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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.
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.
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
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.
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.
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.