concept and its impact on the resource allocation process.
The authors have used the graphical framework of plotting performance trajectories and customer needs to further analyze the implications for product design and supply chain decisions. The distinction between modular and interdependent architectures and inputs for organizational structure emerging from this framework is an example.
Soft issues on managerial and leadership capabilities, attitudes of investors towards profitability and growth are also discussed.
References at the end of each chapter themselves provide a quick summary of some very interesting theories and findings from other researchers that have been utilized effectively in this book.
This book can lead to excellent research in many industry verticals. In the auto industry for example, what would be the trajectories for fuel cell and battery powered vehicles ? What strategies should car manufacturers adopt on outsourcing of components ? Where would the profits of the industry flow ? What should be the profile of managers who would be leading this transition ?
You have a choice to exercise. Either read this book or regret later....more info
Another Essential Read Clayton Christensen has done it again - another insightful book on the fundamental issue facing corporations today. It should take its place on your bookshelf with the other essential reads on this subject - Christensen's first book "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail", Reid Watts' "The Slingshot Syndrome: Why America's Leading Technology Firms Fail at Innovation", and Richard Foster's "Creative Destruction: Why Companies That Are Built to Last Underperform the Market--And How to Successfully Transform Them". by ....more info
Good Read to get a Framework on Growing Your Company This book was used as additional reading for Technology MBA Course. This book was very insightful and valuable. All important things to consider as one looks at properly growing your company....more info
The First Must Read Business Book of the Millenium I have never written a review before, but I find this book a necessity. For any survivor of the dot com era, the '90's value bubble, or for any participant in the current hunt for value, Innovator's Solution is the place to start. In a world of mixed messages, this book's message is clearly stated and its implications are significant. The point made is that growth and success is based on discovery, not imitation, and discovery is based on the strategy of disruption: finding that one different way to enable incisive profitable growth. The revolutionary aspects of this documented concept is based on the authors' hard research and personal experience, and it lights a candle in the darkness of the current dismal 90's retrospectives and limpid self-help tomes. For anyone who is seeking to start, restart, or build from within a company seeking a value path through the 21st Century, your compass is here. I am strongly recommending this book for all my clients, classes, and friends....more info
Christensen's Dilemma Funny, the author faces the same dilemma as his innovators!! Isn't it about time Christensen innovates around the next "disruptive" management fad?...more info
A dilemma with a solution? I expected Innovator's Solution to provide a resolution to the Innovator's Dilemma-until I realized dilemmas have no satisfactory solution. Innovator's Solution provides common-sense strategies for companies to follow in order to avoid getting blindsided by disruptive innovations--innovate and cannibalize your businesses-but lacks advice on how to avoid being out innovated.
Christensen outlines the Dilemma again in this book, presenting the concepts of disruptive and sustaining innovation, and why large companies consistently struggle with disruptive innovation. He does present some tactics for large companies, such as investing in a venture capital fund. This provides companies with invaluable information about the future in their market and provides an opportunity to identify disruptive technologies early on.
Like many technology books, Innovator's Solution, stretches to make its argument without the aid of quantitative research. Nevertheless, this book is well suited for managers wanting to understand the Dilemma and began putting the theory into practice.
I gave this book 4-stars because it is insightful and very well written. While no golden solution is presented, Christensen outlines several strategies and tactics for addressing the dilemma. Certainly many books will follow by other authors....more info
The Purpose of Your Product Exceptional. Who wants their customers to rave about their products and services? Who wants to know "exactly" what your customers need? Who wants to experience revenue growth for their company? If you answered yes to these then the "Innovator's Solution" is a MUST READ. Clayton Christensen and Michael Raynor have taken us back to the fundamental issue facing a company... that being "what job does my product or service satisfy?" Moving away from features, advantages and benefits and back to the basics of so-what-can-you-do-for-me will bring value to anyone tasked with the duty of using innovation to drive revenue growth. CEO's... read on!...more info
Well worth i t. Please delete this thanks....more info
Very good explanation of the solution This is easier to read than the Innovators Dilemma. There is a more varied range of Product and Industry case studies, which helps to show how broadly this theory can be applied.
What I did like is how he covers the footnotes at the end of each Chapter - so if they don't interest you, you can skip over them, but if they do interest you, then you don't have to struggle to the back of the book. I wish more authors & publishers would use that technique.
One quibble - given his Economics background, he suggests that having competing phone standards is not wasteful. Only an Economist would say that. A Consumer finds it frustrating. He has the good grace to suggest in a footnote that some readers might take issue with him, and I am one. He belittles the benefit of schoolgirls from Sweden using their phone on vacation in Spain, but I can vouch that being able to readily check on the safety of my teenage daughters when they're in foreign Countries for over 10% of the year is a definite benefit!
Given his Economics background - of course there are plenty of graphs, and 99% of them are straight lines - there are no time dependent variances in his world. Also some silly proof-reading slips, such as a "semi-log" graph being described as "semi- long".
