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Clayton M. Christensen
Christensen's thesis in The Innovator's Dilemma, is one that many business people have long suspected. That is, you can follow all the current best rules for running a successful company, listen to your customers, pursue your most profitable lines, and yet fail. And success is still not a matter of luck. It does make one appreciate how complex business is. For example, Christensen points out that sometimes, it is better not to listen to your customers about what they want. Sometimes it is best to focus on the customers you don't have yet, instead of just focusing on your current highest revenue generating, most loyal customers. This book, described as the best business book of 1997, and winner of the Financial Times, Booz-Allen & Hamilton and the Global Business Book Awards, describes the problem of failing while succeeding, and then suggests strategies for avoiding these very pitfalls. Christensen summarizes his insights, as being simple and sensible, and yet perhaps counterintuitive. They include the following, which I quote below: 1) The pace of progress that markets demand or can absorb be different from the progress of technology. In short, markets can get ahead of their customers to great disaster, especially when offering technological solutions. 2) Managing innovation mirrors the resource allocation process. Follow the money. The best ideas aren't necessarily the ones that will get funded, but funding dictates where an organization will go. 3) Just as there is a resource allocation side to every innovation problem, matching the market to the technology is another. Some innovations are too challenging for the market to absorb. Introducing technology is a marketing challenge, and not necessarily a technology challenge. 4) The capabilities of most organizations are far more specialized and context-specific than most managers are inclined to believe. In brief, one company be good at introducing a new concept to the market place, while another not be. One be good at working with low margin products, another not. All this shapes innovation and success. 5) In many instances, the information required to make large and decisive investments in the face of disruptive technology simply does not exist. In short, don't bet the farm on all innovations. 6) It is not wise to adopt a blanket technology strategy to be always a leader or always a follower. Take some easy days, Christensen advises. You don't always have to be the first to market. There's a principle in a lot of sports, where you ride behind the front runner to converse energy. 7) Research summarized in this book suggests that there are powerful barriers to entry and mobility that differ significantly from the types defined and historically focused on by economists. It is possible that start up organizations are the best to engage in disruptive technologies. This would explain why many of the solid industry leaders aren't necessarily the first to market. They let the smaller, more nimble players sort out what is possible. Ultimately, this practice is less disruptive to the market place overall. Janelle Barlow, Ph.D.
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