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An organization's capabilities reside in two places. The first is in its processes--the methods by which people have learned to transform inputs of labor, energy, materials, information, cash, and technology into outputs of higher value. The second is in the organization's values, which are the criteria that managers and employees in the organization use when making prioritization decisions. People are quite flexible, in that they can be tr..
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Clayton M. Christensen |
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managers may think they control the flow of resources in their firms, in the end it is really customers and investors who dictate how money will be spent because companies with investment patterns that don't satisfy their customers and investors don't survive.
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Clayton M. Christensen |
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The most vexing managerial aspect of this problem of asymmetry, where the easiest path to growth and profit is up, and the most deadly attacks come from below, is that "good" management--working harder and smarter and being more visionary--doesn't solve the problem. The resource allocation process involves thousands of decisions, some subtle and some explicit, made every day by hundreds of people, about how their time and the company's mone..
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Clayton M. Christensen |
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innovator's dilemma: Should we invest to protect the least profitable end of our business, so that we can retain our least loyal, most price-sensitive customers? Or should we invest to strengthen our position in the most profitable tiers of our business, with customers who reward us with premium prices for better products?
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Clayton M. Christensen |
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A product becomes a commodity within a specific market segment when the repeated changes in the basis of competition, as described above, completely play themselves out, that is, when market needs on each attribute or dimension of performance have been fully satisfied by more than one available product. The
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Clayton M. Christensen |
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Hence, because flash cards are being used in markets completely different from those Quantum and Seagate typically engage--palmtop computers, electronic clipboards, cash registers, electronic cameras, and so on--the value network framework would predict that firms similar to Quantum and Seagate are not likely to build market-leading positions in flash memory. This
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Clayton M. Christensen |
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Often even more perplexing, however, is when these problems arise within the mind of the same person: when the right decision for the long term makes no sense for the short term;
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Clayton M. Christensen |
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But this book is not about companies with such weaknesses: It is about well-managed companies that have their competitive antennae up, listen astutely to their customers, invest aggressively in new technologies, and yet still lose market dominance.
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Clayton M. Christensen |
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The fear of cannibalizing sales of existing products is often cited as a reason why established firms delay the introduction of new technologies.
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Clayton M. Christensen |
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These are what Herzberg's research calls motivators. Motivation factors include challenging work, recognition, responsibility, and personal growth.
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Clayton M. Christensen |
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It is hard to overestimate the power of these motivators--the feelings of accomplishment and of learning, of being a key player on a team that is achieving something meaningful.
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Clayton M. Christensen |
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We should always remember that beyond a certain point, hygiene factors such as money, status, compensation, and job security are much more a by-product of being happy with a job rather than the cause of it.
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Clayton M. Christensen |
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The trap many people fall into is to allocate their time to whoever screams loudest, and their talent to whatever offers them the fastest reward. That's a dangerous way to build a strategy.
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Clayton M. Christensen |
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When the organization's capabilities reside primarily in its people, changing capabilities to address the new problems is relatively simple. But when the capabilities have come to reside in processes and values, and especially when they have become embedded in culture, change can be extraordinarily difficult.
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Clayton M. Christensen |
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To measure market needs, I would watch carefully what customers do, not simply listen to what they say. Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group. Thus, observations indicate that auto users today require a minimum cruising range (that is, the distance that can be driven without refueling) of about 125 to 150 miles; most electric vehicle..
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science
innovation
technology
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Clayton M Christensen |
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In sustaining circumstances--when the race entails making better products that can be sold for more money to attractive customers--we found that incumbents almost always prevail. In disruptive circumstances--when the challenge is to commercialize a simpler, more convenient product that sells for less money and appeals to a new or unattractive customer set--the entrants are likely to beat the incumbents.
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Clayton M. Christensen |
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remember that it is changes in the slope of the platform, not the level of the platform, that create shareholder value at an above-average rate.
