Wednesday, June 21, 2006

Disruptive Innovation-V

61. One needs one strategy for sustenance and one for disruption. The questions and process adopted for the sustenance strategy is the following : Make assumptions, Build projections based upon assumptions, make decisions to invest based upon projections, implement the deliberate strategy. If one’s projections are going wrong one reexamines the assumptions. For instance one assumes that based on a GDP growth of 7% one will achieve a certain revenue figure. If one’s projection is not being achieved one goes back and examines the assumption.

62. For a Disruption innovation one indulges in Discovery – driven planning. The steps one follows are : One makes projections on a pilot basis. Now in this pilot what assumptions must prove true for the projections to happen ? Implement the plan to learn – to test whether the critical assumptions are reasonable. Invest when the key assumptions prove valid.

63. Be sure the brand is positioned on a job and move up the value chain as fast as possible.

64. When one integrates with another company be sure it’s for resources and not for processes or profits.

65. Everyone has a desire to create history. How can empty nos. create passion.

66. What matters is challenge, a desire to create history, burn one’s bridges, removing the escape buttons, and getting a breakthrough insight.

67. Most leadership teams outsource insight. One cannot outsource insight. The Grameen Bank in Bangla Desh was built on an insight which stated that people in the rural area are not affected by a loss of money inasmuch as a loss of credibility and face. Small loans are therefore given to women with the community as collateral. This could not have come from outsourcing.

68. All markets are ready but we just don’t have the ideas. We need to rethink the source of insight. We can’t source it from the same journals read by everyone. Big ideas don’t get killed; they just get diluted. We need to convert ideas into real time experiments. Just one idea is not enough. We need more and then roll them out as ‘fission’. We can’t execute new ideas with the previous mindset. We need to create escape velocity and avoid dilution.

69. There is a disruption taking place in management education. Operating companies are starting their own universities. Today there are 2000 corporate universities. The number of students applying to Harvard is coming down. Another thing is that everything is being uploaded onto to the Internet and is made foolproof and idiot simple for professors in corporate universities. In this way professors in management institutes are getting commoditized. If this is done by Harvard then Harvard would make money because it would be providing the teacher with better material rather than targeting the end user.

70. There are examples where incumbents killed entrants. Kodak came out with Easyshare targeted for girls. Where there is an emphasis on ‘Click and send by email’. It’s share jumped from 6% to 28% of the Digital Market. Fuji and Polaroid missed it.

71. What kind of innovation which a competitor would ignore or adopt ? is a key question to ask when approaching disruptive innovation.

72. By becoming so good hospitals overshot their patients with so much of care which these patients could not afford. So now if the technology is made available for these patients in outpatient clinics, doctors’ offices and homes of patients, there will be a new disruption. With nurses doing more sophisticated work the doctors are getting commoditized. The nurses become low cost high quality providers.

73. Culture needs to shift from proof seeking to experimenting.

74. A company relies on people as resources for innovation. But if it is to be sustainable then one needs to make it process dependent.


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