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Bringing Tech to Market: The Rules of Innovation
Everyone knows that best-quality plus first-to-market doesn't always equal success. A Harvard prof who specializes in this stuff has a great article in Technology Review that digs a lot deeper, called
The Rules of Innovation.
It's a look at why some technologies are marketplace success stories and some are forgotten failures -- and more, an attempt at rules which predict which will be which. There are lessons here for the entrenched companies (e.g. Sony) as well as for the disruptive upstarts (e.g. Sony 50 years ago). You have to understand the battlefield to win the war.
i think the biggest factor boils down to luck...
In computers, it's the SoundBlaster principle. If you're first, you win. Even if your technology sucks. Creative Labs was putting out the crappiest soundcards out there for a LONG time - and took the market. Same with Microsoft, and 3dfx... 3dfx managed to blow it, but for the most part, in the computer market, if you don't blow your lead... first wins.
.COM
That's why all the VC's went nuts trying to stake out
Bringing new technology to market is a crap shoot, right? Wrong, says innovation guru Christensen. Follow his four rules to a new science of success.
Two decades ago, when I was just out of graduate school and working in the automotive industry, I got my first introduction to the statistical process-control chart. We used this laborious technique to make sure the machines employed in our manufacturing process did not drift out of control. Composed of three parallel horizontal lines, the "SPC" chart has long been an important tool in quality management. The center line represents the targeted value for the critical performance parameter of a product being manufactured. The lines above and below it represent the acceptable upper and lower control limits. If the product were, say, an axle, workers would plot the thickness of each piece they made on the chart. When I asked why there was typically a scatter of points around the target, my managers cited the randomness inherent in all processes.
The "Quality Movement" of the 1980s and '90s subsequently taught us that there isn't randomness in processes. Every deviation of the actual value from the target has a cause. It appears to be random when we don't know the cause. The Quality Movement developed methods for identifying those additional factors--and we discovered that if we could control or account for all of them, the result would be perfectly predictable, and there would be no need to inspect products as they emerged from manufacturing.
The management of innovation today is where the Quality Movement was 20 years ago, in that many believe the outcomes of innovation efforts are unpredictable. The raison d'être of the venture capital industry is belief in the unpredictability of new businesses. A few ventures will succeed; most won't, the VCs say. They therefore place a portfolio of bets, extracting premium prices for their capital in order to earn the high return required to compensate for the risk that unpredictability imposes. I believe, however, that innovation isn't random. Every undesired outcome has a cause. Those outcomes appear to be random when we don't understand all the factors that affect successful innovation. If we could understand and manage these variables, innovation wouldn't be nearly as risky as it appears.
The good news is that recent years have seen considerable progress in identifying important variables that affect the probability of success in innovation. I've classified these variables into four sets: (1) taking root in disruption, (2) the necessary scope to succeed, (3) leveraging the right capabilities and (4) disrupting competitors, not customers.
Of course, building successful businesses is such a complicated process, involving subtle interdependencies among so many variables in dynamic systems, that we're unlikely ever to make it perfectly predictable. But the more we can master these variables, the more we will be able to create new companies, products, processes and services that achieve what we hope to achieve.
Take Root in Disruption
The startling conclusion suggested by the research that led to my writing The Innovator's Dilemma was that many successful companies stumble from prominence not because they're badly managed but precisely because they are well managed. They listen to and satisfy the needs of their best customers, and they focus investments at the largest and most profitable tiers of their markets. Mastering these paradigms of good management gives established companies, as a group, an extraordinary track record in producing sustaining innovations that bring better products to established markets. It matters little whether the innovation is incrementally simple or radically difficult, as long as it enables good companies to make better products that they can sell for higher margins to their best customers in attractively sized markets. The companies that had led their industries in prior technologies led their industries in adopting new sustaining technologies in literally 100 percent of the cases we studied.
In contrast, the leading companies almost always were toppled when disruptive technologies emerged--products or services that weren't as good as those already used in established markets. Disruptive innovations don't initially perform well enough to be sold or used successfully in mainstream markets. But they have other attributes--most often simplicity, convenience and low cost--that appeal to a new, small and initially unattractive (to established firms) set of customers, who use them in new or low-end applications.
The chances a new company could become successful if its entry path was a sustaining strategy--trying to make a better product than the incumbents and selling it to the same customers--were about six percent in our study. The chances of success for firms that entered with a disruptive strategy were 33 percent. The disparity stems from the motivation and position of the leading firms. They have far more resources to throw at opportunities than entrants do. When newcomers attack customers and markets attractive to the leaders, the leaders overwhelm them.
All companies are burdened with "asymmetric" motivations in that they must move toward markets that promise higher profit margins and the most substantial and immediate growth and cannot move down market toward smaller opportunities and profit margins. When new entrants take root with customers in markets that are unattractive to the leaders, they are safer--and it has nothing to do with how much cash or proprietary technology they have. They are safe because the incumbents are motivated to ignore or even exit the very markets that the entrants are motivated to enter. Taking root in disruption, therefore, is the first condition that innovators need to meet to improve the probability of successfully creating a new growth business. If they cannot or do not do this, their odds of success are much smaller.
