innovators-solution

Best Thing: Reviewers often highlight the book's insightful analysis of innovation and disruption strategies, emphasizing its practical frameworks and real-world examples that help readers understand complex concepts. The focus on categorization and understanding customer needs is particularly praised for its applicability in various industries. Worst Thing: Some reviewers criticize the book for being overly dense and challenging to digest, with a complex structure that may be difficult for readers to follow. Additionally, a few readers mention that certain concepts could have been explained more clearly, making it less accessible for those new to the subject of innovation.

Key Insights

  • The randomness of innovation is an illusion of poor categorization. Outcomes that look random are often predictable once you understand the circumstances — the job the customer is hiring the product to do, the competitive dynamics, the position in the adoption curve. The prescription before the diagnosis is the root cause of most failed innovation strategy. “One of the reasons the outcome of innovation appear to be random is many ignore categorization — need to take circumstances into account before recommending a prescription.”
  • Jobs to be done — segment by circumstance, not product or customer. The unit of analysis for product strategy is not “what features do customers want” or “what segment buys this” — it is “what job is the customer hiring this product to do?” Jobs are defined by circumstance, not demographics. This reframe changes everything: you compete against whatever else customers are hiring for that job, not against products that look like yours.
  • Disruptors keep climbing because improvement outstrips consumption. The disruptor enters at the low end of the market where incumbents don’t care. They improve. By the time they’re competitive with the incumbent’s core market, the incumbent’s customers have already been over-served and are ready to switch. Asymmetric motivation — incumbents are always more motivated to go up-market than defend the low end — makes this pattern nearly deterministic.
  • Interdependence vs. modularity — integrate when not good enough, modularize when good enough. When a product is not yet good enough for what customers need, integrate the value chain to squeeze out performance (as Apple did with hardware + software). When performance exceeds what customers can use, modularize and commoditize — and the profit shifts to the scarce component. “‘Why can’t they see we’re better’ — evidence of overshooting, go modular.” The key question: where in the value chain is there a not-good-enough problem?
  • New market disruption vs. low-end disruption — different playbooks. New market disruption creates non-consumers (people who couldn’t previously access the product). Low-end disruption takes the least profitable customers from incumbents. The go-to-market, competitive response, and resource requirements differ substantially between them. Most companies conflate them and get the strategy wrong.
  • Capabilities = Resources + Processes + Values. The RPV framework: resources are what you have, processes are how you work, values are what you prioritize. The processes and values that enable sustaining innovation will make disruptive innovation nearly impossible — they are literally designed for different problems. Separate organizational units with different RPV profiles are required, not just separate teams.
  • Earn fast profit as protection for growth. Without demonstrated profitability, innovation units inside large organizations face perpetual pressure to prove themselves on the incumbent’s terms. “Must drive fast to profit, delay to growth. Show your value early to find your strategy — unless independent, will always be pressured for fast profit and growth.”

— Drafted from external sources; review and edit to make your own.

From earlier notes:

  • One of the reasons the outcome of innovation appear to be random is many ignore categorization
    • Need to take circumstances into account before recommending a prescription
  • Disruptors keep climbing customer segments bc their improvement outstrips consumers ability to take advantage, so climb tiers
  • Asymetric motivation - big companies always motivated to go up market not down to fend off
  • Strategy of disruption increases odds of success in growth biz from 6 to 37 percent
  • Jobs to be done - segment first by need or crcumsrsjce, not product or customer
  • Hard because easier to quantify what you are giving up than what you are getting when you focus on a specific job or job set
  • New market (unservrd customers) is different than low end of the market (overserved)
  • Frame as threat to get resources, but then shift to make it an opportunity in how you pursue
  • Go to market through a disruptive channel - must be symmetry of motivations through the whole chain to take hold.
    • True in eth devs, not in traditional channels
    • Make competitors ignore you
  • Insource vs outsource - think about future core, not current core
  • Job to be done today - login and authenticafion. In the future - data platform
  • Interdependence - if complicated or unpredictable interfaces, integrate. Modularize if clean interfaces .
    • Where do as need to own the interface? Sdk to app?
    • Modular flexibility gives less freedom in design, so less performance. (But solved with open source)
    • When product is not good enough, need to eek out more performance (integrate) - but this assumes a knowledge of the job to be done and competition for it, which is not our circumstance
    • ‘why can’t they see we’re better’ — evidence of overshooting, go modular
    • Modular is far easier to compete over time as things change, less to reengineer
    • Integrated vs modular applies only once you know the market and job to be done. We just need to build a useful product first
    • Will shift over time. Right now needs are low
  • Anytime one part of the value chain is being commoditized, another part of the chain is being de-commoditized
  • Integrate the most needed product, encourage the other parts of the value chain, as needs are met beet commodization by modularize and move to next part of chain
    • Example: IBM gives up advantage in discs (profitable now but not later) by modularizing, making assembly accessible to competitors and commodity while they focus on the highest profit component supplying that
  • Do what customers value, not what you are currently good at
  • Capabities: resources, processes, values
    • Choose talent based on circumstantial experience — not success or failure in other areas
    • Values - everything that helps employees make decisions in line with company goals
    • The processes and values that enable sustatining innovation will make it impossivle to do disruptive. Need to create separate units with different processes and values
  • Don’t let deliberate strategy cloud ability to see emerging strategy - strategy can emerge from process and values, not dictate it (eg roi decision making)
  • must drive fast to profit delay to growth. Show your valud early to find your strategy
    • Unless independent will always be pressured for fast procit and growth - earn fast procit as protection
  • An organization cannot disrupt itself, it’s processes and values are set up to sustain not disruption
  • Growth engine
    • Driven by policy not finances
    • Strong leader and resources
    • Establish practice for shaping ideas into business plan
    • Train the org to think like this