Harvard's Clayton Christensen Cites EMC, Washington Post and Cisco Among Proven Innovators in Fast-Changing Markets
In Second Part of Gartner Fellows Interview, Best-Selling Business Author Says More Companies Are Managing Innovation Effectively
STAMFORD, Conn. October 14, 2004 — The process of managing successful innovation is becoming less random and less unpredictable, according to Harvard Business School Professor Clayton Christensen. As a result, more companies are benefiting from mid-course corrections after assessing new threats and opportunities in their markets.
"Almost always, a company starts out in a direction conceived by the founder, and in 93% of companies that ultimately end up being successful, they figure out the original strategy doesn't work," Dr. Christensen says in an interview posted this month on gartner.com. "But by...thorough experimentation and trial-and-error in the market, they happen upon or iterate towards a strategy and a business model that really is viable."
In this second part of a two-part interview conducted by Gartner Fellow Howard Dresner, Dr. Christensen identified these companies among others as having created and implemented new strategies based on innovative products:
EMC Corporation, the computer storage company, acquired a mid-range storage solution through its purchase of Data General that now contributes 70 percent of its revenues.
The Washington Post Company now derives more than half its revenues from online learning services because of investments built on its origins in news publishing.
Cisco Systems Inc., the Internet networking company, last year acquired a potential disruptor to its own traditional networking products, Linksys. Cisco operates Linksys as a separate organization to preserve the unit's position as a leading maker of wireless routers.
"What I hope we do...is highlight for innovators a bunch of variables that lie at the root of many innovative failures," Dr. Christensen said, referring to issues covered in the Fellows Interviews and more extensively in his best-selling books, The Innovator's Solution (2004) and The Innovator's Dilemma (1997). A third book, co-authored by Dr. Christensen and entitled Seeing What's Next, was published this month by Harvard Business School Press.
The first part of the Christensen interview, posted in August, is also available on the gartner.com web site.
Mr. Dresner, a Gartner research fellow and vice president of Gartner, Inc., the world's leading technology research and advisory firm, is a worldwide authority on business intelligence, the systematic process of data collection and analysis. He is hosting the Gartner analysts' keynote presentation, "Preparing for Software-Driven Business Transformation," on Monday, October 18, at the Gartner Symposium/ITxpo conference in Orlando, Fla. The six-day conference is expected to draw 7,000 attendees, including more than 700 chief information officers from business as well as non-profit and government organizations.
Other key points made by Dr. Christensen in the October Fellows Interview include:
Data analysis is an effective discipline for businesses working to sustain or build leading market positions, but this same historical data can mislead companies when they confront or pursue disruptive innovations.
Pattern recognition is more useful for identifying trends than standard metrics. "Any piece of data only has meaning when you filter it through some theory in your mind," he said. "If you've got a model or a theory, and you see a piece of data, then you can interpret it: is this signal, or noise?"
Information technology inhibits innovation if executives "come to think the market is structured along the lines" an organization's IT resources generate data about the market. When IT systems structure data by product line and by business unit, executives frequently overlook major opportunities.
The Gartner Fellows Interview features Gartner analysts each month in discussions with leaders in technology, business and government on significant industry issues. The Gartner Fellows are 15 Gartner research analysts, distinguished by their reputations as innovators and thought leaders. They collaborate with more than 500 Gartner research analysts worldwide to identify and examine emerging trends and technologies.
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