There are two tests to assess whether a market can be disrupted. At least one of these criteria must be met in order for an upstart to be disruptively successful. If a new growth business can meet both, the odds are even better.
1. Does the innovation enable less-skilled or less-wealthy customers to do for themselves things that only the wealthy or skilled intermediaries could previously do?
When an innovation fulfills this condition, even if it can't do all the things existing offerings can, potential customers excluded from the market tend to be delighted. For example, many people loved the first personal computers, no matter how clunky the booting process and limited the software the machines could run, because the alternative to which they compared the PC wasn't the minicomputer--it was no computer at all. Filling such a void reduces the capital commitments and technological achievements required for an innovation to become viable and creates new growth markets. I call the process of finding and nurturing these opportunities creative creation. After a technology takes root in new markets, and after new growth is created, disruption can invade the established market and destroy its leading firms.
Even if innovators succeed in cramming disruptive technology into an existing market application, the incumbents typically win. Digital photography, online consumer banking and hybrid-electric vehicles are examples of potentially disruptive technologies that were deployed in such a sustaining fashion. Billions were spent on these innovations to beat out already acceptable and habitual technology; little net growth resulted, as sales of the new products cannibalized sales of the old; and the industry leaders maintained their rule.
2. Does the innovation target customers at the low end of a market who don't need all the functionality of current products? And does the business model enable the disruptive innovator to earn attractive returns at discount prices unattractive to the incumbents?
Wal-Mart, Dell Computer and Nucor are examples of disruptive companies that attacked the low ends of their markets with business models that allowed them to make money at discount prices. Wal-Mart started by selling brand-name products at prices 20 percent below department store prices and still earned attractive returns because it turned inventory over much more frequently. Such a disruptive strategy can create new growth businesses but does not create new markets or classes of consumers. It has a high probability of success because the reported profit margins of established companies typically improve if they get out of low-end, low-margin products and add in their stead high-margin products positioned in more-demanding market segments. By assaulting the low end of the market and then moving up, a new company attacks, tier by tier, the markets from which established competitors are motivated to exit.
Pick the Scope Needed to Succeed
The second set of variables that affects the probability that a new business venture will succeed relates to its degree of "integration." Highly integrated companies make and sell their own proprietary components and products across a wide range of product lines or businesses. Nonintegrated companies outsource as much as possible to suppliers and partners and use modular, open systems and components. Which style is likely to be successful is determined by the conditions under which companies must compete as disruption occurs.
In markets where product functionality is not yet good enough, companies must compete by making better products. This typically means making products whose architecture is interdependent and proprietary, because competitive pressure compels engineers to fit the pieces of their systems together in ever more efficient ways in order to wring the best performance possible out of the available technology. Standardization of interfaces (meaning fewer degrees of design freedom) forces them to back away from the frontier of what is technologically possible--which spells competitive trouble when functionality is inadequate. This helps explain why IBM, General Motors, Apple Computer, RCA, Xerox and AT&T, as the most integrated firms during the not-good-enough era of their industries' histories, became dominant competitors. Intel and Microsoft (raps about the latter's supposed lack of innovation aside) have also dominated their pieces of the computer industry--compared to less integrated companies such as WordPerfect (now owned by Corel)--because their products have employed the sorts of proprietary, interdependent architectures that are necessary when pushing the frontier of what is possible. This also helps us understand why NTT DoCoMo, with its integrated strategy, has been so much more successful in providing mobile access to the Internet than nonintegrated American and European competitors who have sought to interface with each other through negotiated standards.
When the functionality of products has overshot what mainstream customers can use, however, companies must compete through improvements in speed to market, simplicity and convenience, and the ability to customize products to the needs of customers in ever smaller market niches. Here, competitive forces drive the design of modular products, in which the interfaces among components and subsystems are clearly specified. Ultimately, these coalesce as industry standards. Modular architectures help companies respond to individual customer needs and introduce new products faster by upgrading individual subsystems without having to redesign everything. Under these conditions (and only under these conditions), outsourcing titans like Dell and Cisco Systems can prosper--because modular architectures help them be fast, flexible and responsive.
Leverage the Right Capabilities
Innovations fail when managers attempt to implement them within organizations that are incapable of succeeding. Managers can determine the innovation limits of their organizations quite precisely by asking three questions: (1) Do I have the resources to succeed? (2) Will my organization's processes facilitate success in this new effort? (3) Will my organization's values allow employees to prioritize this innovation, given their other responsibilities?
Beyond technology, the resources that drive innovative success are managers and money. Corporate executives often tap managers who have strong records of success in the mainstream to manage the creation of new growth businesses. Such choices can be the kiss of death, however, because the challenges confronting managers in a disruptive enterprise--and the skills required to overcome them--are different from those that prevail in the core business. Many innovations fail because managers do not know what they do not know as they make and implement their plans. That is, they assume that the same strategies and customer needs that apply in mature, stable markets will apply in disruptive ventures. But this is not the case, and by making such assumptions, managers close themselves off from opportunities to discover what customers really find useful in new, disruptive products.
