2014 book on Reading Notes: innovator's Dilemma

The theory in this book may not be very useful to employees of state-owned enterprises. But as a researcher, it is also an innovator who sums up innovative technologies all day. So I want to know what the innovator will encounter? The book is so arrogant that it is intended to illustrate a point of view: some outstanding enterprises fail in the tide of market changes and technological changes, not because they neglect management, instead, they pay great attention to listening to consumers' opinions, actively investing in new technology R & D, working harder, and investing more actively. The book analyzes some phenomena in the hard drive industry, Excavator Industry and steel industry, and draws the above conclusions. Due to this theory, Clayton M. Christensen, the author of the book, laid his position in Harvard Business School.

The acknowledgment part of the book seems to have been written in 1997, and the author points out that in the near future, compared with personal computer hardware and software vendors, internet tools may also become destructive technologies. After reading the complete book, The Preface of the book is a comprehensive summary of the book. On the last page of the preface, the author points out that some information and Internet technologies are destructive for many traditional industries, such as mobile phone, handheld digital devices for laptops, online printing for traditional printing, online retail for housing retail and so on.

The context of the book is very clear. For the second part, the first part describes why large enterprises fail, and the second part provides some principles to deal with the innovator's dilemma.

Part 1: Why are large enterprises failing

The author spent a lot of time studying the decline of some enterprises in the hard drive industry. Why did he choose hard drive? In the past, when scientists studied genetics, they did not select humans because humans had been breeding for the next generation for about 30 years. Instead, they chose fruit fly as the study object because fruit fly was dying, the entire process from conception, birth to maturity and death was completed within one day. The hard drive industry has experienced rapid and cruel technological changes and Market Structure Changes in just 20 years.

This chapter introduces two important concepts:Continuity Technology(Sustaining technologies) andDestructive Technology(Disruptive technologies ).

Continuity technology refers to such technologies in the process of enterprise innovation. These technologies aim to continue the inherent track of product performance improvement to achieve better performance and higher profit margins. This includes small incremental improvements, as wellBreakthrough(The breakthrough here is not a destructive technology. For example, the change in Head Technology in the hard drive industry. Large enterprises can succeed no matter how difficult the technology is.

Disruptive innovation provides a completely different product portfolio. Only emerging markets that are far away from the mainstream market or have little significance for the mainstream market will pay attention to the attributes of these product portfolios. Such innovations do not usually involve complicated technological innovations. For example, structural innovation of Hard Disk size and size. Every change in the structure actually has a corresponding market demand, and the technology is not very difficult, but large and mature enterprises did not pay attention to it at the beginning, leading to the fall of some manufacturers.

Chapter 4 points out that each enterprise has its own value network. He wants to maximize the value, so he keeps moving to the top right. However, the value network in the lower right corner has a vacuum area, allowing emerging enterprises to intrude into the network.

Technology S-curve: In the early stages of technological development, the speed of performance improvement will be relatively slow. As your understanding of the technology deepens, the speed of technological improvement will keep accelerating. However, at the maturity stage, this technology will gradually approach the natural or physical limits on the nearline.

Several stages of disruptive technology development are usually as follows:

1) First, it is successfully developed in a mature enterprise. Destructive technologies are usually not too difficult. Some engineers in mature enterprises will develop them in advance, but they will not be recognized by the management.

2) The marketing personnel collect the requirements of the company's main customers. However, mainstream customers are not interested in this type of destructive technology. destructive technologies do not have the relevant human and material resources in mature enterprises. It is precisely because of the disdain of large enterprises that emerging enterprises have begun to attack the city.

3) mature enterprises must accelerate the development of continuous technologies. Mature enterprises are still investing a lot of money in R & D continuity technology and have an impact on the high-end value network.

4) new enterprises have emerged, and the destructive technology market has gradually taken shape in repeated attempts. Some new enterprises are even created by former employees who are not yet mature. They constantly try and explore low-end markets.

5) emerging enterprises move to the high-end market. When the technology is mature, the development speed is relatively rapid and begins to swallow the high-end market.

6) mature enterprises are slow to maintain the customer base. At this time, mature enterprises began to wake up, but the situation was irrecoverable.

Chapter 4 points out that the same problem exists in the Excavator Industry. At the beginning, the hydraulic mining technology was not a climate, but it had a value for its survival. After its maturity, the technology quickly intruded into the high-end.

Chapter 4 points out that it is not easy for mature enterprises to return to the low-end market. due to their limited costs, their value orientation makes them unable to return to the low-end market. This leads to a confusing management feature-the ideal growth and profitability are upward flows, with the most fatal impact coming from low-end markets.

Part 2 disruptive technological changes in management

Chapter 5 to Chapter 9 provides several principles and solutions.

1) An independent institution should be established to develop destructive technologies. What truly leads the enterprise development process is the power outside the Organization, the consumer, rather than the Enterprise Manager. If you want to consider both continuity and destructive technologies without guaranteeing the independence of the institution, the results may be miserable. Here we talk about the example of the Discount Store and printer industry.

2) small organizations must be small enough to easily meet small opportunities and small profits. At this time, I suddenly thought of a good computing center that year. I had to invest a few new production lines to produce kiling VCD. It is said that it would achieve 0.1 billion of sales. I don't know if I encountered this destructive technology or other problems? Apple's Newton Products wanted to be the main profit point in the market, but the market, technology, and timing were not mature and it took a huge investment. Although it sold 43 thousand machines within two years, it was still a failure.

3) the market for such destructive technologies was not obvious at the time. It was necessary to constantly try, learn, and adjust these technologies to discover such new emerging markets. Failure is the only way to success. It sounds a bit like the concept of agile software development process. Honda was not found in the market at the beginning. At that time, Intel only made DRAM and did not find the microprocessor market. In the face of such technology, do not count on a success. You must find the right direction in the second and third attempts.

For continuous technology, advance prediction and planning are important, and careful planning and active implementation are key.

However, in disruptive technological changes, action must be taken before a detailed plan is developed. Learn and adjust in action.

4) The processes and values of mature enterprises do not mean that they will change. To cope with destructive technologies, we must establish a different set of enterprise operation methods.

5) Sometimes the technology develops too fast, and the market demand does not reach this level, forming an over-performance supply. For the software industry, functions are not necessarily big but simple and convenient.

Chapter 1 describes how to manage disruptive technological changes in the electric vehicle industry. If you discover that a technology is destructive in your industry, you can learn how to think in this chapter.

 

After reading this book on weekends and flights to Chengdu, it seems that an information research institution of state-owned enterprises has no users, no clear product positioning, and no profit value orientation, is it because we have the opportunity to constantly research destructive technologies? If you start a company on your own, you may encounter this destructive technology in the fierce competition, right?

2014 book on Reading Notes: innovator's Dilemma