Xu Yanmei.
The book "The Innovator's Dilemma" written by the famous American management scientist Clayton Christensen is one of his series of works ("The Innovator's Gene", "The Dilemma and the Way Out", "The Innovator's Answer", "The Innovator's Prescription", etc.), and it is also the most speculative book in the series.
The themes, analytical ideas, and phenomena explained in this book not only have a guiding role in the operational sense for management practitioners, but also have a subtle inspiration for theoretical researchers to think deeply.
Anxiety of managers
The key theme of the book is that the management approach that drives a company to become a mainstream market leader is also the one that causes it to miss out on the opportunities presented by disruptive technologies. That is, well-managed businesses fail precisely because they are well-managed. This unavoidable contradiction and inescapable dilemma is actually a true portrayal of management reality, the author takes this fact as the research object, discusses the merits and causes and consequences, and shows a profound understanding and practical involvement.
First of all, the practical vigilance of this theme is clear and real, because every manager engaged in management practice is in a kind of anxiety almost every day, and the focus of anxiety is mostly about how to avoid being replaced by new products and technologies that may appear at any time. As a result, the speed of research and development of new technologies and new products, the investment of R&D funds, and whether there are the most cutting-edge R&D personnel ......It has become an important indicator to measure the level of the enterprise. Through careful elaboration, the author suggests that the practice manager who is in the midst of anxiety has the following basic characteristics, and you should understand and be clear about your own situation. First, there are two kinds of technology, continuous technology and disruptive technology, the so-called continuous technology and destructive technology, both of which are compared with the original mainstream technology in the industry. Continuous technology is a technical path that continues the mainstream technology of the industry, while disruptive technology takes a technical path that is different from the mainstream technology of the industry. Second, disruptive technology usually starts from the low end, when it first appears, it is inferior to the mainstream technology in the industry in some major performance, but it is more cost-effective and can meet some consumers who do not have high performance requirements, and at the same time, the early demands of disruptive technology developers are limited, even if it is only a narrow market and small returns, it can also stimulate great entrepreneurial enthusiasm, which lays the foundation for its subsequent improvement of product performance, product quality, and then improvement of technical standards. Third, in contrast, the excitement of innovation in large enterprises (referred to as mainstream enterprises in the book) focuses more on the continuous technology on the mainstream technology track, and at the same time, for the technologies and products that are not in the flow of the market with only a small market, the mainstream enterprises usually have varying degrees of low regard from the top to the bottom (management to the technical level), that is, the so-called arrogance of the bureaucracy.
When the author presents the above-mentioned management reality through conceptual analysis and case verification, I believe that every enterprise management practitioner in an objective situation will have a more or less experience of such problems, and then have associations and innuendos that touch themselves. This then leads to the question, why is this so?What is the mechanism and internal logic behind it?For mainstream enterprises, why are few enterprises implementing such an easy thing as dimensionality reduction?Answering these questions naturally leads to the theoretical contributions of the book.
The right thing to do is to be on time
The theoretical contribution of "The Innovator's Dilemma" is that it puts forward important concepts such as continuous innovation, disruptive innovation, S-curve, value network, and institutional capability framework (RPV), and the sequential presentation of these concepts helps to clarify the reason why mainstream enterprises are disrupted by disruptive innovation enterprises. The most important of these concerns the concepts of "value network" and "institutional capacity", which represent both internal and external aspects of the enterprise.
First, from the external level of the enterprise, the internal relationship between the value network and the possible subversion of mainstream enterprises is proposed and explained.
This is also what the author considers to be an important innovation of the book, because it proposes this concept on the basis of comparing previous theories, and the objects of comparison, the theory of the organizational perspective and the theory of the capability perspective, are both internal concepts of the enterprise. While acknowledging the value and contribution of the above theory, the author believes that it does not involve a broader vision, so he puts forward the concept of value network from the perspective of enterprise ecology.
The theoretical explanation for why mainstream enterprises encounter failures is that the organizational structure of enterprises can usually promote innovation at the component level, because most product research and development institutions are composed of product component research and development teams, which is a proven effective structural system under the condition that the basic structure of the product remains unchanged, but when the basic structure of the product is fundamentally changed, this structural system becomes an obstacle to innovation, which is called organizational inertia. The theoretical explanation from the perspective of capability is that a company generally relies on experience to build the technical ability of a certain product according to the hierarchy, and for the technical problems that should be solved and should be avoided, the historical choice of the enterprise determines the type of skills and knowledge it has accumulated, and when the best solution to the problem requires the enterprise to have knowledge that is very different from the experience it has accumulated, the enterprise is likely to fail.