Innovators must avoid two common misconceptions in managing the other key resource, money. The first is that deep corporate pockets are an advantage when growing new businesses. They are not. Too much cash allows those running a new venture to follow a flawed strategy for too long. Having barely enough money forces the venture's managers to adapt to the desires of actual customers, rather than those of the corporate treasury, when looking for ways to get money--and forces them to uncover a viable strategy more quickly.
The second misconception is that patience is a virtue--that innovation entails large losses for sustained periods prior to reaping the huge upside that comes from disruptive technologies. Innovators should be patient about the new venture's size but impatient for profits. The mandate to be profitable forces the venture to zero in on a valid strategy. But when new ventures are forced to get big fast, they end up placing huge bets at a time when the right strategy simply cannot be known. In particular, they tend to target large, obvious, existing markets--and this condemns them to failure. Most of today's envisioned business opportunities for wireless Internet access, for example, involve big applications such as stock-trading and multiplayer gaming that have already found homes on wired, desktop computers. Billions are being sunk into new wireless ventures committed to taking over these markets before innovators have a chance to learn what applications wireless is really best at delivering.
Resources such as technology, cash and technical talent tend to be flexible, in that they can be used for a wide array of purposes. Processes, however--the central element in our second question--are typically inflexible. Their purpose is not to adapt quickly but to get the same job done reliably, again and again. The fact that a process facilitates certain tasks means that it will not work well for very different tasks. Failure is frequently rooted in the forced use of habitual but inappropriate processes for doing market research, strategic planning and budgeting.
Sony, for example, was history's most successful disruptor. Between 1950 and 1980 it introduced 12 bona fide disruptive technologies that created exciting new markets and ultimately dethroned industry leaders--everything from radios and televisions to VCRs and the Walkman. Between 1980 and 1997, however, the company did not introduce a single disruptive innovation. Sony continued to produce sustaining innovations in its product businesses, of course. But even the new businesses that it created with its PlayStation and Vaio notebook computer were great but late entries into already established markets.
What drove Sony's shift from a disruptive to a sustaining innovation strategy? Prior to 1980, all new product launch decisions were made by cofounder Akio Morita and a trusted team of associates. They never did market research, believing that if markets did not exist they could not be analyzed. Their process for assessing new opportunities relied on personal intuition. In the 1980s Morita withdrew from active management in order to be more involved in Japanese politics. The company consequently began hiring marketing and product-planning professionals who brought with them data-intensive, analytical processes of doing market research. Those processes were very good at uncovering unmet customer needs in existing product markets. But making the intuitive bets required to launch disruptive businesses became impossible.
A company's values--the focus of question three--determine the necessity of spinning out separate organizations for new ventures. Values are even less flexible than resources. Everyone in an organization--executives to sales force--must put a premium on the type of business that helps the company make money given its existing cost structure. If a new venture doesn't target order sizes, price points and margins that are more attractive than other opportunities on the organization's plate, it won't get priority resources; it will languish and ultimately fail.
Nor is it just the values of the innovating company that matter, because suppliers and distributors have values too, and they must put the highest priorities on opportunities that help them make money. This is why, with almost no exceptions, disruptive innovations take root in free-standing value networks--with new sales forces, distributors and retailing channels.
Disrupt Competitors, Not Customers
The fourth factor in successful innovation is minimizing the need for customers to reorder their lives. If an innovation helps customers do things they are already trying to do more simply and conveniently, it has a higher probability of success. If it makes it easier for customers to do something they weren't trying to do anyway, it will fail. Put differently, innovators should try to disrupt their competitors, never their customers.
The best way to understand what customers are actually trying to do, as opposed to what they say they want to do, is to watch them. For example, when interviewed by the college textbook industry, students say they would welcome the ability to probe more deeply into topics of interest that textbooks just touch on. In response, publishers have invested substantial sums to make richer information available on CDs and Web sites. But few students actually use these innovations, and little growth has resulted. Why? Because what most students really are trying to do is avoid reading textbooks at all. They say they would like to delve more deeply into their subjects. But what they really do is put off reading until the last possible minute--and then cram.
To make it simpler and more convenient for students to do what they already are trying to do, a publisher could create an online facility called Cramming.com. Like all disruptive technologies, it would take root in a low-end market: the least conscientious students. Semester after semester, Cramming.com would then improve as a new "cramming-aid" growth business, without affecting textbook sales. Conscientious students would continue to purchase textbooks. At some point, however, learning the material online would be so much easier and less expensive that, tier by tier, students would stop buying texts. This path of innovation has a much higher chance of success than a direct assault that pits digital texts against conventional textbooks.
The observed probabilities of success in innovation are low. But these statistics stem from the sum of sustaining and disruptive strategies, many of which are attempted in organizations whose resources, processes and values render them incapable of succeeding. Many innovators draw lessons from observing other successful companies in very different circumstances and attempt to succeed with just one or a few links in a chain of interdependent values. And many fail after assuming that what customers say they want to do is what they actually would do.
