One of the great irony of successful companies is how easily they can fail. New companies are founded to take advantage of some new technology. They become highly successful and but when the technology shifts, something new comes along, they are unable to adapt and fail. This is the innovator’s dilemma.
Then there are companies that manage to survive. For example, Kodak survived two platform shift, only til fail the third. IBM has survived over 100 years. What do successful companies do differently?
3. Source: (Christensen, 2000)
The Disruptive Innovation Theory
New organisation can use relatively simple,
convenient, low-cost innovations to create growth
and triumph over powerful incumbents
4. Source: (Christensen, 2000)
Organisations successfully tackle opportunities
When they have the resources to succeed,
when their processes facilitate what needs
to get done, and then their values allow them
to give adequate priority to that particular
opportunity in face of all other demands that
compete for the company’s resources
The RPV Theory
5. Founded in 1880 Noted for their
pioneering technology
“You press the button,
we do the rest”
By 1975 they had 90%
of film and 85% of
camera sales in US
6. Eastman pioneered dry plate technology when
others use wet plate
Introduced the Brownie camera in 1900
Used film rolls
Camera for $1, then sold films
The picture quality was inferior
to begin with, but consumers
loved the convenience
7. In 1935 Kodak introduced Kodachrome,
the first colour film
The picture quality was inferior
to begin with, but consumers
loved colours pictures
Initially available as 35 mm slides
14. Kodak
Kodak knew that digital cameras would take over
In 1981, a team inside Kodak assessed the threat
The report said:
* The quality is not there
* The device is too expensive
* Consumer’s desire for print cannot be replaced
Source: Decisive
15. Kodak
Culture
“suffered from the mentality of perfect products,
rather than the high-tech mindset of
make it, launch it, fix it.”
One company town
No criticism, changing leadership
Failed to capitalise on pharmaceutical assets
Source: Economist
16. Fuji
Plan: to squeeze as much money out of the film
business as possible, to prepare for the switch to
digital and to develop new business lines
Brutal reorganisation
Launched a line of cosmetics and sold it
Source: Economist
17. Fuji
Shaigetaka Komori, Fuji boss, spent around $9 billion on 40
companies since 2000
He slashed costs and jobs
In one 18-month stretch, Fuji booked more than ¥250 billion
($3.3 billion) in restructuring costs for depreciation and to
shed superfluous distributors, development labs, managers
and researchers
Source: Economist
18. Kodak’s Lack of Tripwire
The report said:
* The quality is not there
* Consumer’s desire for print cannot be replaced
* The device is too expensive
Source: DecisiveSource: Decisive
-> We will act when more than 10% of public is pleased with
digital images
-> We will act when more than 5% of public has some kind of
viewing system
19. Kodak’s Dilemma
“Wise businesspeople concluded that it was best not to hurry to
switch from making 70 cents on the dollar on film to maybe five
cents at most in digital.”
- Larry Matteson, former Kodak executive
Source: DecisiveSource: Economist
20. Van Halen’s Brown M&M
During their 1982 world tour the band demanded M&M back
stage but without the brown M&Ms
Source: Decisive
21.
22.
23.
24. Tripwire
The timing is not now - remember the adjacent possible, but the
time will come
Set a tripwire that will tell you when it is time to act
28. The Innovators Dilemma
Should we focus improving our products to
make them higher margin, with more
performance or look at this new technology that
is low performance with low margins?
29. The Innovators Dilemma
When disruptive technology makes it possible to
create products cheaper, should a company
stop making high-margin, high-end product for
their best customers, or use the disruptive
technology to make cheaper products that none
for their current customers are asking for at the
moment.
32. Firms that succeed in one generation of
innovation almost inevitable become
hamstrung by their own success and thus
doomed to lose out in the next wave of
innovation
Source: (Christensen, 2000)
The Innovators Dilemma means
37. Reason for Failure?
If you become wildly successful
because you do everything right,
you're doomed
38. Resources, Processes and Values Theory
Resources (what a firm has),
processes (how a firm does it´s work), and
values (what a firm wants to do)
collectively defines an organisation’s strengths
as well as weaknesses and blind spots
Source: (Christensen, 2000)
The RPV Theory
53. Source: Yang, Harvard
Traditional Concept of
Good Management
"The next Bill Gates will not build an operating
system. The next Larry Page or Sergey Brin won’t
make a search engine. And the next Mark Zuckerberg
won’t create a social network. If you are copying these
guys, you aren’t learning from them."
- Peter Thiel
54. “We listen to our best customers”
The Innovation Trap
55. “Our customer is asking for the
new product, but we don’t have it
and its to late the enter the market”
The Innovation Trap
56. “Our customer are starting to ask
for our new product.”
The Innovation Trap
57. It is very difficult for incumbent
companies to disrupt themselves, so
usually others will do it
61. “Markets that do not exist
cannot be analysed”
- Clayton Christensen
62. Adjacent Possible
...a kind of shadow future,
hovering on the edges of
the present state of things,
a map of all the ways in
which the present can
reinvent itself
Steven Johnson