The Upside of Downturns

The Silver Lining: An Innovation Playbook for Uncertain Times

By Scott D. Anthony
Harvard Business Press, 2009,
220 pages

The concept of disruptive innovation, first proposed by Harvard Business School professor Clayton Christensen, continues to be a powerful one, with empirical evidence that it is a real phenomenon in the evolution of organizations. In The Silver Lining: An Innovation Playbook for Uncertain Times, consultant Scott Anthony, president of the consulting firm Innosight (which was cofounded by Christen­sen), suggests that the current economic disruption is a useful catalyst for corporate innovation and that there is indeed opportunity in adversity.

He begins by suggesting that, for the firms that make up the Dow Jones Industrial Average, the period 1999–2008 was just as disruptive as 1930–1939, although the causes of the two disturbances were vastly different. He suggests that the current interlude might be called the Great Disruption, and goes on to demonstrate that many firms were founded during downturns, and that difficult times like the present create numerous openings, if only one can frame the issues correctly. The author continues with a series of compact frameworks for pruning a firm’s innovation portfolio, identifying op­portunities, and conducting strategic experiments to see if they offer potential.

Although cost cutting remains essential, Anthony notes that it can create damaging unanticipated consequences if performed in the traditional, top-down way. To avoid this hazard, cost-cutting tactics such as the reduction of product features should be informed by the findings from disruptive innovation. Any firm can learn how to make key trade-offs, “tuning” its product and service offerings to customer needs segmented in new ways. These new categories take into account the objectives and contexts in which the products are used, as well as the barriers to their application. This kind of cost cutting can be con­ducted much more systemically than the top-down, slash-and-burn ap­proach, and it has the added benefit of engaging the energies of those on the ground.

The author’s perspective throughout the book is that of the disruptive innovator, and he stresses the application of qualitative assessments to innovation, rather than the familiar quantitative financial evaluations that can so easily stifle creativity and generate widespread gaming of a measurement system. To be a disruptor is to “learn to love the low end,” to focus on the customer rather than the elegance of one’s existing solutions — it is to concentrate on discovery rather than delivery. As the descriptor “playbook” suggests, The Silver Lining allows quicker access to the comprehensive frameworks presented last year in The Innovator’s Guide to Growth. (See “Books in Brief,” by David K. Hurst, s+b, Spring 2009.) If it helps managers pay attention to their peripheral vision and the op­portunities presented during these white-knuckled times, instead of fixating on cutting costs in their core business, then it will have done its job.

Reprint No. 09311