Hence, the observed probabilities of success don't necessarily reflect what the true likelihood of success can be, if the critical variables in the complex and dynamic process of innovation are understood and managed effectively. Indeed, success may not be as difficult to achieve as it has seemed.
Harvard Business School professor Clayton M. Christensen, a former Rhodes scholar and successful entrepreneur, specializes in the management of technological innovation.
Rules of Marketing? The best quality product to market first IS the most innovative, but that doesn't mean it will sell.
"And we have seen and do testify that the Father sent the Son to be the Savior of the World"
1 John 4:14
This is something that's irked me for a while, since I switched over to the Dvorak keyboard layout (see sig for link to more info). The Dvorak layout is more efficient for typing English text than the standard Qwerty layout, but never succeeded due to market inertia.
Read my keyboard review.
Best quality + first to market almost never means success. Inferior but good enough, introduced when people are used to the idea almost always wins.
The strongest insight in the article - and the best supported - is that well-managed companies that take care of their existing customers well are often not innovative, because processes and methods that are profitable are unlikely to be challenged, and because truly outre and novel ideas are too disruptive to be welcomed. The notion that innovation occurs in the context of and also creates disruption is a reasonable one. The rest of the article is questionable: his observations that lean projects are more adaptive than ones that have deep pockets which let them stick with a 'a bad strategy' begs the question of what a bad strategy is. It's the Right Thing To Say in a post-boom age (profits now! no vapor!) - but it omits the many successes that came of plodding along after initial disappointments. And, as soon as he used the word "leveraging" I know his article had run out of ideas.
Microsoft tends to solve problems by throwing money at them, but if this article is correct, that is a flawed strategy. The excess cash allows them to keep a flawed product on the shelves (e.g. XBox) long past the point where a poorer company would be focusing on improving the product to make it match the customers needs.
Food for thought, anyway.
--
I have taken more out of alcohol than alcohol has taken out of me - Churchill
This is the concept Christensen is famous for (and there is a book titled after it which you should all read) Here's my 10 second synopsis of Innovator's Dilemma:
Your old customers are demanding you spend all your resources on your old technology (eg. 5 1/4 inch disk drives) But there are new potential customers who want to buy new technology you haven't developed yet (eg. 3 1/2 inch disk drives) There are more potential new customers than old customers, and thus more profits in devoting your resources to new technology. But you already have your old customers, and you're supposed to *listen to your customers* So there's the dilemma.
Solution to the dilemma? Sometimes it doesn't pay to listen to your customers. And that's a tough pill for an established company to swallow, since that's how they made money in the first place.
Websurfing done right! StumbleUpon
1. You do not talk about Innovation
2. If you do talk about Innovation you must be Microsoft.
3. If you are not Microsoft you DO NOT INNOVATE
4. Bring lawyers too.
But I must quibble with a few points. I suppose he knows more about it than I, but does all innovation in a given field necessarily take place on the low end? What about new products that may or may not be higher-end than existing products? (Example: The runaway popularity of SUVs, which are certainly NOT low-end impulse purchases, and newer models of SUVs seem to subscribe to the Micro$oft bloatware model: more, more, more [useless] features and a higher and higher price tag. But people sure buy 'em.)
Secondly, I'm not sure his hypothesis works for all his examples. I'm pretty sure, for instance, that Wal-Mart got where it is by a combination of unscrupulous business tactics and leverage, NOT just by providing the lowest cost per item. I've heard that Wal-Mart pressures its suppliers into giving it the lowest possible price, and generally creates "race to the bottom" conditions wherever it goes.
Third and least important quibble: Fergodssakes, man, if you've got something to say, write it so it's actually readable! "Creative creation"?! I've heard MUCH better phrases for that concept (including "wealth creation"), that DON'T leave one wishing one's office had a shower cubicle. "Leveraging"?! Pleeeease... Is it just me, or are all biz-school types these days just far too in love with the euphony of buzzwordiness?
Nevertheless, I'm going to forward this one on to my entrepreneurial boss. Let him take the advice...and the shower.
?!
I'm not a geek, I'm just a clever script.
A comment that will knock the socks
Off any statement of FortKnox
?
sulli
RTFJ.
If the transition costs you impose on your customers is too high they'll run for the door screaming. It doesn't matter how wonderful your technology is. That's why DIVX and HDTV are dead or dyeing for example. You can't make it so hard to use or purchase or install that only primary adopters use it.
cough cough hack linux cough bsd
That's the lesson of desktop linux - it doesn't matter HOW BAD MS is - what matters is HOW HARD the transition to something else is.
Slightly off-topic -- but...
Did anyone else notice that the "500 mL" printed on the beaker (at the right of the page) seems to be backwards?
Even though Linux has set back the state of computing by 10 years reimplementing what's already in FreeBSD and reimplementing it badly, witness the VM and networking instabilities, can it be considered innovation because no one ever bothers to look under neath the hood and see little squirrels running in a wheel trying to pass off as a real Unix(tm) kernel?
