From The Author

“If I wanted to start a company that could become significant and successful and ultimately topple firms that now lead an industry, how could I do it? If indeed there are predictable reasons why businesses stumble, we might then help managers avoid those causes of failure and help them make decisions that predictably lead to successful growth” (Christensen et al., 1).

Discovery

The authors do not discuss how to manage these activities.

Evaluation

Do not attempt to frame a disruptive innovation as an opportunity. “. . . framing the new-market disruption as an opportunity simply does not get people’s attention: It makes little sense to invest in new-growth businesses when the present ones are doing well” (Christensen et al., 1). Therefore Christensen recommends that the disruptive innovation should be framed as a threat during the resource allocation process, then once the commitment has been made, to switch to viewing the innovation as an opportunity during the elaboration stage.

Elaboration

“. . . responsibility to commercialize the disruption needs to be placed in an independent organizational unit for which the innovation presents a pure opportunity.” It is important for those engaged in the venture building process to see only “upside opportunity” (Christensen et al., 1). Christensen bases his conclusions on the work done by Professor Clark Gilbert at the Harvard Business School.

Acceleration

“Research suggests that in over 90 percent of all successful new businesses, historically, the strategy that the founders had deliberately decided to pursue was not the strategy that ultimately led to business successes” (Christensen et al., 1).

• Emergent Strategies
• The author states that a new venture must remain open to new strategies that emerge in the course of business. That a new venture must learn what works and what is not working and then take that knowledge and cycle it back into the business. Christen writes, “One of the most important roles of senior management during a venture’s early years is to learn from emergent sources what is working and what is not, and then to cycle that learning back into the process . . .” (Christensen et al., 1).

Human Resource Management

“Of all the resource choices required to successfully build new-growth businesses, the one that most often trips a venture up is the choice of its managers” (Christensen et al., 1). Christensen suggests that when hiring managers for a new venture that one look to hire those who have faced similar problems and challenges in the past. To do this you would first list the problems/challenges that your new venture is likely to face in the future. Then list the experiences your management staff should have gone through that would give them the intuition and skill to understand and manage these challenges. In other words you do not look for attributes, you look at the challenges you might face and the experiences that would give you the best chance to meeting those challenges (Christensen et al., 1).

Innovation Infrastructure

• Create a Parallel Approval process
• Companies need to create a parallel decision making process to evaluate disruptive innovations. “Ideas will enter this parallel process only partially formed. . . Executives who allocate resources in this process should approve or kill project budgets based on fit with the pattern [new market disruption pattern], not numerical rules” (Christensen et al., 1).
• Start Before You Need To
• Begin investing in disruptive innovations before you need to. Budget for the amount of capital and new businesses you need to start.
• Appoint a Senior Executive to Shepard ideas
• “Creating a successful disruptive growth engine requires the careful coaching of the CEO or another senior manager who has the confidence and the power to exempt a venture from an established corporate process, to declare when different processes need to be created and to ensure the criteria being used in resource allocation are appropriate to the circumstances of each venture and the needs of the corporation” (Christensen et al., 1).
• Create a Team and a Process for Shaping Ideas
• “Create a core team at a corporate level that is responsible for collecting disruptive innovation ideas and molding them. . . The members of this team have to understand these theories at a deep level, stick together and apply them frequently” (Christensen et al., 1).

Technology Development

The authors only refer to technology development as part of their discussion on RPV (Resources, Processes and Values).

1 Christensen and Raynor, The Innovators Solution, Harvard Business Press, p 34, 2003

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