Engineered

Review of "Turning Point: Policymaking in the Era of Artificial Intelligence"

I recently read this book, by Darrell West and John Allen, respectively a Vice President and the President of the Brookings Institution. It was a little dry and numbers-heavy but there were some interesting chapters. I particularly liked their comments on the trends re: car insurance (basically they argue that with the advent of driverless cars, car insurance should go down [p.72], although I think that insurance companies will make up for it in the home insurance premiums), and also I was fascinated by the discussion about the zoning rules and congestion p.96. It is a really great point that vehicles like Amazon Prime delivery trucks put more wear and tear on the roads and they also bring with them a whole range of issues from double-parking to storage issues to parcel theft to apartment buildings that have no loading dock. I enjoyed thinking about the environmental impact of truck delivery as well as the joint warehouse and distribution optimization problems to meet customer needs. Also I had never heard about the freight master plan in Seattle but it is indeed a thing! You can read more about it here. Rating: three stars out of five, which on Goodreads scale means I liked it (enough).

Review of "Tribal Leadership"

 I picked up Tribal Leadership: Leveraging Natural Groups to Build a Thriving Organization by David Logan, John King and Halee Fischer-Wright at Half Price Books the other day, and it was a very interesting read. The authors argue there are five stages for employees:

• Stage 1 is aggressive hostility (“life sucks”, needless to say most of those people don’t last long, or are unemployed more than they’re employed),
• Stage 2 is apathetic passivity (“my life sucks” where people don’t put in their best effort for the company that employs them for various reasons),
• Stage 3 is “lone warrior ethos (“I’m great… but you’re not”)
• Stage 4 is the stage to aim for (“we’re great”, where a company doesn't name a rival as an adversary but, say, a disease it wants to eradicate, like cancer or poverty)
• Stage 5 is basically worldwide enlightenment or what the authors call innocent wonderment (“life is great”).

I liked a lot the advice the authors give to help managers guide employees toward a higher stage. To move a Stage 2 person toward Stage 3, introduce that person to a Stage 3 employee, who will typically enjoy mentoring people to make them more like himself or herself (but won’t want them to become more successful than him/her). In other words, create dyads (groups of two people). To move a Stage 3 person toward a Stage 4, introduce the Stage 3 employee to two people, i.e., create triads. Note that you shouldn’t do that too early, i.e., don’t try that with a Stage 2 person.

I just loved the concept of triads, and started thinking about triads in academia. (The authors say their concepts apply to higher ed, but the two examples they give are USC’s Steven Sample and Stanford’s David Kelley.) Because a tribe is typically 50 to 150 people, a university is often a tribe of tribes, where each school is a tribe and the Deans are the Tribal Leaders.

Traditional higher ed is organized in terms of dyads: for instance, the student comes to see the professor in office hours, or for a research meeting, or even in class the exchange of information is from the teacher to the student even if many students are in class at the same time. It seems that a lot of universities are at Stage 2 or 3. But triads offer the opportunity to do something quite innovative in academia.

An obvious example is team-teaching, but it is more complicated than having Professor 1 teach the first half of a course and Professor 2 the second half (this would be a succession of dyads.) What has to happen is that the two professors interact with each other so that their thinking and teaching is affected by their interaction.

This would be also true of a student double-majoring who is assigned an advisor in each major: the traditional model would be of two dyads, but a triad model would allow the student to get the most benefit from the double major because the two advisors would also interact with each other. Another triad would be of a student with an advisor in the major and an advisor for the core curriculum (the curriculum every student has to take no matter which major he chooses.)

Because each school is basically its own tribe, there would be great value in having triadic relations across schools: for instance, the Dean of the Graduate School introducing two professors from different schools to each other. Some grant programs require at least two principal investigators, each from a different department, but if it is only those two it is a dyadic relationship. Cluster hires are most meaningful when they can introduce people from different departments and schools to each other. Other triadic relationships would include an undergraduate student, a graduate student and a faculty member on a research project. An interesting comment the authors make is that Stage 4 leaders they have met typically only have meetings with 2 or more other employees: they don’t “waste their time” with one-on-one coffee chats anymore, for instance. Instead, they prefer playing “matchmakers”. The authors also argue that Tribal Leaders should first elucidate what the tribe stands for (values) and what it lives for (noble cause).

