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 / Fourth Quarter 2001 / Issue 25(originally published by Booz & Company)


Clayton M. Christensen, The Thought Leader Interview

Things like this facilitate the disruption of the high-end established institutions (in this case, a class of professionals), because they bring the diagnosis down to a pattern-recognition mode. This kind of biotechnology could enable massive disruptions in the health-care world, and these are the kind that will actually transform health care as you and I experience it. As it happens, we’ll have less expensive, more convenient, higher-quality health care — and we’ll consume more of it.

S+B: A book called The Innovator’s Dilemma raises the question, What’s the innovator’s solution? You make the case in the book for spin-outs, but I’m not sure that history shows big companies are all that good at spin-outs either. Could you share your thoughts on what is the innovator’s solution, and what your new book is going to be about.

CHRISTENSEN: I think I’ll call it The Innovator’s Solution. It’s going to have three pieces. One is the problem of how to manage the spin-outs. A lot of people who read The Innovator’s Dilemma for answers rather than understanding kind of got this one-size-fits-all sense that, “Anything that is different I need to spin out.” So, for example, Bank One spun out But if you think about it, online banking is a sustaining technology. It helps banks serve a segment of their existing customers more conveniently, and at much lower cost. There’s never a need to spin out sustaining technologies.

Another thing I’ve observed is how critical the role of the CEO is when a technology truly is disruptive. In looking back on companies that have successfully launched independent disruptive business units, the CEO always had a foot in both camps. Never have they succeeded when they spin something off in order to get it off the CEO’s agenda. The CEOs that did this had extraordinary personal self-confidence, and almost always they were the founders of the companies. Because it runs so counter to the logic of the current business model to do this stuff, it takes a lot of personal confidence. A lot of professional managers aren’t that secure.

S+B: How can they possibly know that the disruptive enterprise is worth the risk?

CHRISTENSEN: You’re right. In a large successful company where your power base as CEO isn’t all that secure, it’s hard for a CEO to pursue a truly disruptive strategy.

The last section of my new book focuses on the question, How do I know a high-potential growth market before it emerges? I think I’ve really got some good insight into this. It will be fun to get these ideas out, so people can use and react to them — surfacing new anomalies that these theories can’t yet explain. It’s the only way we can all keep learning.

Reprint No. 01408

Lawrence M. Fisher, [email protected], covered technology for the New York Times for 15 years and has written for dozens of other publications. Mr. Fisher, who is based in San Francisco, is a recipient of the Hearst Award for investigative journalism.
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