It makes some obvious points, and others that are dead wrong.
The "integration" description attempts to acribe attributes of integration to Microsoft that were far more true of the competitors who lost and were buried due to marketing muscle. WordPerfect, PlanPerfect, WordPerfect Library, WordPerfect Office (email, scheduler, calendar, etc.), etc. were much better integrated early on, but that wasn't a very important facor in competing.
Gee, look Microsoft won. Their products are integrated, and the only ones we know enough about to talk intelligently. Let's compare them to the few scraps of the competitors that are still being hawked by their third-hand owner on the market today.
He seems to have figured it all out. But can anyone point to a resource that describes the author's own success in developing an innovative product/company? And I'd like to see something more substantial than an unknown consulting company or similar.
There's the academic world, then the real world...
A well written article. His main point is that contrary to the VC's thinking, you can analyze and predict success. However, he gives a powerful counterpoint aswell:
What drove Sony's shift from a disruptive to a sustaining innovation strategy? Prior to 1980, all new product launch decisions were made by cofounder Akio Morita and a trusted team of associates. They never did market research, believing that if markets did not exist they could not be analyzed. Their process for assessing new opportunities relied on personal intuition.
Soundblaster took over the market after it added 8-bit sound to Adlib's music synthesis capability.
Not blowing your lead is the hard part, and Microsoft's probably the only "first" still on top. And it wasn't really first at anything...
EG: "those who can, do. those who can't, teach."
Actually he said not integrating with competitors is what you are supposed to do, since doing so limits your innovation. This is the reason Microsoft was held up as an example -- they were free to put whatever they wanted into Word since they their format didn't play nicely with everyone else.
Dvorak failed because the mechanism it was designed for could not function properly.
/. aint really worth the effort.
The original type writer started with dvorak keyboards, actualy started with a lot of layouts, but the dvorak method caught on. But then they found out that people could type too fast, and the keys would get stuck. this would kill in aded efficience they were getting for switching to type write, which where very expensive, and there users required training.(sound familiar?)
so someone came up with the qwerty method bacause it slowed people down.
none of this applies to todays market, but training momentum has kept it going. what may finally begin qwerty's decent is the fact that I can change they layout of my keyboard through software.
The first CEO that demands there people learn Dvorak lay out will get a nice bonus from the increased productivity.
I would rather see people learn the dvorak method, then most coding 'techniques' that are implimented to imnprove code speed release, and usually don't
yes I know its probably Ironic that I typw something like this, and it will no doubt have typos, but
The Kruger Dunning explains most post on
Not that I think the there is a problem with the concept of helping students Cram for exams.
But the url www.cramming.com forwards you over to a pornographic website.
I don't think that this is the type of cramming he had in mind.
Open Source Identity Management: FreeIPA.org
A few years back, I worked for a small company that was developing a cell phone localization technology. We had a patent on one of the primary means of locating an unmodified phone (worked rather well too). The problem was that while we were developing the technology, we had to beat people over the head at the same time to make them see how valuable the idea was.
:)
Nowdays, the FCC and all the carriers are still trudging towards the goal of fully implementing E911 and we ended up having to sell out to a competitor having spent too many resources building the market. sigh.
Don't anthropomorphize computers, they don't like it.
jeez, how hard is it to put BOOK TITLE and link the book title instead of putting that huge-ass, ugly link next to it?!
...most notably Amazon. They're still the leader in user-friendliness among ecommerce sites, and always have been, right from the beginning. Not to mention other quality issues. And they were the first major ecommerce player.
IANAET (evolutionary theorist) so take these comments with care.
One element of the theory of punctuated evolution says that new species arise not by direct competition against their parent species, but by finding an isolated and protected niche where they can develop.
Say a new species of horse is to develop. A subpopulation becomes isolated and has a chance to develop new characteristics and to become reproductively distinct (no longer interbreeds with the parent species).
Then, when the geographical isolation ends, the new and parent species come into contact and competition. The new species spreads rapidly, having had a chance to strengthen in isolation.
This theory is designed in part to explain gaps in the fossil record. The small, original populaiton of the new species leaves few fossils - we only see them after explosive growth - so some intermediate forms are lost.
That sounds like the article's model of innovation succeeding by finding a niche market before improving the product to compete head on head in the general marketplace.
Wonder what other analogies exist with evolutionary theory and this article.
People with business-sense are good for business. If you have a good idea and doesn't have much sense for business, FOR GODS SAKE hire someone who do!
:-)
During the IT industry melt down the last couple of years it's quite clear that many of those companies are run by people who just isn't good at it. I mean, how unrealistic business-models haven't we seen and are still seeing? They are good at the technical bits but when it comes to business most don't have a clue of what they are doing.
The worst part is even if you DO handle your business in a responsible and long term viable way there are other who bastardize the market by doing stupid decisions, giving things away or something and ruin the whole market.
Infact, unrealistic business-models are demostrated here on slashdot from time to time
After reading the article, the one thing I want to do is hear from Akio Morita about why his intuitions were so often correct at Sony. Doesn't that put a lot of MBAs out of jobs?
