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on February 8, 2004
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.
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on July 13, 2004
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.
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on February 24, 2004
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.
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on February 1, 2004
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.
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on January 13, 2004
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.
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on November 21, 2003
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.
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on November 5, 2003
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.
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on October 14, 2003
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.
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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.
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on October 8, 2003
Messrs. Christensen and Raynor are going to shake up corporate America - these ideas fly in the face of how 99% of corporations behave. What really strikes me about these concepts however are how they "should" affect players outside of corporations. Here are my prognostications:
1. Venture Capital - Most VC's are locked in an out dated model and this book gives VC's a way out of their dilemma. Two out of 10 winners should not be an acceptable rate of success - this book should substantially improve that success rate.
2. Stock Analysts - Beyond the crisis of confidence that analysts are experiencing, they actually have a more fundamental problem. And that is their analysis does not provide value to investors. This book provides a new framework to analyze companies and the analysts that are early adopters of this model will provide their customers (and their own trading accounts) a significant advantage.
3. Investment Banks - It is well documented that an overwhelming percentage of M&A activity provides no value to shareholders. This book provides a model for assessing which companies should be purchased and a filter to stop bad mergers - the amount of money that will be saved here is substantial.
Christensen and Raynor have provided these 3 groups with the needed infusion of new ideas that they all desperately need - let's see if they use them.
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