Review: Seeing What’s Next–Using Theories of Innovation to Predict Industry Change

5 Star, Best Practices in Management, Change & Innovation, Future

Seeing NextBook-End for Prahalad’s Fortune at the Bottom, July 29, 2008

Clayton M. Christensen

The primary author’s first two books were each sensational in their own way–.I was particularly gripped by his description of the throw-away camara as being unattractive to the high-end camara shops, but when adopted by grocery stores, led to the 90% of the non-consumers of high-end camaras getting into photography. The key: low-cost offering for the non-consumers introduced outside the incumbent arena.

That is the heart of this new book, and the addition of two co-authors suggest that the author’s vision is spreading.

I actually read the two chapters on education and health care first–the first because my oldest son blew off his senior year in high school at not worthy of his time, and is now racking up community college credits at very low cost (with the same instructors from the higher cost Geroge Mason University) and is a living embodiment of the education chapters first focus: what matters is not credentialling from the higher end universities, but the low cost acquisition of “just enough just right” learning from key teachers (the brand is shifting from schools to teachers).

Both the education and the health chapters drive home three big points that I find compelling and exciting in the context of C. K. Prahalad’s The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks):

1. The innovation and profit opportunities are with the non-consumers–the ultimate non-0consumers today are the five billion poor, and especially the 1.5 billion each in China and in India, two countries that have the capability to create call centers for “just enough just in time” learning via cell phone.

2. The keys to health innovation, both in the developed world of one billioin rich and in the undeveloped world of the five billion poor, are:

a. Creating “good enough” solutions that are very low cost and easy to push into remote areas that could not afford high end care; and

b. Pushing innovation down the pyramid from the expensive sites and specialists to the nurse-practitioners and ultimately to the patient themselves; while also moving the diagnostics and the remedies down to the point of care and aware from the hospital “hubs” that are now as antiquated as the airline “hubs” that block point to point travel.

Chapter Ten on “The Future of Telecommunications gave me goose-bumps. No kidding. Thunderclaps and blinding lighting accompanied the third page of this chapter, in part because I have been thinking about Open Spectrum (see David Weinberger’s brilliant chapter on this, free online, and also his new book, a sensational new book, Everything Is Miscellaneous: The Power of the New Digital Disorder. Althought the chapter focuses priimarily on wireless versus hardline hardware options, and does not mention either the obvious fact that satellites still have too much delay for ubiquitous wireless from outer space (something that should go away in ten years with higher energy pulses), or the other obvious fact, that even wireless is being commoditized and that on demand services and sense-making are the next big offering from the innovators, I found this chapter compelling. Arthur Clarke said long ago that telecommunications should be more or less free as an enabler, and I agree. We need to make both communications and education free to all, and monetize the transactions, the patterns, the early warning, and the aggregate sense-making.

The next most important chapter for me was Chapter 3, “Strategic Choices: Identifying Which Choices Matter.” What stuck with me are three things:

1. Start early–don’t wait for everyone else to realize the need

2. Hire accordingly. This is HUGE. Most companies have a profile for new employees that is 20 years out of date. Most companies have no clue that Digital Natives are completely different from Digital Immigrants (as one author notes: this is the first generation where the kids are not little version of us–they are a metaphysical transformation well beyond us and anything we can comprehend). Hence, companies have to have the leadership needed to create a “safe” skunkworks where iconoclasts and others who are largely antithetical to the gerbils and drones hired in the past, can innovate without having to deal with the insecurities, ignorance, bad habits, and “rankism” of those trapped in the pyramidal paradigms of the past.

The Appendix provides a summary of key concepts and has some really excellent illustrations that are very helpful. The point within the Appendex that escaped me earlier in the book and was driven home here is that ultimately the innovative firms make investments as a means of learning, not as a means of realizing their pre-conceived notions of what is needed next. I continue to recommend the Business Week cover story of 20 June 2005, “The Power of Us.” Innovation, it appears to me, works best when firms both hire and invest to learn, *and* dramatically and deliberately expand the stakeholder circle to embrace the end-user being sought as a customer.

The rest of the book is very worthwhile for those that do not read broadly in the business or innovation leadership.

Other books that I have found as exciting at this one:
Groundswell: Winning in a World Transformed by Social Technologies
Mobilizing Generation 2.0: A Practical Guide to Using Web2.0 Technologies to Recruit, Organize and Engage Youth
The Change Handbook: The Definitive Resource on Today’s Best Methods for Engaging Whole Systems
Society’s Breakthrough!: Releasing Essential Wisdom and Virtue in All the People
How to Change the World: Social Entrepreneurs and the Power of New Ideas, Updated Edition
The leadership of civilization building: Administrative and civilization theory, symbolic dialogue, and citizen skills for the 21st century
The Wealth of Networks: How Social Production Transforms Markets and Freedom

Finally, a book I published with 55 contributors, free online but utterly wonderful in