Too bad cramming.com is already taken!
--Dave
Take his criteria for a successful disruptive technology. I can't help but observe that the light bulb, a successful innovation if ever there was one, satisfies neither. The answer to 1 is negative because neither the poor nor the wealthy were capable of lighting their homes with electricity at the time. Likewise the answer to 2 because there was no existing market. Yet this technology was undeniably disruptive; just ask the manufacturers of candles, oil lamps and gaslights.
Later on in discussing (as far as I could tell) allocation of resources, he says, "Processes, however--the central element in our second question--are typically inflexible. Their purpose is not to adapt quickly but to get the same job done reliably, again and again." He must be completely unfamiliar with the Software CMM (and now the CMMI for other disciplines) where to attain the highest rating and organization's processes must be flexible. Continuous improvement of processes is one of the more important lessons from the quality movement Prof. Christensen discusses in the opening of his article, so I'm a little surprised he chooses to ignore it here.
This leads me to suspect that some of his other examples are flawed too, but I don't know enough about all of them to detect it. I don't trust his conclusions, in any event.
And the brethren went away edified.
That's pretty good. I mean, you should actually make fun of me; I deserve it. But if you wanna go after him, perhaps:
A comment that sucks manly cocks
Just like that blowhard FortKnox
Or something.
This is drifting off-topic, but what the heck.
The first CEO that demands there people learn Dvorak lay out will get a nice bonus from the increased productivity.
Assuming you're talking about a software company, I could not disagree more. I think any difference in productivity would be small and it would be next to impossible to establish faster typing as the reason. (If you're not talking about a software firm, then you might possibly be right, and I have nothing to say.)
I think there are other things that contribute to software development productivity. Good and open communications between developers and a quick bug catching process that gets bugs fixed before they become panic-mode fixes... these two things by themselves would completely dwarf any productivity increases due to better typing.
The one place where I do believe that a mechanical skill would help productivity in a software firm is a twofold skill: touch-typing (either QWERTY or Dvorak), along with deep familiarity of a text editor. When I see some people poking away at their keyboards, it leads me to believe that my skill in the above two areas really does increase my productivity.
When I have sudden "what if?" flashes, it means I can bang out a quick test twice as fast as someone else, which means I can try twice as many different options. It also means that I don't mind taking the extra time required to format my code nicely, or even document it (gasp!), because for me, it's not that much extra time.
In the end, I believe it means I can produce either twice as much code, or in the same amount of time, I can produce code that's twice as good in quality.
Just MHO. Mostly off-topic. Moderate at will.
Accountability on the heads of the powerful.
Power in the hands of the accountable.
Your old customers are demanding you spend all your resources on your old technology (eg. 5 1/4 inch disk drives) But there are new potential customers who want to buy new technology you haven't developed yet (eg. 3 1/2 inch disk drives) There are more potential new customers than old customers, and thus more profits in devoting your resources to new technology. But you already have your old customers, and you're supposed to *listen to your customers* So there's the dilemma.
Sounds like Jobs must read Christensen, since he's all about dumping old technology for the new (e.g. floppy disk drives). He must just do s/distruptive new market/Next Big Thing/g... it does seem like Apple has become pretty good at keeping its existing markets safe while disrupting its competitors.
There are 10 types of people in this world, those who can count in binary and those who can't.
That aside, I think you summed up the business model that he's talking about pretty well. It's a good parallel.
Any sufficiently simple magic can be passed off as mere advanced technology.
The USA is awfully good at many things, but sometimes I think it's too good. As research into disruptive marketing improves, the big companies learn more and more about maintaining their control.
David Korten, in his book "When Corporations Rule the World" has pointed out that big corporations have made the feedback loop between innovation and corporate-control extremely small. In the old days, kids could get into a new style of music and it would be a genuine rebellion against the system. But MTV and all the big corporations can now take this subculture and re-market it to the population within months, and this time will shorten as time goes on. There is no chance for a genuine counter-culture anymore.
What's the underlying problem with a "formula for innovation"?
It's that the culture itself gets stuck inside of a Local Maxima. It takes genuine innovation - revolution, if you will - to prevent cultural stagnation.
I've lived in the USA for two years now, and I fear for this country's culture. This is why.
Well, there was incremental innovation in the whole SUV market that has changed what people drive. They used to be work trucks. Luxury SUVs are a relatively new thing, as are Mini-SUVs. (built on a car unibody chassis) People who would have bought a station wagon back in the 70's are now buying some sort of SUV's. The fact that a company like Land Rover was an early leader, but that the market is now dominated by the Big 3 sort of proves his point about how hard it is for a new or small company to break into a market using sustaining innovation.
Don't moderate flamebait as Troll. Know the difference or you will be Meta-moderated.
disrupting competitors, not customers
Okay, so what is the best way to disrupt your competitor? What, you say, build a better product? NO!!! Dammit! Hire lawyers! Lots of 'em for frivolous lawsuits. Why? It slows down the competition so a) you can keep a weak product on the market longer b) if you are damn lucky, you can kill their product.
