The Innovator’s Solution: Creating and Sustaining Successful Growth
Clayton M. Christensen and Michael E. Raynor
Harvard Business Press (2003)
Note: I read and then reviewed this “business classic” when it was first published and recently re-read it. I am even more impressed now than I was then.
In a previous work, The Innovator’s Dilemma, Christensen examines why so many companies fail to remain competitive “when they confront certain types of market and technological change….the good companies — the kinds that many managers have admired for years and tried to emulate, the companies known for their abilities to innovate and execute….It is about well-managed companies that have their competitive antennae up, listen astutely to their customers….invest aggressively in new technologies, and yet they still lose market dominance.” According to Christensen, the innovator’s dilemma occurs when the logical, competent decisions of management which are critical to the success of their companies are also the reasons why they lose their positions of leadership. I wholly agree with Christensen that a given problem must first be fully understood before efforts to solve it are initiated. The challenge is even greater when the given problem poses a dilemma which (in essence) involves a paradox: Whatever has been essential to success can also cause failure. What to do?
In The Innovator’s Solution, Christensen and Raynor offer a wealth of strategies and tactics to solve such a dilemma, revealed by their rigorous research on hundreds of different companies. In their book, they summarize “a set of theories that can guide managers who need to grow new businesses with predictable success — to become disruptors rather than disruptees — and ultimately kill the well-run, established competitors.” More specifically, Christensen and Raynor suggest appropriate responses to situations such as these:
• When a disruptive foothold is needed which competitors “will be happy to ignore or be relieved to walk away from”
• When there are opportunities to help customers “get done more conveniently and inexpensively what they are already trying to get done”
• When a low-end disruption is feasible and a business model is therefore necessary “that can make attractive profits at the discount prices required to capture customers at the low end of the market”
• When determining the criteria for selecting members of a management team for a new venture
NOTE: Christensen and Raynor correctly suggest that among the most important criteria is sufficient prior experience with solving problems comparable with those the new venture seems certain to encounter.
• When disruption (and competing against non-consumption in particular) “requires a longer runway before a steep ascent is possible.”
Christensen and Raynor have no illusions whatsoever about the difficulties of creating and then sustaining successful growth, however “growth” may be defined and measured. Moreover, they observe “To our knowledge, no company has been able to build an engine of disruptive growth and keep it running and running.”
For many decision-makers who read The Innovator’s Solution, I think it will prove be the most valuable business book they ever read. Why? Because it will guide and inform their efforts with associates to design, activate, and then maintain “a well-functioning disruptive growth engine.” Even then, they must keep it mind that no such mechanism will keep “running and running” forever. Improvisation and adaptability are imperative. Eventually, a new “engine” will be required but at least they will possess the knowledge and experience needed to produce another one.