Professor Clayton M Christensen on "Hard times can drive innovation"

December 16th, 2008 · Comments

How can we get out of the current mess we’re in? It has to be innovation and technology. I’m starting a new series on innovation — so far my blog has been very much focused on "playing defense" against Depression 2.0. But, we need to start thinking about "offense" as well.

To start the series on Innovation, I’d like to share with you something I read today from Dr. Clayton Christensen, the famed Harvard Business School Professor who wrote The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business

"In the next two years, I think the answer will hinge quite a bit on the role that hedge funds play in driving stock prices. By now, 95 per cent of all trades on the stock exchange are executed by hedge funds, mutual funds or pension funds that you could not call shareholders. They’re share owners, but they don’t even hold the shares long enough, on average, to vote the proxy. And long-term shareholders are always better for innovation than the short-term people are."

"And there’s another business model toward which more and more companies need to move. It’s a business model you see with Li & Fung in Hong Kong, Tata in India, and Cox Enterprises in Atlanta. In this model, the holding company is privately held, and then some of the subsidiary companies that have the right characteristics take their shares public on the market.

What that allows those companies to do is, when they have a disruptive innovation that they need to launch, they can just do it under the private umbrella of the holding company, and not have it reduce the near-term performance of the publicly held subsidiaries."

Very interesting observations. Read the full article.

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Tags: Innovation

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Harry Winter 01/16/2009 04:31 AM 1 point
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Harry Winter again,
I believe the previous e-mail combined both URLs into one. Here are both URLs again:
www.EE-logos.org
www.msmisp.com/futuretest/inde...

Both should work
Sorry about that, Harry

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Harry Winter 01/15/2009 11:36 AM 1 point
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Both web URLs will get you to the main paper on which will engulf our country. Just last month I came to the same conclusion you did: The only likely solution is "aggressive developments" of technology a' la Christensen.
I wish Christensen had the conviction (believe) in his concept that Albert Einstein had in his formula about Energy being equal to Mass times speed of light squared. ---- And also had the "guts" to write a letter to the President as Albert Einstein did.
No one apparently can see that we are not in a historical depression which has one year duration, but something quite new which will be permanent. --- Read my paper on that (EE-Logos.org) I have send these papers to the CEOs of tech. companies who have spoken out about this coming catastrophe --- here is my cover letter for these mailings:
December, 14 08 ---- Harry Winter, MTS BTL ret. --- 150 Thornewood Dr. Granville, OH 43023
Please E-mail or phone for an answer Ref-hwinter@msmisp.com Tel 740 587 0226

Dear Sir, --- I am sending these papers to only a small group
of CEOs, because as a famous American once said:

“It only takes a few good men to do nothing”, ---for evil to persist --- or to let it happen that a looming economical cataclysm will engulf the US. The 7 men I have quoted in my paper, --- Craig Barret, Tim Ferguson, Jack Gifford, Andy Grove, Brian Halla, Jeffrey Immelt, Ben G. Streetman are certainly all “good men”, because they have honestly made public what their sharp intellect tells them, instead of what hundreds of thousands of wealthy Americans are doing now; namely keeping quiet and changing their Millions of $ into safer Euros. Question is, will these 7 “good men” ever do anything EFFECTIVE to help their country? (Instead of just playing the role of “Cassandra”.) --- Right now they have not even hinted at any remedies, because there might not be any. One CEO, Jeong Kim of BTL, the company I worked for all my life, realizes that the US is no place for BTL anymore and he moved it to Paris, France. - I must agree with him that there is no solution to this catastrophe as long as we are just looking for the the , the .

What we need are --- CREATIVE --- solutions instead,
which are just the kind most CEOs shy away from.

We need new kinds of Skunk-Works to stay afloat in this “Economic War of the World”, (World War III?). Not for inventing superior products that fly higher and faster, as was the purpose of the original Skunk-Works, but to create innovation with COST/PERFORMANCE -- BREAKTHEOUGHS that will allow us to put our people back to work again --- with acceptable wages. Can it be done? Yes, I believe I proved it, if only for a single product, mind you I am just ONE engineer.
As I have suggested in my paper, to survive this Economic War we need to promote (or enforce), with tax manipulations etc., a very aggressive development of Innovation at all R&D centers that are still operating in the US. Only that might prevent Jack Gifford’s prediction about America’s high standard of living, brought about by technological innovation, to cede to Asia.

Are you asking Mr. CEO, “How can you expect thousand of engineers across the country to invent more of your “hair-brained” idea of innovations? --- First, it is not my “hair-brained” idea, but the discovery of a Professor Clayton M. Christensen’s of the Harvard School of Business. In my opinion his research is the most important finding by Harvard in a century. Second, I myself got 11 patens which are of this kind. --- And while I only have average engineering abilities, my inventions all worked and the few that went into large scale production proved to be extremely reliable in the field. This reliability and that my designs were always on schedule was appreciated by management. However, the much lower cost for my designs was not valued. Fortunately, our manufacturing arm, Western Electric, compensated for it by gold-plating circuit boards and using expensive high-reliability components, etc, etc. (Greed is handled differently in a Monopoly !) --- About answering your “question” Mr. CEO, --- Sorry, I don’t have a definite answer, --- I just have Hope, --- which is surely needed, because,
RIGHT NOW WE ARE LOOSING THIS ECONOMIC WAR!

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