I do think the authors could have explored some topics in more depth. For instance, what do you do when management thinks the company is at a Stage 4 when most employees are actually at Stage 2? There would have been a good opportunity to explore resonant vs dissonant/delusional leadership. Also, a key concept in the book is tribal pride, but it is not explored in any detail at all. How many managers think of their work as giving their employees a reason to feel proud about their company? It seems to me that a lot of Stage 2 employees are at Stage 2 precisely because they think their job and their company is nothing to be proud of. A manager who doesn’t try to see the situation from his employees’ eyes, thinking “what are they proud of when they come to work?” is probably not excelling at his job, because he’s not thinking about how to get top loyalty from his people.

The book also has a helpful “cheat sheet” in Appendix A that goes over the key features of each stage and the leverage points of managers to upgrade tribal culture.

Overall, a very worthy read!  

Review of "Designing your Work Life"

Recently I picked up "Designing your work life" by Bill Burnett and Dave Evans at my local bookstore. I'd read "Designing your life" when it first came out and had been unimpressed by it, for the reasons that the authors give in writing a second book: the first book was probably helpful for people willing to start over with a completely blank slate, but for people already in jobs and careers, it was not particularly useful. Much to my surprise, Designing your work life turned out to be an excellent read that exactly met the needs that the first book did not fulfill. I would for instance recommend it to graduates who are a few years out of school and are wondering about their next step, but it can also be used by mid-career professionals ten or fifteen (or twenty!) years out of school.

The book contains so many nuggets of great advice it is hard to know where to begin, so I will just provide an overview of the chapters, and interested readers should get the book and read the whole thing. 

1. Chapter 1 is about the concept of good enough for now ("when we live our lives waiting to get somewhere, the only place we get is stuck"). A Stanford professor once said, "Never confuse the quality of a decision with the quality of the outcome - they are two different things." Further, there is a distinction between reframing and renaming. The key is to "have a bias to action but set the bar low, clear it, then do it again." Generally, the book advocates to only quit in a burn-the-bridges-way as a last resort. The authors recommend keeping a Good Work Journal to notice what energizes you at work and puts you in a state of flow, and reflecting weekly on the previous seven days.
2. In Chapter 2, the authors talk about the Coherent Life, combining Workview (the set of values you use to define good work) and Lifeview (what makes life worthwhile). They argue that it is often not possible to find your passion and get paid to do it. Instead, you need to evaluate your life and your work according to three dimensions: money, impact and expression.
3. Chapter 3 is about reframing problems into Minimum Actionable Problems that you can work on. (Ask yourself what is going on, and then ask yourself what is really going on.) For instance, instead of saying the problem is that your boss is "just a jerk", a way to reframe the problem would be to say "my boss rarely gives positive feedback, so how might I receive explicit appreciation for my work from someone else in my organization?" You have to be careful not to embed one of your preferred solutions into the problem statement, for instance hinting that spontaneously given feedback is the "good" kind.) Then the authors introduce the concept of Best Doable Option. ("Many of the really hard problems in life are best treated as multiple choice tests. You don't really have to figure it all out -- all you have to know is enough to choose.") Other concepts are anchor problems (where the problem is defined as one of the preferred solutions from the start, keeping the person stuck) and gravity problems (where there is nothing the person can do.)
4. Chapter 4 is about overwhelm. There is an interesting test about burnout at the beginning of the chapter. The authors present three flavors to overwhelm: Hydra (everyday overwhelm where you have too much on your plate), Happy Overwhelm (you love everything you're doing but need to delegate more) and Hyper Overwhelm (where you basically build the plane and try to fly it at the same time).
5. Chapter 5 is about mindset, grit and the ARC of your career, where ARC stands for Autonomy, Relatedness and Competence.
6. Chapter 6 is about power and politics, and argues that employees can learn how to succeed by learning how to manage influence, authority and power. The chapter includes an interesting influence x authority matrix.
7. Chapter 7 argues against resigning (if the job is not a great fit) and advocates for redesigning one's job instead. This would probably be my top recommendation as a chapter to read for graduates thinking about a job change. The authors explain: "Before you quit, make sure that you have maximized all of your available options in place where you work. The better job (or gig) you seek may be the one right next to you." They offer 4 possible strategies: reframe and reenlist, remodel, relocate or reinvent.
8. Chapter 8 is about quitting well, because that is sometimes necessary, in spite of the authors' earlier advice. That would be my third recommendation as a chapter for graduates to read, if they are considering a job change. (My second recommendation is the following chapter, Chapter 9.) Instead of a bridge-burner approach or a two-week-lame-duck approach, the authors advocate a generative-quitting approach, where basically you set up your successor for success and leave the company on good terms. In detail: leave the campsite better than you found it, rev up your network, set up your replacement to win and exit well.
9. Chapter 9 is about moving on, aka the job search for another job. (Second-best recommendation.)
10. Chapter 10 is about becoming an entrepreneur and being your own boss. There is a lot of excellent advice about prototyping and the customer's journey map.

