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Reading list

December 2010

Carrol Capital
Dean Andy Boynton

Reading list

Books and articles that matter

By Dean Andy Boynton

In this edition of Carroll Capital, I’m recommending a book so important that I’ve read it several times: The Innovator’s Solution: Creating and Sustaining Successful Growth (Harvard Business School Press, 2003) by Clayton M. Christensen and Michael E. Raynor. A New York Times and Wall Street Journal bestseller, The Innovator’s Solution is a sequel of sorts to Christensen’s 1997 The Innovator’s Dilemma (Harvard Business School Press), a classic that explores how and why well-managed companies that put too much emphasis on “sustaining innovations” such as keeping current customers happy often get left behind.

Christensen coined the term “disruptive innovation” in the mid-1990s to describe what was becoming an increasingly familiar phenomenon: a scrappy upstart introduces a no-frills product or service to a new population of consumers, targeting a large, lower-tier, less attractive market (at least by conventional measures). The “disruptors” offer easy, inexpensive access to something previously available only to upscale customers, and gain a foothold selling what is often an inferior-quality product. That positions them to improve the products, expand into new markets, and eventually crush incumbents.

The Innovator’s Solution abounds with examples of disruptive innovations in industries from mini-mills, to online payment systems, to discount airlines, to frozen pizza. It also offers some illustrations of what managers can learn from companies like Amazon and Southwest Air, and from the stalwart Procter & Gamble, which reinvented its brands by launching entirely new product lines like do-it-yourself teeth-whitening systems.

But the book is primarily a guide to large companies interested in launching “new-growth” businesses, and its overarching message is: become a disruptor, not a disruptee.

Disruptive strategies initially involve tradeoffs that most conventional managers and marketers avoid. They start small, and train energy and effort on convenience and low costs. Those that succeed, say the authors, are “impatient for profits but patient for growth.”

Christensen and Raynor’s insights apply not just to the private sector but also to higher education institutions, including the Carroll School. All of us, of course, should focus on sustaining innovations: serve our existing customers well and find ways of doing it better. But we should also consider disruptive innovations. That, after all, is where the big wins are.

Remote, virtual learning features many of the traits and tradeoffs of disruptive innovations. It is convenient, scalable, distributed. But it is also characterized by an absence of great conversations, which are the heart of learning at many universities. I think the power of social media may eventually eliminate this tradeoff. The school that figures out how to harness the power of remote computing to conduct great conversations in virtual space will be in a position to dramatically disrupt established management education.

We should follow Christensen and Raynor’s advice, seeking new and better ways of offering customers easier, less expensive opportunities; fine-tuning our innovations until the quality of learning can provide great conversations with all the scale and location and convenience that social media may offer, if not today, in the foreseeable future.

 

P.S. Those of you left wanting more after reading this book don’t have long to wait: Raynor’s new book, tentatively titled The Innovator’s Manifesto, which demonstrates the predictive power of disruption in shaping and picking winning innovations, is due out in May.

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