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Clayton M. Christensen |
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In the instances studied in this book, established firms confronted with disruptive technology typically viewed their primary development challenge as a technological one: to improve the disruptive technology enough that it suits known markets. In contrast, the firms that were most successful in commercializing a disruptive technology were those framing their primary development challenge as a marketing one: to build or find a market where ..
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Clayton M. Christensen |
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As successful companies mature, employees gradually come to assume that the priorities they have learned to accept, and the ways of doing things and methods of making decisions that they have employed so successfully, are the right way to work. Once members of the organization begin to adopt ways of working and criteria for making decisions by assumption, rather than by conscious decision, then those processes and values come to constitute ..
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Clayton M. Christensen |
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In fact, the prospects for growth and improved profitability in upmarket value networks often appear to be so much more attractive than the prospect of staying within the current value network, that it is not unusual to see well-managed companies leaving (or becoming uncompetitive with) their original customers as they search for customers at higher price points.
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Clayton M. Christensen |
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They are always motivated to go up-market, and almost never motivated to defend the new or low-end markets that the disruptors find attractive. We call this phenomenon asymmetric motivation. It is the core of the innovator's dilemma, and the beginning of the innovator's solution.
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Clayton M. Christensen |
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Predictable marketing requires an understanding of the circumstances in which customers buy or use things. Specifically, customers--people and companies--have "jobs" that arise regularly and need to get done. When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can "hire" to get the job done."
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Clayton M. Christensen |
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Core competence, as it is used by many managers, is a dangerously inward-looking notion. Competitiveness is far more about doing what customers value than doing what you think you're good at. And staying competitive as the basis of competition shifts necessarily requires a willingness and ability to learn new things rather than clinging hopefully to the sources of past glory. The challenge for incumbent companies is to rebuild their ships w..
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Clayton M. Christensen |
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The functional, emotional, and social dimensions of the jobs that customers need to get done constitute the circumstances in which they buy. In other words, the jobs that customers are trying to get done or the outcomes that they are trying to achieve constitute a circumstance-based categorization of markets.3 Companies that target their products at the circumstances in which customers find themselves, rather than at the customers themselve..
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Clayton M. Christensen |
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a jobs-to-be-done lens can help innovators come to market with an initial product that is much closer to what customers ultimately will discover that they value. The way to get as close as possible to this target is to develop hypotheses by carefully observing what people seem to be trying to achieve for themselves, and then to ask them about it.9
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Clayton M. Christensen |
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A new-market disruption is an innovation that enables a larger population of people who previously lacked the money or skill now to begin buying and using a product and doing the job for themselves.
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Clayton M. Christensen |
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Just Because You Have Feathers ...
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Clayton M. Christensen |
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the deliberate strategy process often becomes a subsequent impediment to a company's efforts to launch new waves of successful disruptive growth. This happens in two ways. First, the filters in the resource allocation process of successful companies become so well attuned to the successful strategy that they filter out all but the initiatives that sustain the existing business--causing them to ignore the disruptive innovations that create t..
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Clayton M. Christensen |
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Planning Your Courses at the Schools of Experience If you think about McCall's theory, going through the right courses in the schools of experience can help people in all kinds of situations increase the likelihood of success. One of the CEOs I have most admired, Nolan Archibald, has spoken to my students on this theory. Archibald has had a stellar career, including having been the youngest-ever CEO of a Fortune 500 company--Black & Decker...
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Clayton M. Christensen |
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On one side of the equation, there are the elements of work that, if not done right, will cause us to be dissatisfied. These are called hygiene factors. Hygiene factors are things like status, compensation, job security, work conditions, company policies, and supervisory practices.
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Clayton M. Christensen |
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The Indivo system resolves the Problem of Mutual Accommodation of Interdependent Systems summarized earlier by inserting a layer of virtualization between two interdependent structures. It makes the data open, modular, and conformable, so that the applications using the data can be optimized. By being modular (open source), the data in PHRs are commoditized--it is no longer a strategic asset, nor where money can be made. Instead, profit in ..