All in all, a great read, highly recommended!  

Review of "Bad Blood"

 It is hard to put in words how good "Bad Blood" by John Carreyrou is. Of course I knew about the Theranos scandal (who doesn't, given the notoriety of founder and CEO Elizabeth Holmes, Stanford dropout and first female tech billionaire?) and I had heard that the book by the WSJ journalist who broke the story was getting excellent reviews but since I am not in the health tech sphere and have many projects on my hand, I had postponed buying the book. Then on a trip to Europe I watched on a plane the HBO documentary that was made from "Bad Blood", which was good but not great, and while I was browsing titles at the newsstand before my return trip back to the States I stumbled upon a pile of "Bad Blood" paperbacks.

A couple of incidents had caught my attention in the documentary, especially the suicide of Ian Gibbons and the treatment of whistleblower Tyler Shultz (grandson of former Secretary of State George Shultz who was a Theranos backer and Holmes supporter). Tyler Shultz was hounded by Theranos's lawyers after they matched some numbers Carreyrou had used in an email to an internal email Tyler Shultz had sent Elizabeth Holmes detailing his concerns, and his parents raked $400k in legal fees to defend him. There is also the part at Stanford where a female professor turns Holmes down, realizing correctly her idea is unrealistic, but Holmes manages to convince a superstar male professor who thought the world of her. And the many faked demos in front of investors. And the diluting of blood to make it possible to run all the tests that Holmes wanted from a few drops of blood, which led to widely fluctuating results and false health scares for some patients. And the callous way employees were treated, both by Elizabeth and by her boyfriend Sunny, 20 years her senior, because they required complete loyalty from everyone. And, and, and. I picked the book to read some excerpts about the parts of the documentary that had most caught my attention during the flight. I didn't think I would read the book cover to cover in one transatlantic flight. I was wrong. It turns out the book is as impossible to put down as what Bill Gates says in his blurb on the back cover. 

The Theranos story is a cautionary tale about chasing the next breakthrough and trying to bend reality to one's will in the pursuit of a perhaps-impossible goal, and also about fitting too neatly media narratives. I think that Holmes truly believed in her idea (the book suggests that it's because she didn't take many chemical engineering classes before she dropped out of Stanford) and found very positive reception for her company among some investors and the media because people loved the idea of a young female tech billionaire. She wanted to be the next Steve Jobs, even going as far as imitating his wardrobe (on the advice of another employee) and like him she could exert an almost magical influence on people around her. Once, early on, someone brings concerns about the machines that are supposed to do the blood tests to the board and the board decides to remove Holmes but then she talks to them for hours and manages to make them change their mind. Her powers of persuasion were truly Jobs-like, perhaps because investors wanted to have found the next Steve Jobs, and so it almost became a self-fulfilling prophecy. But Steve Jobs always had a product to show on demo day. He didn't need to rig the machine to make it look like the test was taking a really long time, in order to convince the investor to go outside so that an employee could retrieve the blood test and run it in a commercial machine.