Probably still worth reading the Innovators Dilemma before reading this one, just to get the theory....more info
Illuminates Disruptive Innovation, Why Manager's Fail At It Edited 20 Dec 07 to add links to natural capitalism books
I was talking to a friend the other day about why major (multi-billion dollar a year) companies are not good at innovation, and he recommended this book. Wow! Looking at the companies I know and admire, it all became clear. Innovation *is* disruptive; the most promising marketplace is the opposite of their existing defense and intelligence clients--the people that do not get adequate intelligence support from the existing cash cow; and all of the middle and senior managers (Washington-based) are incrementalists who had succeeded at building bodies-for-hire accounts over decades.
For those who feel an intuitive faith in disruptive endeavors, this book is inspiring and also instructional. It specifically suggests that entrants will beat incumbents when the objective is to substitute lower-cost good-enough solutions for client needs that are not satisfied by high end production. However, it also makes clear that the *last* place you want to sell disruptive solutions in to is the existing high end client base. Go for new customers and new contexts.
In government intelligence terms: stop trying to teach the spies that they need to do a better job on open sources of information in 33+ languages. Instead, go after the Departments of State, Commerce, Treasury, Agriculture, Homeland Security, and the elements of the Department of Defense that do not get adequate classified intelligence support. Establish Open Source Intelligence (OSINT) as a viable endeavor there, and in ten years come back and crush the spies in head on competition.
Three "litmus tests" that the authors put forward are very helpful to those seeking to monetize disruptive new ideas:
1) Is there a population of clients that has historically been under-funded, under-staffed, and have as a result *gone without*?
2) Is this group likely to appreciate lower cost "good enough" solutions?
3) Is it possible to be profitable while providing these clients lower cost good enough solutions (e.g. monitoring risk around the world, at the sub-state level, something the spies simply cannot do effectively despite their $50 billion a year budget)?
Another major lesson I drew from this book is that alternative channels can be phenomenally successful. One example the book uses: instead of selling low-cost throw away cameras through photography shops oriented to high-end perfectionists, move them into grocery stores and discount stores for the low-end market that could not afford a traditional camera. This *makes sense.* Hence, instead of trying to sell low-cost open source services to the people who think they have the most to lose from promoting them (the mandarins of the high-cost secrets), go instead to the least well-served end-users, the logisticians, acquisition managers, diplomats, etcetera, and get them to test localized rather than centralized solutions that then "explode" as other end-users see the low-cost success and emulate through decentralized adoption of new best practices.
The last half of the book is loaded with stuff useful to how I am going to structure my relationship with any major corporation--it focuses on a number of key factors including scale, profitability over growth, proprietary end to end solutions in the beginning, transitioning rapidly to open distributed solutions at the right moment, and ensuring that the team members are *not* (NOT) incrementalist line managers that succeeded by going along within a status quo system.
The following quote captures my perception of the imperfection of the guys at the top that don't get it: "In many ways, the managers that corporate executives have come to trust the most because they have consistently delivered the needed results in core businesses cannot be trusted to shepherd the creation of new growth." (Page 183).
The book goes on to discuss the conflict between the traditional processes of managing traditional businesses, the conflict between traditional business values versus those of disruptive innovators (who can tend to alienate and aggravate executives used to having life just so), and between the "pace" of big organizations that need 12 months to think about an opportunity, and small "fleet of foot" innovators that can evaluate, act, write a proposal, and win million-dollar jobs over a week-end.
The authors are generally negative about business unit consolidation, and make the point that the bigger the business gets, the more process takes precedence over people. They specifically caution against a strategy of acquisition as a means of growth, documenting the terrible toll this can take as a cash flow drain, in essence saying that really big growth cannot come from incrementalist approaches. I put the book down with the feeling that the really big companies need to think seriously about launching spin-offs, as Charles Schwab did, and the really small companies, like mine, have a fighting shot at beating the hell out of the established beltway bandits who are too slow, too arrogant, and too rich to be serious about innovation for the future.
This book made me smile, and it made me think. Super piece of work.
Here are some recently published books that can be combined with this one to reintegrate and re-energize our economy:
The Battle for the Soul of Capitalism: How the Financial System Underminded Social Ideals, Damaged Trust in the Markets, Robbed Investors of Trillions - and What to Do About It
Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming
Natural Capitalism: Creating the Next Industrial Revolution
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
The Ecology of Commerce
Cradle to Cradle: Remaking the Way We Make Things
One from Many: VISA and the Rise of Chaordic Organization
Excellent Insights and Ideas A key point in "The Innovator's Solution" is that financial markets relentlessly pressure companies to grow, and to keep growing faster and faster. Yet, considerable evidence exists that once a company's core business has matured, the pursuit of new platforms for growth entails daunting risk - roughly only 10% succeed over more than a few years - thus providing an above average increase in shareholder returns, and often the effort causes the entire corporation to crash. (Twenty-eight percent of those that stall lose 78% of their market capitalization; most of the rest also incur significant, though lesser, losses.)
AT&T is used as an example of what can go wrong. After the '84 mandated divestiture of local phone services, its first attempt at growth was based on the widely shared view that computer systems and phone networks were going to converge. AT&T first tried building its own computer division, achieving at best, losses of at least $200 million/year. It then acquired NCR, but sold it in '96 for a loss of over $6 billion alone, and $10 billion for the total computer venture. AT&T then tried wireless (lost another $5 billion), and broadband (lost another $40 billion).
