Clayton Christensen's bestselling book, The Innovator's Dilemma, introduced the groundbreaking idea of disruptive innovation, revealing how even well-run companies can do everything right and yet still lose market leadership.
In The Innovator's Solution, Clayton Christensen and Michael Raynor expand on the idea of disruption, explaining how companies can and should become disruptors themselves. Now with a foreword by innovation expert Scott Anthony, this classic work shows just how timely and relevant these ideas continue to be in today's hyper-accelerated business environment and will help anyone trying to transform their business right now.
Christensen and Raynor give advice on the business decisions crucial to achieving truly disruptive growth and propose guidelines for developing your own disruptive growth engine. The authors identify the forces that cause managers to make bad decisions as they package and shape new ideas-and offer new frameworks to help create the right conditions, at the right time, for a disruption to succeed. This is a must-listen for all senior managers and business leaders responsible for innovation and growth, as well as for members of their teams.
Finally, an answer to the ultimate business question: How do some companies achieve exceptional performance over the long term?
In every sector, there's an outlier. In the pharmaceutical industry, it's Merck. In discount retail, it's Family Dollar. It used to be Wrigley in candy and Maytag in appliances. Other superstars have been hidden in plain sight, like Heartland Express in trucking or Linear Technology in semiconductors. How do these exceptional companies deliver superior performance over the long run despite facing the same constraints as competitors? What are they doing differently? What can we learn from them?
Michael E. Raynor and Mumtaz Ahmed have analyzed data on more than 25,000 companies spanning forty-five years. Their five-year study began with a sophisticated statistical analysis to identify which companies have truly exceptional performance, 344 in all.
In collaboration with teams of researchers, Raynor and Ahmed then put a carefully chosen representative sample of twenty-seven companies under the microscope to uncover what made the stand-out performers different. They found that exceptional companies, when faced with difficult decisions, follow three rules:
-Better before cheaper. They rarely compete on price.
-Revenue before cost. They drive profits through price and volume, not thrift.
-There are no other rules. Everything else is up for grabs, and they are willing to change anything to remain true to the first two rules. The rules provide an indispensable compass that any company can use to chart its own path to greatness. Is it better to keep price down or invest in creating value that commands a higher price? Should you focus on talent and developing the abilities of your people or build processes to extend the capabilities of your organization? How about acquiring a sizable competitor to secure economies of scale-or a small start-up to gain access to new technology? According to Raynor and Ahmed, the right answers to these and just about every other question are the ones most closely aligned with the rules.
The Three Rules is built on a powerful combination of large-scale data analysis and in-depth case studies. Its guidance will increase the chance that your organization can become truly exceptional.
Clayton M. Christensen is a professor of business administration at Harvard Business School. Michael E. Raynor is a director at Deloitte Research. Together, they outline an innovative plan that urges businesses to create disruption rather than fleeing from it. Named one of 2003's Best Business Books by Business Week, this book is a Wall Street Journal and New York Times best-seller.