Holmes comes across as someone who genuinely thought that her great product was just around the corner and everything would work out if she could just buy herself more time. She might have thought that she had truly groundbreaking ideas because she was a college dropout unimpeded by professors' sclerotic beliefs of what was possible and what was not. Perhaps she even believed herself when she told a journalist (Charlie Rose?) after the WSJ accusations surfaced: "First they think you're crazy, then they fight you, then you change the world." (The documentary has a brief interview with a doctor who clearly is part of the established order and has no interest in letting patients order or look at their own test results. This made me wish Theranos had succeeded in changing the world. There was a lot of truth in her quote. But it doesn't change the fact that Theranos was built on hot air.)

Real people were impacted by the Theranos mirage, from the Walgreens customers who believed their test results and ran to the ER for treatment to the employees who hoped to be part of the next Google or Facebook and instead witnessed this staggering lapse in ethics. Inventors like Edison faced a lot of failures before succeeding, and he is often cited as example to young inventors who think about giving up. Then there is also the quote, whose author I forget, that says (I paraphrase) that if you encounter a wall you should go over it, or around it, or under it, and the audience is supposed to start clapping at the can-do atmosphere of it all. Well, (cue thoughtful music here for the wisdom of the day) sometimes a wall is a wall and you're just going to keep hitting your head against it until you admit you have hit a dead-end and it is time to backtrack and get out of there. Or maybe another intermediary invention will help bridge the gap between the reality and the vision. Society didn't go straight from horse-drawn carriages to space shuttles. Maybe a small improvement on the current blood testing machines can be achieved, and then another one. This, of course, will fail to enthuse any venture capitalist looking for the next transformative breakthrough. Holmes became a (paper) billionaire because she fitted a narrative that society approved of, and because so many people wanted to be actors in that story, from startup employees looking to make history to Walgreens worried about CVS hatching a deal before them to venture capitalists eager to help the earnest young woman in the black turtleneck who reminded them of Steve Jobs - FOMO on a grand scale.

Perhaps Holmes worried her idea would not work. That could be why her board of counselors had no one with scientific expertise on it: so that no one with credibility could tell her what she did not want to hear. Yet it is to Holmes's credit that she tried to revolutionize health care. Facebook, Google, Apple - they are all tech or data companies. If your product or software update doesn't work as well as it should, it is unfortunate but it is not a death knell. Health care is a different beast. And perhaps in health care we need inventors with actual science degrees to better discern what is high-risk from what is unattainable before gullible venture capitalists get taken in by a sales pitch. But we already have some such inventors, including female ones. Anne Wojcicki, ex-wife of Sergey Brin, who is the co-founder and CEO of personal genomics company 23andMe, graduated from Yale in 1996 with a degree in biology, and did molecular biology research at the N.I.H. and U.C. San Diego. There have been some accuracy concerns and privacy concerns around 23andMe, so I don't mean to pretend that 23andMe is perfect, but it has been receiving FDA approval for some health-related tests and entered a four-year partnership with GlaxoSmithKline in 2018. I just mention it to show that we already have some talented female entrepreneurs forging new paths in health, and some who deserve a lot more the media attention that Holmes got.

Carreyrou's book, which won the FT/McKinsey Business Book of the Year Award 2018 and was named a best book of the year by NPR, the New York Times Book Review, Time, Wall Street Journal and the Washington Post, deserves all its accolades. 