I have worked for a lot of companies and have been surprised at the number of frivolous lawsuits that do PRECISELY that. I really don't consider that "competing" (which is what "competition" is about, right?). Isn't the point to build better products? Last I looked, lawyers really weren't considered to be a part of economic theory (but, hey, economic theory says monopolies provide the lowest priced goods - guess there are flaws in everything, eh?).
So, if we look at Microsoft, in essence they did EXACTLY what this guy says is successful. The question is, was it ethical or moral? And my grandfather could have made children work in coal mines for slave wages while he got rich, but noooooo, he had this damn ethical streak!!! So now instead of a billionaire, I'm a working stiff. Doesn't seem fair in the end does it?
Expect more folks to be following the Microsoft model [sigh]...
IANAL, but I've seen actors play them on TV
"Innovative" implies a deviation from the norm or average. While there is a greater variance of characteristics and genes within a larger population this variation also has a cancelling and regression to the norm effect. Rare variations by definition makes it unlikely that it will be shared by a mate.
In an isolated subpopulation, a rare characteristic in an individual will have an increased prevalence within the its own subpopulation and the norm for the subpopulation will not be the same as for the larger population. Then through generations this "mutant" gene may become even more prevalent, particularly if it was recessive and is over-represented in this new subpopulation--think inbreeding.
It cannot be known or concluded a priori that this new population will displace the other population.
How does this apply to the rest of the world (Europe to be more exact)? I have a theory that the American market will always prefer crap over quality if it is cheaper. Has anybody done a study on the cost of this "cheapness"? A WallMart chopper will buy a $10 toaster over a $25 one just because it is cheaper. That toaster will be "toast" within a year. Then they must go out and buy another one. And another... When is cheaper really cheaper? That's saying nothing about dealing with the costs of producing volumes and volumes of these cheap goods, dealing with the waste they generate, etc. It is costing YOU a buck or so in tax money to deal with the waste generated by each of this proverbial crappy toasters.
A "disruptive" technology is good in the sense it forces the established forces to adapt. On the other hand, it also creates goods and services that are not necessarily good enough and with it, the necessity to buy these things constantly. It's a chicken and the egg scenario. Is the "disruptive" technology answering the desires of new consumers or is it creating new consumers from nothing?
... about Dvorak vs. Qwerty, but have no idea if they're true:
- Dvorak is significantly better than Qwerty. But there are a number of other "improved" keyboards that are about the same amount better than Qwerty. So if you're an executive looking into paying to retrain, you look into the merits and find there is no clear choice.
(We hear a lot about Dvorak because it's the one that gets better press, and has some support in the computer community, more for historical reasons than its merits relative to other improved keyboard layouts. That, combined with the relative ease of remapping a computer keyboard {compared to a mechanical typewriter} might get it over this hump. A trivial graphic config tool in Gnome and Kde would give it a BIG push.)
- Qwerty wasn't deliberately designed to be slow. It was just the first layout that was built by that group of engineers. The deficiencies were quickly discoverd and they came up with a better layout. And management nixed it because of the retraining costs - the first such decision.
At the time there were less than ten trained typists.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
...but I'd be quite interested to see a writeup on whether these dynamics applied equally to the usage of various pieces of Free Software. Any ideas? I'm not sure it applies as well... for instance, I've seen some small and great text editors sprout up in the last few years, but I know quite a few people who love and will never give up GNU Emacs. =)
Paranoid
Bwaahahahahaa.
Isn't it safe to say, and to bet your business, that some people (ever over 35) want to be disrupted? And does Christensen actually know any of the students at MIT?
___
"with their freedom lost all virtue lose" - Milton
Previously I've attempted a description of the success of an Open Source product, Ant, in terms of the Innovator's Dilemma. I think the fit is very good, provided you recognize how the rewards and costs should be measured in the OSS environment. If you are interested it can be found at Ant as an Example of the Innovator's Dilemma. Now I'll have to go back and see how Ant matches against the guidelines in the article, so far it's looking pretty good.
development.lombardi.com
It cannot be known or concluded a priori that this new population will displace the other population.
If the environment changes in such a way that the subpopulation is better adapted...
The major point is actually not that you need to stop listening to your customers, it's that companies engaged in sustaining technologies cannot, if properly managed (!!), also engage in disruptive technologies. The solution is to not try to do both, but rather to spin-off the disruptive technology and let it find its path apart from the demands of the mother ship.
The one really notable exception to this rule was HP's LaserJet and InkJet businesses. The former was sustaining, the latter disruptive. The book says that HP nearly came apart trying to do both, but succeeded in spite of the odds. Certainly the exception that proves the rule.
The Innovator's Dilemma is highly worth a read!
If you read the story of building arsdigita, you will see the same, they went to market which MS would not even dare to touch - more profitable ventures, now they replicate ideas arsdigita has planted - application server, database web applications, enterprise level. Many others do too. There were reasons they could not grow geometrically - they were partly support company and hiring people that know what to do, was hard in those times, especially with brand new technology, that was deemed not too current, or cool, sort of grey technology, that has technical value, but now WOW value at the time.
