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Notes

Notes

1. In this chapter we’ll use the term senior executives to refer to men and women in positions such as chairman, vice chairman, CEO, and president. Senior executives who can perform well the leadership roles we describe in this chapter need to have the power and the confidence to declare that certain corporate rules will and will not be followed, given the circumstances that a growth venture is in.

2. As mentioned in chapter 8, Sony is the only example we know of that was a serial disruptor, having created a string of a dozen disruptive new-growth businesses between 1950 and 1982. Hewlett-Packard did it at least twice, when it launched microprocessor-based computers and ink-jet printers. More recently, our sense is that Intuit has been actively seeking to create new-growth businesses through disruptive means. But for the vast majority of companies, disruption has been at most a one-time event.

3. We again refer readers to Robert Burgelman’s Strategy is Destiny, an extraordinarily insightful chronicle of how the ex ante and ex post quality of high-impact strategic decisions was distributed across the layers of management at Intel Corporation.

4. Practices such as “management by walking around,” which was popularized by Thomas Peters and Robert Waterman in their management classic, In Search of Excellence (New York: Warner Books, 1982) are targeted at this challenge. The hope is that by walking around, senior managers might get a sense for what the important questions are, so that they can ask for the right information needed to make good decisions.

5. Some would assert that senior-most executives still need to be involved in decisions about major expenditures because of their fiduciary responsibility not to spend more than the company has to spend. Even decisions like these, however, can be made through capable processes.

6. This account summarizes a teaching case by Clayton Christensen and Rebecca Voorheis, “Managing Innovation at Nypro, Inc. (A),” Case 9-696-061 (Boston: Harvard Business School, 1995) and “Managing Innovation at Nypro, Inc. (B),” Case 9-697-057 (Boston: Harvard Business School, 1996).

7. In our account of this history, we are using the language of our models. Lankton did not know of our research and therefore was guided by his own intuition, not our advice. His intuition was stunningly consistent with how we would have viewed the situation, however.

8. Interestingly, despite the fact that the company has missed (so far) the opportunity to catch this wave of disruptive growth in high-variety, low-volume-per-model manufacturing, the company has done very well. It has followed the pattern outlined in chapter 6 of eating its way forward from the back end, integrating forward from component manufacturing into technologically interdependent subassemblies and even final product assembly. It (very profitably) tripled its revenues to nearly $1 billion between 1997 and 2002—a period in which several major competitors failed.

9. The nature of these companies’ disruptions is analyzed in figure 2-4 and the appendix to chapter 2.

10. Something else worth noting is that we have not studied the relative success rates of founder-led versus agent-led disruptive initiatives. All we can say on the basis of the analysis we have done so far is that the relative incidence of successful founder-led disruption is higher than for agent-led disruption. Just who has a better batting average we can’t yet say. For unfortunate but understandable reasons, data on failed business creation efforts are hard to come by.

11. Clayton M. Christensen, Mark Johnson, and Darrell K. Rigby, “ Foundations for Growth: How to Identify and Build Disruptive New Businesses,” MIT Sloan Management Review, Spring 2002, 22–31. We are grateful to Darrell Rigby for pointing out the possibility that an engine of growth might be created.

12. A good tool to use in this budgeting process is called aggregate project planning. Steven C. Wheelwright and Kim B. Clark described this method in their book Revolutionizing Product Development (New York: Free Press, 1992). Their concept has been extended to the corporate resource allocation process in a course note by Clayton Christensen, “Using Aggregate Project Planning to Link Strategy, Innovation, and the Resource Allocation Process,” Note 9-301-041 (Boston: Harvard Business School, 2000).

13. See Rita G. McGrath and Ian MacMillan, “Discovery-Driven Planning,” Harvard Business Review, July–August 1995, 44–54.