Incremental innovations are likely to be used by established, leading firms to reinforce their dominance. In computers, G.E., Honeywell, RCA, and AT&T could not muscle in on IBM - that required the disruptive innovation of PCs brought by others. Likewise, IBM and Kodak couldn't beat Xerox at copying - Canon did that via its disruptive table-top.
In disruptive circumstances, the entrants are likely to defeat the incumbents because industry leaders are always motivated to go up-market and almost never motivated to defend small new/low-end markets that new entrants find attractive.
"The Innovator's Solution" uses minimills to illustrate the point. Minimills worked their way up from rebar in several cycles (angle iron, structural steel, sheet steel) that each ended with price/profit collapse after the last integrated producer left the market. The integrated mills were motivated to flee, and the minimills were forced to go up-market to escape their own fierce competition. Toyota et al vs. G.M., Ford, and Chrysler provides another example.
Finally, Christensen and Raynor offer organizational suggestions for nurturing successful disruptive technology development within large firms.
the real thing As CEO of LMS Technical for 28 years, my use of books to help me plan, sustain and improve my business has been a priority. Introduced to this book by my daughter who is presently a student of Christensen, I was skeptical that a "Harvard" read would be too far off the track for a small consulting firm like ours. WRONG! For the past two months, the application of his core beliefs had led our firm to re-direct our postioning and re-think our 2 year goals. A major disruption of delivery of IT network support services is underway in our country. Fed by managed services, and joint global outsourcing arrangements, the industry is being transistioned quickly. It is incredible that the "steel minimills" transistion could be used as an example of how managed services is evolving and how the outcomes could be viewed in the same way. Although the book at first glance seems complex compared to the typical management help books, the extra time taken to understand his ideas will deliver far greater value than any other book I have read over nearly 3 decades. Aligning ones present goals to his set of theories and really working them will extrude new ideas, and help you test all your past assumptions. My team found itself wondering more about our future, after we understood how we had navigated 28 years of change. Disruption as we understand it now played a major part, but more importantly we now see how it will take us forward. My suggestions for enhancing the book> This is a workbook! providing room for notes, and workspace would be great, my copy now looks like a mess, covered with notes, highlighting, and scribble. It will be my bible going forward....more info
Fascinating book that every product marketing professional should read This is turning common marketing and product development wisdom on its head. The basic idea is that you should not follow the masses, go with the flow or to look at previous successes to define your future products and services. Instead look at how people use products and services in their every day life and develop something that will do it better (cheaper, faster, more pleasant).
I loved the airport example about the smart phone...for years we're sold that we need to bring all the office applications onto the berries and PDAs (think Word, Excel, PowerPoint)...your office away from office for all these road warriors. Well it turns out, people don't really care to do office work while on the road. When they have 5-10 minutes to kill at the airport people (when not talking on the phone) like to read the paper, play games, browse through magazines, check sports and stocks online and watch TV. So your competition is not the desktop applications but the newspapers, TV and the entertainment. Voila, need to figure out how to bring that onto the berries/PDA instead of how to cram rich SW apps on the screen.
Another great example was the smoothie cafe. The owners tried all the usual marketing techniques (discounts, different flavors, names) to increase sales to no success. Then they analyzed for a whole week how people use their product. They find out in the morning most people bought a smoothie as a better on-the-go breakfast alternative (coffee was not fulfilling, bananas were messy, doughnuts were less healthy, sandwiches hard to maneuver while driving etc). In the afternoon moms with kids were most of the customers. They bought a smoothie to give a healthier, more fulfilling and cheaper snack to the kids. So the owners adjusted the product to these 2 main uses instead of one universal change across the board.
The book teaches you a new way to look at competition and what you need to innovate against:
Stop looking at your direct competitors to think about innovation (if we had that feature as they did, if we had more widgets, more colors, more sizes...) instead ask yourself if people are not buying this kind of product / service, then what are they doing today to fulfill the need? And so that is your real competition. Sometimes they do nothing in which case you have a virgin territory to explore.
The book warns the change is not easy and in fact is susceptible to lot of push back. There are suggestions and practical examples on how to start implementing this new thinking in the organization.
If anything the book it's a very refreshing look on the strategic planning required to building new products and services. Definitely a great discussion point....more info
excelling value - makes you think This book goes right along with its predecessors in demonstrating how to predict what various members of an industry are driven to do. This book inspired great ideas I had never realized were true; it is much more practical and applied than the previous two books, but you really need to read all 3 to gain the most from what this book offers.
I can't wait to see what the author writes next....more info
Iwant answers, not problems? I assume you're interested in this book because it's a shortcut: we hear that a business can be undermined by [initially] unattractive innovations, aka the innovator's dilemma. But what do we do about it?
The answer is to create those innovations, of course. The proposal is to create small business units, since the initial returns will be small, then make sure they rapidly become _profitable_. Even better, create a new market instead of improving an existing product. A crappy sounding transistor radio lets lots of kids listen to music outside their house, compared to the old vacuum tube model that was stuck in the den....more info