Thursday, April 8, 2010

If you are in Business and haven't read this book: You probably should.

The Innovator's Dilemma - Clayton M. Christensen

I had to share this with you. Rarely do I get excited about a book: but when one comes to your attention that is a reflection of your own thoughts and business principles, you tend to enjoy it all the more. This one fits nicely for me, as the position it adopts has a strong relevance to part of my business model.

As I read through the opening chapter, where there were strong references to the disc drive industry, I though I was going to be bored to death. What had not hit me at that stage was that, if I substituted the words 'product or service' for 'technology', the underlying message of the book would blossom.

The following are the areas of the book that I thought were relevant to the Industry that I operate in :

* Your customers/distributors may not be the best market indicators if the whole structure of the market changes.
* You can do everything right in your business and still fail, because of changes in 'product/service' and market structure.
* If you focus solely on profitable products that are currently in high demand, someone else can come into your market, from below, and bite you on the backside.
* No demand at the moment does not mean that this will always be the case.
* It is not a management priority to allocate funding to low margin products that are not in demand, until the demand arrives. By then, the company are left sitting on their hands.
* Product providers leave the door of opportunity open for more flexible low-cost competitors that eat into your market share.
* It's a marketing challenge to create a market for a product that distributors will not sell because their customers are not demanding that particular version of a product: Yet.
* Product providers can't get their heads around the notion that just because there is no hard data available to work with, for research purposes, does not mean that there will not be a demand for an innovative service or product at a future date.
* Sometimes it is important not to listen to distributors (or customers)
* Some business models evolve so slowly that product producers and distributors are not interested until the demand takes off. By then they are left with a bucket of crap and can take a few years to catch up: If they are lucky.
* Companies should chase small markets [create them even] when everyone else is focused on the gravy train

This is just a summary of what I got from the content. If there are any Life & Pension Company managers reading this, all is not lost. The author provides you with a set of rules that you should adopt so that you are not the one that ends up with egg (or something worse) on your face. It's time to make up your mind whether you are an Innovator or just an Imitator.

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