More on this book
Community
Kindle Notes & Highlights
Read between
March 6 - March 19, 2018
the firms creating new markets often forge capabilities that are closely attuned to the requirements of those markets and that later entrants find difficult to replicate.
Markets that do not exist cannot be analyzed: Suppliers and customers must discover them together.
The strategies and plans that managers formulate for confronting disruptive technological change, therefore, should be plans for learning and discovery
managers who believe they know a market’s future will plan and invest very differently from those who recognize the uncertainties of a developing market.
how to discover markets that do not yet exist.
The problem with this lopsided experience base is that when the same analytical and decision-making processes learned in the school of sustaining innovation are applied to enabling or disruptive technologies, the effect on the company can be paralyzing.
The HP project managers concede in retrospect that their most serious mistake in managing the Kittyhawk initiative was to act as if their forecasts about the market were right, rather than as if they were wrong.
Intel developed the original microprocessor under a contract development arrangement with a Japanese calculator manufacturer. When the project was over, Intel’s engineering team persuaded company executives to purchase the microprocessor patent from the calculator maker, which owned it under the terms of its contract with Intel. Intel had no explicit strategy for building a market for this new microprocessor; the company simply sold the chip to whoever seemed to be able to use it.
IBM’s choice of the Intel 8088 microprocessor as the “brain” of its new personal computer was viewed within Intel as a “small design win.”
Amid all the uncertainty surrounding disruptive technologies, managers can always count on one anchor: Experts’ forecasts will always be wrong.
It is simply impossible to predict with any useful degree of precision how disruptive products will be used or how large their markets will be.
the vast majority of successful new business ventures abandoned their original business strategies when they began implementing their initial plans and learned what would and would not work in the market.
Because failure is intrinsic to the process of finding new markets for disruptive technologies, the inability or unwillingness of individual managers to put their careers at risk acts as a powerful deterrent to the movement of established firms into the value networks created by those technologies.
Discovery-driven planning, which requires managers to identify the assumptions upon which their business plans or aspirations are based, 11 works well in addressing disruptive technologies.
the Kittyhawk team committed to components and a product architecture that made the product too expensive to be sold to the price-sensitive video game makers at the emerging low end of the market.
Some managers, faced with such uncertainty, prefer to wait until others have defined the market.
These typically inflexible processes are where many organizations’ most serious disabilities in coping with change reside.
Despite beliefs spawned by popular change-management and reengineering programs, processes are not nearly as flexible or “trainable” as are resources—and values are even less so.
The market research and planning processes that are appropriate for the launch of new products into existing markets simply aren’t capable of guiding a company into emerging, poorly defined markets.
As shown below, this is why managers need to create different teams, within which different processes to address new problems can be defined and refined.
But it was a sustaining technology to the company. Its customers wanted the product, and it strengthened the company’s integral business model. There was, therefore, no need to spin the project out into a completely different organization.
Managers whose organizations are confronting change must first determine that they have the resources required to succeed.
“Where is the market that would actually value a smaller, lower-capacity drive?”
“Where is the market that actually wants a mobile excavator that can only dig narrow trenches?”
If history is any guide, companies that keep disruptive technologies bottled up in their labs, working to improve them until they suit mainstream markets, will not be nearly as successful as firms that find markets that embrace the attributes of disruptive technologies as they initially stand.
Because established companies are so prone to push for high-performance, high-profit products and markets, they find it very difficult not to overload their first disruptive products with features and functionality.
by watching how customers use the product, not by listening to what they or the “experts” say they need.
“the market was not terribly dissatisfied with pork insulin. In fact, it was pretty happy with it.”
Novo’s convenient pens easily sustained a 30 percent price premium per unit of insulin.
I would watch carefully what customers do, not simply listen to what they say.
Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group.
They can’t be used in mainstream markets;
they will have the right answer to the wrong question.
But because the track records of experts predicting the nature and size of markets for disruptive technologies is very poor,
the smallness of 5.25-inch models made them unusable in large computers but very useful on the desktop.
they will discover how they might use the products at the same time as we discover it—just
The only useful information about the market will be what I create through expeditions into the market, through testing and probing, trial and error,
Historically, performance oversupply opens the door for simpler, less expensive, and more convenient—and
feature, function, and styling changes can be made quickly and at low cost.
I don’t want to spend my precious managerial energy constantly defending our existence to efficiency analysts in the mainstream.
One major reason for the difficulty of managing innovation is the complexity of managing the resource allocation process.
