Tag Archives: Clayton Christensen

Three Business Book Debuts on Best-Seller List

Three new business books debuted on the best-seller list published in the Wall Street Journal (October 15-16, 2016, p. C14).

These are

# 1 Love Your Life, Not Theirs by Rachel Cruze (Ramsey Press)

# 3 Get What’s Yours for Medicare by Phillip Moeller (Simon & Schuster)

# 6 Competing Against Luck by Clayton Christensen (Harper)

Please note how astonishing it is that a book would catapult to the # 1 spot on the list as a debut.  I am not sure that I have seen that before.

We are doing the Christensen book at the November First Friday Book Synopsis, but will give strong consideration to these other books for presentation in other months, as we continue to monitor their standing on business best-seller lists.

 

Christensen Featured in Interview about Marketing Theory

At the November First Friday Book Synopsis, Randy Mayeux will present Competing christensenbookcoverAgainst Luck: The Story of Innovation and Customer Choice, (New York:  Harper, 2016)written by Clayton Christensen as the lead author, along with three others (Taddy Hall, Karen Dillon, and David S. Duncan).

The book focuses on marketing and consumer behavior.  It is in the top 10 in three different business categories, according to the best-seller list published by Amazon.com.

christensenpictureChristensen argues that when companies develop and produce products, they are successful only when they understand what triggers customer choices.  His theory about consumers is based upon the assumption that we actually “hire” goods and services to perform certain jobs for us.

This assumption is the subject of an extensive Wall Street Journal interview by Alexandra Wolfe published on October 1-2 (p. C17).

You can read the interview by clicking HERE.

 

 

The “Innovator’s Dilemma” Applies To Management, As Well As Technology – Insight From Alan Murray (WSJ)

Here is some terrific, and challenging, insight from Alan Murray from the Wall Street Journal:  The End of Management: Corporate bureaucracy is becoming obsolete. Why managers should act like venture capitalists. The entire article is definitely worth reading.  Here are key excerpts:

“Modern” management is nearing its existential moment.

When I asked members of The Wall Street Journal’s CEO Council, a group of chief executives who meet each year to deliberate on issues of public interest, to name the most influential business book they had read, many cited Clayton Christensen’s “The Innovator’s Dilemma.” That book documents how market-leading companies have missed game-changing transformations in industry after industry—computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)—not because of “bad” management, but because they followed the dictates of “good” management. They listened closely to their customers. They carefully studied market trends. They allocated capital to the innovations that promised the largest returns. And in the process, they missed disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products.

“The single biggest reason companies fail,” says Mr. Hamel, “is that they overinvest in what is, as opposed to what might be.”

The new model will have to instill in workers the kind of drive and creativity and innovative spirit more commonly found among entrepreneurs. It will have to push power and decision-making down the organization as much as possible, rather than leave it concentrated at the top. Traditional bureaucratic structures will have to be replaced with something more like ad-hoc teams of peers, who come together to tackle individual projects, and then disband.

Can the 20th-century corporation evolve into this new, 21st-century organization? It won’t be easy. The “innovator’s dilemma” applies to management, as well as technology. But the time has come to find out. The old methods won’t last much longer.

Innovation and Technological Breakthroughs make everything more affordable – well, almost everything; consider Health Care

Innovation and technology create game-changers.  And a true game-changer was the arrival of the CT scanning capability.  Slate.com’s The Big Money has a fascinating article I Wanna CT Scan Your Hand: How the Beatles created our soaring health care costs by Thomas Goetz.  (This is excerpted from the book The Decision Tree: Taking Control of Your Health in the New Era of Personalized Medicine by Thomas Goetz.

This article tells the story of the invention of the CT scanning machine, and the way that changed medicine – and the subsequent problem it created, that it did not save money, but added to costs – dramatically.

Here’s an excerpt:

In most industries, technology lowers costs by reducing the workload for an expert class. The steam engine reduced the demand for buggy-whip makers, the textile factory reduced the need for seamstresses, robot welders reduced the need for the human kind in auto plants. But here again, health care is the exception: Rather than taking experts out of the process, a CT scan ends up making more work for the expert class of radiologists. Diagnostic radiology is routinely among the highest-paid specialties in medicine, with a median salary of $361,000, according to a recent survey of specialties. And these salaries are increasing faster than they are for other M.D.s, driven by hospitals that are eager for more radiologists to perform more tests. That not only keeps prices high, it makes the prospects for lowering costs almost nonexistent.

Clayton Christensen, D.B.A., a professor at Harvard Business School and author of The Innovator’s Prescription, has cited this as one of the reasons health care is in such dire straits. “When you deploy the technology to commoditize the caregiver, to enable a lower-cost provider to do something that historically had required higher cost, then it actually takes cost out of the system,” he told the policy journal Health Affairs in 2007. But, he said, “when you bring technology to the experts to do more sophisticated things, in fact, it does bring a lot of cost into the system.” The result is a classic perversion of technology and economics.

So, the lesson is this:  some technology saves money, other technology adds costs.  In this case, adding costs has saved many, many lives, even if all of those scans are not necessary.  Let’s put it this way – if it were the life of your loved one, would you want the money spent on their CT scan?

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(Note:  You can read the interview conducted by Bob Morris with Clayton Christensen, quoted above, on our blog here).