Most companies believe that the process of business creation is unpredictable. So few
have sought to study the process by which new businesses are created. In this exciting
new book, Clayton Christensen and Michael E Raynor point out that just because the
results of the innovation process look unpredictable, it does not imply that the innovation process cannot be understood. Managers can gain a lot by understanding the process by which new ideas are generated, screened and commercialized. This book is all about how to make innovation happen.
The process of screening ideas
Middle managers play a crucial role as they shepherd partially formed ideas into fully
fledged business plans in an effort to get the approval of senior management. It is the
middle managers who decide which ideas they will carry to upper management for
approval, and which ideas they will simply allow to languish.
Unfortunately, middle managers typically hesitate to support new product concepts
whose market is not assured. If a market fails to materialize, the company will have
wasted plenty of money. So middle managers support their proposals with credible data
on the size and growth potential of the markets that each idea targets. Such data typically
come from existing customers and markets for similar products that have been successful in the past.
Middle managers are well aware that if they back ideas that flop, their prospects for
promotion will suffer. Indeed, managers hesitate even to propose ideas that senior
managers are not likely to approve. Because if that happens, their reputation for good
judgment will get tarnished. Moreover, talented middle managers, keep moving to new
assignments to broaden their skills and experience. What this means, is that middle
managers who want to protect their reputation for delivering results will promote only
those new-growth ideas that will pay off within the time that they reside in that particular job.
The process of sorting through and packaging ideas into plans that can win funding, in
other words, shapes those ideas to resemble the ideas that were approved and became
successful in the past. Business proposals that target markets where demand might be
small, get rejected. Unfortunately, the exciting growth markets of tomorrow are small
today. So by playing it “safe”, managers kill potential blockbuster ideas.
Sustaining vs Disruptive innovation
In every market there is a rate of improvement that customers can utilize or absorb.
Customers in the highest or most demanding tiers may never be satisfied with the best
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