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Clayton M. Christensen |
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Competitiveness is far more about doing what customers value than doing what you think you're good at.
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Clayton M. Christensen |
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In reality, spinning out is an appropriate step only when confronting disruptive innovation.
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Clayton M. Christensen |
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But differentiation loses its meaning when the features and functionality have exceeded what the market demands.
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Clayton M. Christensen |
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Helping me feel like a good dad is not a Job to Be Done. It's important to me, but it's not going to trigger me to pull one product over another into my life. The concept is too abstract. A company couldn't create a product or service to help me feel like a good dad without knowing the particular circumstances in which I'm trying to achieve that. The jobs I am hiring for are those that help me overcome the obstacles that get in the way of m..
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Clayton M. Christensen |
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Because Aristotle's was the accepted lens on the universe, centuries of medieval scientists and thinkers went to great lengths to make epicycles work. It wasn't until the sixteenth century, with one simple but profound observation, that Renaissance astronomer Nicolaus Copernicus reframed our view of the universe. The planets revolved not around the earth, but around the sun. Finally, understanding that provided a foundation for some of the ..
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Clayton M. Christensen |
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Making that possible involved creating relationships with several partners who helped Medtronic accomplish customers' jobs. "Through the assessment of Healthy Heart for All, Medtronic understood the need for partners in different stages of the patient care pathway who can be a strong support in removing the barriers to treatment access," says Dasgupta. "In this case, partners with capabilities in financing, administration of loans, screenin..
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Clayton M. Christensen |
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That realization helped Moesta and his team begin to understand the struggle these potential home buyers faced. "I went in thinking we were in the business of new home construction," recalls Moesta. "But I realized we were instead in the business of moving lives." With this understanding of the Job to Be Done, dozens of small, but important, changes were made to the offering. For example, the architect managed to create space in the units f..
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Clayton M. Christensen |
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Walkman cassette player was temporarily put on hold when market research indicated that consumers would never buy a tape player that didn't have the capacity to record and that customers would be irritated by the use of earphones. But Morita ignored his marketing department's warning, trusting his own gut instead. The Walkman went on to sell over 330 million units and created a worldwide culture of personal music devices.
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Clayton M. Christensen |
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Harvard Business School alum Rick Krieger and some partners decided to start QuickMedx, the forerunner of CVS MinuteClinics, after Krieger spent a frustrating few hours waiting in an emergency room for his son to get a strep-throat test. CVS MinuteClinic can see walk-in patients instantly and nurse practitioners can prescribe medicines for routine ailments, such as conjunctivitis, ear infections, and strep throat. Because most people don't ..
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Clayton M. Christensen |
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What are the important, unsatisfied jobs in your own life, and in the lives of those closest to you? Flesh out the circumstances of these jobs, and the functional, emotional, and social dimensions of the progress you are trying to make--what innovation opportunities do these suggest? If you are a consumer of your own company's products, what jobs do you use them to get done? Where do you see them falling short of perfectly nailing your jobs..
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Clayton M. Christensen |
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The foundation of our thinking is the Theory of Jobs to Be Done, which focuses on deeply understanding your customers' struggle for progress and then creating the right solution and attendant set of experiences to ensure you solve your customers' jobs well, every time. "Theory" may conjure up images of ivory tower musings, but I assure you that it is the most practical and useful business tool we can offer you. Good theory helps us understa..
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Clayton M. Christensen |
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If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies, problems--planning better, working harder, becoming more customer- driven, and taking a longer-term perspective--all exacerbate the problem.
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Clayton M. Christensen |
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With the lens of Jobs to Be Done, the Medtronic team and Innosight (including my coauthor David Duncan) started research afresh in India. The team visited hospitals and care facilities, interviewing more than a hundred physicians, nurses, hospital administrators, and patients across the country. The research turned up four key barriers preventing patients from receiving much-needed cardiac care: Lack of patient awareness of health and medic..
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Clayton M. Christensen |