Why Established Businesses Screw Up

from the that's-how-we're-taught dept

I’ve been a longtime fan of Clayton Christensen’s work and recommend it to plenty of people – though, it seems like many people misinterpret his writings. Still, he’s now come out with a new book, The Innovator’s Solution, which tries to follow the work of his original book describing why successful companies miss out on disruptive technologies. Fast Company is running an article summarizing Christensen’s thoughts on why successful companies screw up, and how to prevent that from happening. He comes down especially hard on business school teachings (despite the fact that he teaches at a business school), saying that they’re so focused on case studies of successful businesses, it creates managers who believe if they just mimic success stories, everything will turn out fine. While I agree with almost every one of his business points, I’m not sure I completely agree with this one. It seems that most business schools these days claim to be believers in Christensen’s ideas – but they just do an awful job teaching them. People end up with the 30 second version of his ideas and miss the real meat. Still, the Fast Company piece does a pretty good job summarizing the overall thesis that basing plans on past data can be dangerous, since it ignores future innovations. Also, he points out that successful companies are drawn to higher end offerings where the margins increase, forgetting that they’re opening up the bottom of the market for newer, more innovative and nimble suppliers to attack. In fact, Christensen has decided to put his money where his mouth is, and has started his own consulting firm that is designed to hit back against the McKinsey’s and BCG’s of the world by offering a much lower pricepoint for services.

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