[JimAllard]

This week’s MOTM on driverless cars and the pace of innovation reminded me of a fabulous book: The Innovator’s Dilemma, by Clayton M. Christensen. Steve Jobs cited it as the book that most influenced his thinking.

It asks and answers the question: Why do great firms fail to adopt and adapt to new technologies? Common answers include: 1) companies get too big and bureaucratic; 2) leadership lacks vision; 3) big companies get stuck in their ways; 4) they lack expertise in the new technologies, etc.

The author argues that none of the standard explanations are correct. He shows, through a myriad of real-life examples, that the reason companies fail to innovate and adopt new technologies has to do with their values and value hierarchies.

He argues that the values that are suitable for growth and innovation in established technologies are not the values required for adopting and innovating in novel technologies. The “new” and the “established” require completely different value orientations. For example: 1) what counts as success? 2) is predictability a value? 3) where does the new technology fit in one’s value hierarchy? 4) is knowing one’s market and what the consumer wants a value or a disvalue?

Although the book is about business innovation, the lesson is fundamental; thus, I think it has applications in other areas, including personal endeavors.

We often hear artists, for example, talking about the need to “reinvent” themselves and “get back to their roots.” These sentiments reflect a need of successful artists to find the new, the fresh, the innovative, again, after having exhausted a certain artistic path. This is difficult for most artists, and, to my knowledge, no one really understands why. They treat creativity and innovation as something that they just mysteriously had at one time and now it’s gone. My bet is that the same kind of value-restructuring is what’s needed in such cases.

When an amateur musician, for example, gets a gig at a small club playing for a hundred people, this can represent a major success in the context of the artist’s value structure. But for an already established, famous musician, such a gig would feel like a failure. Yet, the theory goes, playing for the small audience is what allows a truly new, innovative work of art to find its audience — an audience that will not, in all likelihood, be the established artist’s current fan-base.

Such “small-time” successes are also what push the artist to try new things and experiment, based on feedback from playing in intimate settings, in front of different kinds of audiences, etc. This allows the innovator to inductively discover the future rather than trying to predict it. And this is what innovation requires, argues the author.

I also found the book interesting because of its inductive nature. It doesn’t just present the theory and then give examples that fit; it inductively derives the theory from the examples and actively searches for data that do not appear to agree with the theory.

The primary example used throughout the book is the development of computer hard-disk drives. For the technically-minded, this bit of computer history is fascinating in itself. There’s an abridged version for those who just want the conclusions, without all the data and analysis.

Highly recommended.

/sb

[IsaacLewis]

Re: Jim Allard’s post 100806 of 8/19/18

I love this book. It inspired me back in college, and I was pleased to learn that Steve Jobs used to recommend it to his executives.

I think the root cause of its greatness is that Christensen uses induction, as you say. He implicitly understands how to integrate. Many people seem hostile to his whole theory, maybe because they are hostile to the idea that you can identify principles for business success. (I.e. “business is too complicated to predict, the best you can do is try different things and hope you get lucky.”)

His theory received some lengthy public criticism a few years ago. He was accused of using “handpicked case studies.”

https://www.newyorker.com/magazine/2014/06/23/the-disruption-machine

Christensen then made a passionate rebuttal:

https://innovisio.blogspot.com/2014/09/clayton-christensen-responds-to-new.html

Since there was a lot of debate over methodology, I think the dispute is an interesting case study in applied epistemology.

/sb

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