Friday, June 27, 2008

Remarks on The Innovator's Solution

I read the modern classic The Innovator's Solution by Clayton Christensen and Michael Raynor. The authors build a theory of how companies that are leaders in their domains are disrupted by smaller, upstart competitors. The successful smaller competitors start by stealing the leaders' least attractive customers and work their way up market. The authors present numerous cases of how this has been a recurring pattern, and show that managers of the industry leaders are acting rationally by failing to challenge the upstarts immediately. Christensen and Raynor go on to say that large companies need to continuously innovate to capture the low end segment of their markets in order to preempt challengers and create new markets for growth.

The prose is difficult to read sometimes. Christensen and Raynor aren't the most elegant writers. When they describe how to identify products for development they get into design territory, and that's not their specialty. They talk about providing solutions for customers' "jobs" rather than basing product decisions on market segments. That's correct, as far as it goes, but the "jobs" language required me to make an almost constant mental translation into terms that are more familiar to designers. When designing, you do so based on the end users' goals instead of their tasks. Look at Alan Cooper's great discussion of users' personal and practical goals in his book The Inmates are Running the Asylum. Tom Kelley has a great discussion of the importance of observation in identifying consumers unstated, unmet needs and designing to meet those needs in The Art of Innovation. Christensen and Raynor are trying to cover the same ground but using their own invented terminology.

That quibbling aside, this is a good book. It presents great ideas for upstart companies that want to challenge industry leaders, and ideas for industry leaders about what they need to do to maintain their position. Recommended.

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