When a disruptive innovation is launched, it changes the entire industry and every firm operating within in
This book argues that it is possible to predict which companies will win and which will lose in a specific situation—and provides a practical framework for doing so.
Most books on innovation—including Christensen’s previous two books—approached innovation from the inside-out, showing firms how they can create innovations inside their own companies. This book is written from an “outside-in” perspective, showing how executives, investors, and analysts can assess the impact of a new innovation on the firms they have a vested interest in.
Customer Reviews
Michael Porter of Innovation:
Just as Michael Porter is the authority on Strategy, Clayton Christensen has become the authority on Innovation. He has not only created a great business theory, he has created an institution that defines our modern understanding of disruptive innovation. The foundations of his business theory are unimpeachable and the illustrations of the theory across industries are appealing to professionals inside and outside the industry alike.
In this book, Christensen’s students expand on the theory first proposed in The Innovator’s Dilemma to create a framework that can predict whether an innovation might be disruptive (read. has potential to transform an entire industry or create a new one). The impact of understanding and applying this theory is large.
This book maintains the quality level I have come to expect of books published by HBS press, paralleled only by Harper Business. The illustrations in this book include the Telecommunications, Education, Aviation, Semiconductors and Health Care industries. The book dedicates a couple of chapters that are of international interest: Nonmarket Factors and Innovation Overseas. This whets the appetite but does not quench the thirst for more. In the US business environment where global influence is becoming more and more relevant for future growth, it would make sense for a next book in the series focusing entirely on the overseas perspective.
It is hard to pull off a quality job on part three of a sequel without rock-solid grounding. A keen student, I hope to see a lot more come out of Innosight and the institution of Innovation that is Clayton Christensen.
Seeing What’s Next:
This is certainly a worthwhile read. The concepts are a great mix of grounded theory and in depth information. There are no earth-shattering concepts, or get rich quick schemes, just sound strategy on how to analyze the industry leaders of the future. One concern that is not addressed is how to determine what will be a disruptive innovation and what will be a poor investment. He does encourage readers to look at nonconsumers, and create a product or service that this group would want to consume. However, I can’t help but think that behind every failed innovation is a person who thought they had this dialed in. For example, Christensen cites VOIP as likely for cooption by incumbents, and suggests that one way for start ups to prevail is to offer VOIP as a second line. I am in the telecom industry, and do not see this as a viable option. Even he admits that second lines have been in decline for years, but more than that, those that do have second lines are often the most technologically resistant consumers. They are still using dial up or resisting cell phones. The consumers who are likely to use VOIP do not want to add on a second line, they want to replace their landline. This in an example of the idea for disruption still remaining mysterious. However, for those of us whose job it is to navigate the changing environment, not come up with the idea, this book is a must read.
One Book Too Many:
Christensen’s two earlier books (”The Innovator’s Dilemma,” and “The Innovator’s Solution”) provided great new insights into business history and strategic thinking. “Seeing What’s Next” goes on to attempt to demonstrate implementation of these two books’ insights, unfortunately with less than total success.
Early in “Seeing What’s Next,” Christensen uses Dell Computer to illustrate the “Value Chain Evolution” theory’s golden rule: Integrate to improve what is “not good enough” (speed, customization, and convenience of PC ordering and acquisition), and outsource what is “more than good enough” (the PC computer’s architectural design) - certainly a potentially helpful insight.
“Seeing What’s Next” eventually moves on to examining several sectors and making predictions for the future. 1)Education: Christensen sees on-line services from the University of Phoenix (UOP) as an innovation that is likely to disrupt the higher-education market. However, even the UOP has had limited success with this innovation - the vast majority of its services are still provided via bricks-and-mortar classrooms. (Another major UOP problem is that increasing questions are aimed at its credibility - especially the strength of its instructors, and its very low graduation rate.) On the other hand, Christensen probably has it right in seeing community-colleges provide a much greater challenge to pupils currently “over-served” by higher-cost state universities. (This applies to businesses and the general public as well - the vast majority of “research” undertaken at major universities offers very little or no concrete value to society.)
Aviation is another sector examined. Here Christensen sees low-cost Southwest Airlines as in danger of being over-ridden by major airlines - certainly about as far from the ensuing reality as one could get. As for the semiconductor sector - Christensen sees overshot customers (eg. word-processor and spreadsheet users) as becoming vulnerable targets for less expensive/capable processors; again, however, this has been little sign of this. (Christensen’s “problem” may be failing to recognize that users want only one operating system/CPU, and that combination should be able to handle most/all existing PC applications. Regardless, it is also noteworthy that Andy Grove, an enthusiastic endorser of Christensen’s first two books, does not have an endorsement on this book’s back cover.