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2c.
I'm afraid I don't buy that theory. It seems to say that evolutionary innovation only occurs in small, isolated groups. The fact is, the innovations the isolated group develop would be more likely to occur in the larger group where they would be quickly quashed by the vast majority.
Almost all changes will be debilitating instead of strengthening. The odds of making enough changes to go through a valley to a different peak are likely much better in a small isolated group, struggling to find an identity as which it can survive. In parallel, the large group will develop a pool of mostly recessive characteristics which may allow some of its members to survive an evolutionary crisis. In any event, you would most likely miss evolution in progress even if you were looking right at it.
Lady luck may help you win a lottery ticket, but she does not have the time to help you make your business a success.
IBM is successful not because of LUCK, but SAVVY MARKETING.
EXXON is successful not because of LUCK, but the KNOWING OF HOW THE OIL MARKET WORKS.
The airline industry is in trouble, not because they are LUCKLESS, but because the airline industry has remained STATIC for decades. In other words, the airline industry is failing because THEY CAN'T CATCH UP WITH THE WORLD.
America is successful not because of LUCK alone. America is successful because of the attitude of the American people - the people who will never take "No" for answer !
Luck may make a person PROUD, and pride begat failure.
In a sense, LUCK actually brings FAILURE.
Muchas Gracias, Señor Edward Snowden !
i didnt see any one post a link to purchase the book, Innovator's Dilemma. anyways, this is a great book and well worth the time spent to read.
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[insert funny
The SUV marketplace validates the "don't listen to your [current] customers" thesis rather well, really.
Go back 20 or 30 years. Instead of SUV, think "vehicle capable of handling rough terrain and bad weather." I was the typical customer for this kind of vehicle. I wanted it simple, sturdy, and easy to fix. I did not want an automatic transmission, power windows, power steering, or any other gewgaw that would add complexity or might break when I was out in the boonies. I didn't care about a smooth ride or plush seats, and I drove with the windows open (or top down) most of the time, so I didn't need air conditioning, and I wasn't picky about heat. I didn't need a lot of power as long as the gearing was right, so I didn't need a fire-breathing motor. In a 60s/70s context, I was happy with a ~200 CID straight six or a big 4 cylinder engine.
A Willys Jeep was just fine with me. An International Harvester Scout did the job. My younger brother, a photographer, often hauled a lot of gear (and he was a really big guy) so he got into the habit of buying used Suburbans or Carryalls from the (Arizona) highway department.
In other words, these 4X4 vehicles were sold, for the most part, either as working tools to ranchers and the highway department or to camping-type people like me. We got them because we often needed or wanted to go where there were no roads or drive through snow and ice. We wanted trucks. We liked trucks. We didn't care much about paint because it was going to get scraped off anyway.
There was also a racing/performance offroad subculture that spent megamoney on 4X4 vehicles. Again, no attention to luxury.
Fast forward. Jeep sold Wagoneers with car-style amenities, but the hard-cores didn't buy them. Subaru sold 4X4 little cars and station wagons, but only a limited number of them. Broncos and Blazers came a little closer to mass appeal, but were still trucks at heart, not all that different from your old Scout or CJ although they tended to have car-style (plastic) dashboards instead of real he-man ones.
If you had listened to the people who bought the old-style 4X4s, you would not have SUVs. It took a major market perception shift to bring the idea, "Hey, you can have the capability of a 4X4 in a car you usually only drive on the highway and sit in air conditioned, padded comfort even in crappy weather -- and you can now drop into 4 wheel drive without getting out and setting front hubs," onto dealer showroom floors.
I own a middle-aged Jeep Cherokee. It's not a hard-core old-style 4X4 truck, but still has no power windows and crappy air conditioning (in Florida), and I'm okay with that. I like my Cherokee, and that's a problem for the car makers. I am not a good SUV customer, because one important piece of the old 4X4 truck guy ethos is that old trucks are better than new ones, and once you get one you like you only get rid of it if you can't get parts for it any more or some moron runs into it and totals it.
There's an old guy near me who has a late 50s Willys pickup for himself, and a CJ for his wife. They're not restored, just maintained well. Not show condition -- blanket instead of seat cover in the pickup -- but decent.
Hell, listen to that guy and you'd never make an SUV with a stereo (those who wanted stereos would install their own) or any other kind of amenity, and "soccer moms" would not be running around in those grossly huge Ford Expeditions, let alone something as silly (by old truck guy standards) as a 4X4 Cadillac or Lincoln.
- Robin
Think CAFE: Corporate Average Fuel Economy.
Basically, the car manufacturers realized they couldn't keep producing full-size station wagons and still meet CAFE standards. But since "light trucks" not only have a less stringent standard, but also are counted separately from their cars, they could replace full-size wagons in their lines with SUV's and mini-vans instead.
Nope, no sig
Any sufficiently simple magic can be passed off as mere advanced technology.