HBS Working Knowledge: Innovation: The Innovator's Battle Plan
HBS Working Knowledge: Innovation: The Innovator's Battle Plan:"Great firms can be undone by disruptors who analyze and exploit an incumbent’s strengths and motivations. From Clayton Christensen’s new book Seeing What’s Next."
His definition and use of "cramming" to explain implementation ( or not) of new technologies, opportunities etc identifies another "soft belly" of main competitors...
Cramming is :"When an existing firm tries to insert a product or service with disruptive potential into its processes, what comes out the other end tends not to be disruptive. Instead of embracing the innovative product's inherently disruptive nature, the incumbent inevitably tries to morph the product to fit into its existing processes and values. It alters the innovation to enhance its appeal to core customers and fit within its operating model. The problem with cramming is that it changes the innovation in ways that obviate its inherent disruptive energy. It takes an innovation from a circumstance in which its unique features are valuable to a circumstance in which its unique features are a liability.
Cramming is like trying to stuff a square peg into a round hole. What signs indicate that cramming is occurring? When companies spend a lot of money fixing product deficiencies, they may be cramming. Large charges or expenses to integrate an acquisition are a good tip-off. Another sign is when companies must convince customers to change their behavior or put up with something they don't seem to want.
For example, Kodak first began to sense that digital imaging might pose a threat to its core business in the mid-1990s. It invested more than $2 billion in research and development. However, it framed the challenge as, "How do we make digital imaging good enough to serve as a viable replacement to silver halide film in our core market?" By seeking to create high-priced, performance-competitive digital products, Kodak missed much of the disruptive growth driven by inexpensive digital imaging. Kodak eventually established a strong market share after introducing a very low-cost camera, but only after spending $2 billion trying to maximize its cameras' performance.10
Companies that develop different ways to target nonconsumers and overshot customers can create a new market or attack the lower tiers of a market almost free from interference from an incumbent that views the opportunities as unattractive. They have the potential to develop legitimately different skills and business models….
How can you observe asymmetric motivation in action? When companies take completely different actions that make sense to both of them, it is a sign that there are asymmetries. When one firm calls an industry "unprofitable" while another firm calls that market "important," asymmetries are at work.
Asymmetric skills act as a weapon a company can brandish to attack its opponents. Remember, a company's skills come largely from its processes. A process comes from repeatedly solving a particular class of problem. Processes are designed to get the same thing done, over and over—and as such they tend to be inflexible. Asymmetric skills arise when one firm, through repeatedly completing the same task, has developed a unique ability to do something that its competitor is uniquely unable to do.
How can you tell if combatants have asymmetric skills? Make a list of the tasks the company has repeatedly addressed, for which formal and informal processes have likely coalesced. Compare the list to the nature of tasks required to succeed in the disruptive market. If a company's processes facilitate its doing what it needs to get done in a market context, it has the requisite skills to take that market. Companies all have strengths and weaknesses. When one firm has strengths in markets in which another firm's capabilities are weaknesses, the firms have asymmetric skills.
Our theories suggest co-option efforts will be fruitless when success requires different skills or motivation. But when co-option is viable, incumbents can still ultimately master the technology and detain or swallow potential attackers. Existing telephone companies knew how to build and maintain networks. They had existing customers. They had a ton of cash. These were tough capabilities for wireless entrants to overcome. Selecting a business model that looked attractive to incumbents and providing a means for incumbents to learn put wireless entrants at a long-term disadvantage.
To sum up, incumbents tend to respond to potential disruptive incursions in one of three ways: they either cede a market, attempt growth-driven co-option, or attempt defensive co-option.
posted by Jen @ 8:33 am
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