Healthcare: Christensen observes a “do-it-yourself” trend with home pregnancy tests and glucose monitors. However, both are small components of a relatively trivial healthcare market not likely to sustain major innovation. His third example - cheaper/easier angioplasty replacing cardiac surgery, is an unfortunate one because the latest findings are that angioplasty is not generally an acceptable substitute. Finally, Christensen is totally correct in concluding that many patients are overserved by M.D. providers vs. eg. nurse practitioners - unfortunately, legal constraints are not likely to relax soon in this area. (This also limits “off-shore” provision of X-ray readings, etc., though combining tourism with cheaper Asian healthcare may grow into a much greater market.)
Finally, “Seeing What’s Next” considers the wireless communication sector. VOIP is seen as a major challenge - not likely, in my opinion, due to users being physically tied to an on-line computer, and existing wireless providers already able to offer long-distance quite cheaply via national service plans and/or offerings of free calling on weekends and after 7 P.M. during weekdays.
Bottom Line: “Seeing What’s Next’s” greatest contribution is probably through demonstrating how difficult seeing into the future actually can be.
Inspired OnDisruption:
My eyes were opened when I read Clayton Christensen’s books on disruptive innovation.
In Seeing What’s Next, Christensen chastises Wall Street analysts for their inability to see beyond current trends. — I lived in that world for 10 years and he’s right.
Extrapolating future scenarios from current trends is a dangerous business and it seldom works for investors. And it fails miserably as a method for businesses to find the next big thing, which a lot managers try to do. A new framework for analyzing identifying tech trends is needed and Christensen’s theories on disruptive innovation are a great starting point, and an inspired way to think about innovation.
The book offers a framework for undertsanding and anticipating trends. This includes a recap of the theory of disruption and has a few chapters that serve as casebook examinations of industries facing disrption, including the telecom sector, higher education and aviation.
While not as strong a book as his earlier work, The Innovator’s Solution or the first breakthrough on disruption, The Innovator’s Dilemman, Seeing What’s Next is a more practical guide for managers. The reason: Christensen, a Harvard professor, allows his theory to evolve from his management consulting activities.
Valuable analysis - but does it really help us see what’s next?:
This is the third book in a series on innovation, with Christensen as the lead author. The three books develop theories around the concepts of disruptive and sustaining innovation, and how to apply strategies based on these concepts and an understanding of the markets into which innovations are directed.
The first book, The Innovator’s Dilemma, explains why established companies can often be successfully attacked by innovators introducing disruptive products, while The Innovator’s Solution develops an approach to launching disruptions. Seeing What’s Next changes focus somewhat to propose that the theories developed in the first two books can be used to analyse and predict industry change. In doing so, it also provides a useful summary of the theories put forward in the previous books and their application.
The analysis is undertaken essentially in the context of Porter’s ‘five forces’ (competitors, potential entrants, buyers, substitutes and suppliers) but with the added dimensions of the nature of the innovation (disruptive or ’sustaining’ - i.e. something that creates new markets or reshapes existing ones, or something that develops further on existing offerings) and the range of customers from ‘overshot’ (offered more than they really want) to ‘undershot’ (looking for more than they are offered) in terms of product characteristics.
It is a useful way of looking at markets - one that will keep analysts very occupied in collecting data and pondering alternative conclusions and strategies. The associated risk is that it appears to invite ‘paralysis by analysis’.
While the coverage of the book extends to other industries, including airlines, education and the health industry, the methodology is built primarily around various elements of the telecommunications and computer industries. I suspect that choice of the fashion or food industries would have led to a different perspective on the same questions - one in which the ideas put forward by Gladwell in The Tipping Point might provide more useful clues to competitive challenges to established companies.
How reliable the authors’ methodology is in actually predicting the future in a specific case is, of course, open to question, and it is not a question that the authors put to the test. Rather, they claim that the analytical process proposed will put both a potential attacker and a potential defendant into a better position to achieve their goals.
The three underlying theories round which the analysis in the book is built are
the disruptive innovation theory (briefly described above)
the resources, processes and values (RPV) theory, and
the value chain evolution theory (VCE).
The RPV theory argues that resources, processes and values define an incumbent’s strengths, but also its weaknesses and blind spots - it is not easy to operate outside a well established arena.
The VCE theory argues that integration gives greater control over interdependent factors but reduces flexibility. The theory provides a tool for judging whether the right decisions about what should and should not be integrated have been made in particular circumstances.
Part 1 of the book elaborates on these theories and their application, while Part 2 essentially consists of extended case studies of five industries (education, aviation, semiconductors, health care, telecommunications) and an examination of innovation overseas. Of these industries, I am most familiar with health care and, while I found the analysis interesting, it did not seem to me to come to grips with the central dynamics of the challenge of health care into the future.
