To: Wang Zhongjun, President of Huayi Bros Media Group

From: Jingjing Huang

Re: Book review of The Innovator’s Solution

Date: 04/12/13

Written after The Innovator’s Dilemma, which concentrates on why is it so hard to sustain success, proposes a puzzle: how to start a company that could become important and successful and ultimately lead an industry, The Innovator’s solution is kind of the sequel of The Innovator’s Dilemma, which gives the answer to this question and aims at helping managers get to know those predictable reasons that lead to successful growth.

The Innovator’s Solution focuses on how companies can create the right conditions, at the right time, for a disruption to succeed. Companies are always seeking development chances through innovation in order to keep their success records. However, if mistakes exit on their road to innovating development, the consequences would be worse than no development. The core value of The Innovator’s Solution is to give, no matter which government, company, organization or individual, the common theories of how to make innovation happen in the right direction. Here’s the following question we talk about at this level: what affects the way we innovate and the future of our innovation? The author tells us that it is the prediction of an innovation based on a series of correct theories, which you can find in this book, or as I’d like to call it, a manual. Remember to be a disruptor instead of a disruptee before having the competitive strategy to break through those development barriers.

Clayton M. Christensen, Professor of Business Administration at the Harvard Business School, who is best known for his study of innovation in commercial enterprises, is the main author of The Innovator’s Solution. His famous theory of disruptive innovation, put forward in his first book, The Innovator’s Dilemma, would also be presented in chapter 2 of The Innovator’s Solution. The co-author Michael E. Raynor has a brilliant educational history ending with a Doctorate in Business Administration (DBA) from the Harvard Business School, The Innovator’s Solution is Raynor’s first book.

Why I think The Innovator’s Solution is worth recommending? I have five key words to answer this question.

The first one is market. Different from many other scholars and entrepreneurs’ opinion about innovation, Christensen’s innovation theory focus more on active response to the consistently changing market, rather than merely technology development or scientific discovery. Market echo- the idea of “doing the right thing at the right time”- is the core value in his theory, so I’d like to call this book a manual, it’s very functional to guide companies identify themselves correctly, make the most appropriate strategy, and apply these preparation at a mature opportunity, so that make sustaining development at last.

The second key word is product. Customers “hire” products to do specific “jobs”. Product, in this book, is defined as a kind of service that satisfies consumers’ need in certain context. In disruptive innovations, the most predictable successful product results from the understanding of the circumstances in which customers buy or use things. In other word, Companies that target their products at the circumstances in which customers find themselves, rather than at the customers themselves, are those that can launch predictably successful products. Using the author’s words that all consumers have “jobs” to be done, if a certain product is the matter of helping finishing this “job” effectively, conveniently and inexpensively, then the disruptive innovation works. That is to say, product need to be called into mind when consumers have such jobs can take advantage of it, then here comes the first step of sustaining development, build a brand. A brand’s meaning is positioned as a “job” to be done, which can trigger consumer’s instinctive reflection when he or she under the circumstances that the product communicates with.

Period is the third key word I give to this book. What makes an industry appear to be attractively profitable is the circumstance in which its companies happen to be at a particular point of time. As a new-growth venture, at the beginning of disruptive innovation, one new consumer demand or one new market segmentation is just explored, company should integrate various sources with their most powerful team. This is not a good time to out-source a partner. Manager, or the team leader, who masters the key point in this process, need to optimize the originality and competitiveness of the product. At this level, the original core team knows their product most, so that could make a clear, appropriate plan among a great number of choices. Then the market has stepped into a stable growth period, close to saturation. At the point where the enterprises are facing a fierce competition with almost identical products or services, modularity, outsourcing and decentralization should come to the stage in order to reduce the costs efficiently. Then investors finally has redefined the market through the disruptive innovation, following by substantial profit.

The next key word is organization. Organization integrates resources, processes and values during the whole period of disruptive innovation. Resources, the most tangible one among these three factors, include people, equipment, technology, product designs, brands, information, cash and relationships with suppliers, distributors, and customers. A good organization depends on its resources first, especially those start-up employees. They keep seeking small market with great potential through low-cost trial and error. Organizations create value as employees transform inputs of resources into products and services of greater worth. The patterns through which they make these transformations are called processes, which defines how an organization transforms inputs into things of greater value. Finally, they establish the processes and values as the solid foundations for sustaining success.

At last but not least, planning. In the period of sound development during disruptive innovation, managers should begin or acquire new business with growth potential as early as they can to gain considerable profits in those marginal markets in order to make sure they can survive this waiting period, and stay patient with the development of the new market. Managers and their teams are supposed to propose new assumptions, which could benefit improving profits. These assumptions need to be verified in the real cases, and they would provide the most valuable feedback to the organization. By integrating theory with practice and learning from every step, the organization has always been making progress, when it comes to the right point, they take chance immediately to transfer the disruptive innovation from a pilot program to mainstream market.

In a word, disruptive innovation at first keeps seeking small market differentiating from existing mainstream, then strengthens competence by values, and at last transforms to high profits product at a mature opportunity. If someone asked me to tell the one most valuable thing about The Innovator’s Solution, I would like to go back to the beginning of this book, remember the three sets of questions that determines whether an idea has disruptive potential: Can it be a new-market disruption? Can it be a low-end disruption? Does it disrupt all?