Entrepreneurship
The Innovator's Solution: Creating and Sustaining Successful Growth
Clayton M. Christensen & Michael E. Raynor 2003 11 references
Christensen's framework for predictably building disruptive growth businesses through circumstance-based theory.
disruptive-innovation growth-strategy jobs-to-be-done competitive-strategy organizational-design circumstance-based-theory
Overview
The Core Framework
- Disruption is predictable, not random — circumstance-based theory replaces attribute-based best practices
- Sustaining innovation (better performance for best customers) → incumbents always win
- Disruptive innovation (simpler/cheaper for nonconsumers or overserved) → entrants win because incumbents are rationally motivated to flee up-market
- Segment by the job the customer is hiring the product to do, not demographics
- Target nonconsumers first — their reference point is nothing
- Get initial conditions right (cost structure, org structure, customer, capital type) and let predictable forces carry the venture
Quick Lookup
| Situation | Do This | Avoid This |
|---|---|---|
| Entering a market against powerful incumbents | Shape idea into a disruption using three litmus tests | Launching sustaining attacks against entrenched players |
| Choosing initial customers | Target nonconsumers trying to get a job done but unable to | Targeting the most demanding, profitable customers |
| Deciding product features | Segment by job-to-be-done in specific circumstances | Segmenting by demographics or product attributes |
| Make-vs-buy decisions | Integrate what's not good enough; outsource what overshoots | Using static "core competence" assessments |
| Margins under pressure | Move to the adjacent not-good-enough stage in the value chain | Defending a commoditizing position with branding alone |
| Structuring a disruptive venture | Create an autonomous unit with different processes and values | Running disruption inside the mainstream organization |
| Strategy is uncertain | Use emergent strategy; test assumptions via discovery-driven planning | Committing to a deliberate strategy before finding a viable model |
| Funding a new venture | Patient for growth, impatient for profit | Demanding rapid revenue growth while tolerating losses |
The Key Insight
"If indeed there are predictable reasons why businesses stumble, we might then help managers avoid those causes of failure and help them make decisions that predictably lead to successful growth." — Christensen & Raynor, In Gratitude
References
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