Clayton Christensen acknowledges that there is a profound truth in the above explanation, but in the context of the relationship between technological change and changes in market structure, he argues that the more essential reason lies in the value web. The so-called value network refers to the interrelationship between stakeholders (customers, products, technologies, and organizations). Today's enterprises, without exception, are in the value network, also known as in a large organizational ecology, according to the concept of ecology, the behavior of biological species in the ecosystem depends more on the selection behavior of other species. Mainstream enterprises tend to engage in continuous technological innovation, not so much because mainstream enterprises have inherent advantages in these technologies and are easy to achieve results, but because mainstream enterprises have to consider the relationship between other stakeholders in the value network and continuous technological innovation. Moreover, the longer the mainstream enterprise exists, the larger the scale of the enterprise, the more dense and compact its value network will inevitably be, which makes it form an inseparable whole with the value network. As a result, the possibility of turning to the development of disruptive technologies is deeply limited by an already structured system. For example, the customer's usage Xi habits, the ability and willingness of the best business to provide spare parts support, the cooperation and connection of assistive technology, the understanding and support of employees within the enterprise, and so on. It can be said that the existence of the value network restricts the enthusiasm and possibility of the incumbent mainstream enterprises to adopt disruptive technologies, making the incumbent mainstream enterprises more inclined to adopt continuous technologies, and with the development of the industry, they may eventually be subverted by new enterprises that adopt disruptive technologies.
Second, from the internal level of enterprises, the internal relationship between the Resource-Process-Value (RPV) institutional competency framework and the possible disruption of mainstream enterprises is proposed and explained.
The authors explain that an organization's capacity is influenced by three factors: resources, processes, and values. Resources include people, equipment, technology, product design, branding, information, cash, and relationships with merchants, distributors, and customers. Resources are only the basic condition of institutional capacity, and the process of translating institutional capacity into value-added products and services is ultimately determined by processes and values. Process refers to the mode of interaction, coordination, communication and decision-making adopted by people in the process of enterprise from resource investment to product and service transformation. The process includes the entire process of enterprise value creation activities. Processes are set up to allow employees to repeat tasks over and over again, implying that the mechanisms used by the organization to create value are inherently resistant to change. Corporate values refer to the criteria by which employees make priority decisions. For a large company, the key measure of good governance is whether these clear and consistent values are pervasive within the organization. In short, it is extremely difficult to change an institutional capacity that is based on resources, processes, and values, especially when this internalized institutional capacity becomes part of the institutional culture.
So far, the author presents the reader with an irreversible fateful fate of mainstream enterprises: the objective pressure of external value networks and the subjective will of internal institutional capabilities will eventually make mainstream enterprises no match for even unpopular start-ups in the face of disruptive innovation.
Through a series of real enterprise cases and rational academic analysis, the author not only depicts the comical situation that mainstream enterprises are subverted and failed by disruptive technology innovators because of their seamless and impeccable management activities, but also gives countermeasures and suggestions on how to avoid such situations for some mainstream enterprises. After reading the book, those management practitioners who are being challenged by the pursuers and are anxious may have new problems if they really take the author's advice as a treasure and adopt it. This is where the speculative nature of the book lies.
The so-called "dilemma" is actually a state and scenario that cannot move forward, backward, and cannot be put off, so there is no so-called coping strategy, only the current trade-off according to the actual situation. The author carefully describes the objective state of existence of real enterprises, so as to illustrate the dilemma that management activities can never be separated from. The correct approach of all enterprises is based on the environment at that time, which is the unique heterogeneous characteristics of management activities, and it is also the best illustration of the scientific and artistic nature of management.
In the last part of the book (Chapter 11), the author summarizes the main ideas and essential ideas, and clearly expresses the true intention of writing the book with the finishing touch. "Some of the most capable managers in some exceptionally successful companies have failed because they have used best management techniques, but companies should not abandon the capabilities, organizational structures, and decision-making processes that have allowed them to shine in the mainstream market simply because these management skills are incapable of responding to the threat posed by disruptive technologies. The vast majority of innovation challenges faced by companies are inherently continuous, and addressing these challenges is what companies are trying to do. Managers of these companies simply need to recognize that these capabilities, cultures and methods are only valuable under certain conditions. ”