Review of "Broad Band"

So I finally finished reading Broad Band: The Untold Story of the Women who Made the Internet, by Claire Evans, which I had gotten in hardcover when it came out last year for International Women's Day. I had started reading it back then and given up around Chapter 2, but this time around I found it somewhat more interesting than I remembered and managed to read the whole thing. This is not a page-turner. This is not Human Figures or The Rise of the Rocket Girls or The Girls of Atomic City or Code Girls because there is no central, specific goal to a main group of protagonists that we would follow through the book to see if they manage to vanquish obstacles and achieve their objective. Instead, the book is a collection of chapters about disparate topics and an assortment of women who come across as very minor characters in making the Internet, except the women who worked on computing during World War II.

Each chapter covers a part of Internet history so quickly we don't have much time to relate to the women at the center of the chapter. Also, the book unwittingly reminds us of the speed of change because a lot of the websites and social networks that were so prominent in, say, the 1990s are completely forgotten now, and with them the people who helped create them, and I didn't like how the author injected herself in the story at times. This is not about her. We are also treated to all the predictable reactions to having women in technology, for instance when a man mistakes one of the female programmers for a secretary, or in a subplot when women are able to rise to posts of prominence until their company the Eckert-Mauchly Computer Corporation is acquired by Remington Rand and the new company isn't used to having women who are not secretaries, see p.61. (The fact that those are predictable doesn't take away from the women's struggles, but to give power to something predictable you need to spend more time with the characters so that the reader will really feel the shock of what it meant for that specific woman under those specific circumstances to be treated that way.)

Occasionally the book hits the sweet spot, for instance at the beginning when the author talks about computer scientist Grace Hopper, one of the first programmers of the Harvard Mark I computer who also helped develop the COBOL language (a woman whose ex-husband married one of her close friends who had been bridesmaid at her wedding, a woman who struggled with alcoholism later on in life), or a bit later about Jake Feinler (a woman) and her work on ARPANET. I did like the chapter about communities too such as Echo and WIT, although now those communities are obsolete. My favorite part was the black-and-white pictures of the time, which I admit is faint praise for a book.

The book is best suited for women in computer science who already know about many of the inventions in the field and will enjoy tidbits of information about the women who helped create them, but there are more interesting books on similar topics out there.

Book review: "Leadership" by Doris Kearns Goodwin

I ended up loving this book. I wrote about it in a previous post because an excerpt was published in HBR and I also attended Doris Kearns Goodwin's talk at Temple Emanu-El when she stopped by Dallas while on book tour for it, but I found the HBR excerpt gimmicky, since it was attempting to translate Lincoln's transformative leadership about the Civil War and the Emancipation Declaration into nuggets of wisdom for the much smaller and triter challenges HBR readers face. But now that I've read the entire book itself, I can say it is done just perfectly. 

The book discusses the lives and defining leadership moments of four U.S. presidents: Abraham Lincoln, Theodore Roosevelt, Franklin Delano Roosevelt and Lyndon B. Johnson. The book is divided in 3 parts: "Ambition and the recognition of leadership", or each president's early years, "Adversity and growth", and finally "The Leader and the times: how they led", which contains episodes of leadership broken down in nuggets packaged for broad consumption by HBR's readers or likeminded history buffs. Lincoln's chapter, excerpted in HBR, focuses on transformational leadership. Theodore Roosevelt's exemplifies crisis management and discusses the Coal Strike of 1902, which I hadn't heard about before but provided such an excellent example of what farsighted leadership could achieve. FDR's was, naturally, on the Hundred Days as an example of turnaround leadership. Finally, LBJ's was on visionary leadership and the Civil Rights.

Each part contains four chapters, one for each president. Their life stories differ widely but what I liked most about DKG's narrative is her emphasis on their years of struggle, depression, defeat - their crossing of the desert so to speak, the moment in their career where it did not look like they would become what we now remember them as. Nowadays people try to package themselves as success stories from start to finish, as if never struggling for what they wanted was a mark of success. But it is worth asking if people who live charmed lives have tried enough to live at their edge and contribute to society to the fullest of their abilities. The only people who never fail are the people who don't take a risk. Some of those times in the wilderness that DKG describes lasted several years, not months. I'm not sure if we would tolerate this nowadays, but the example of those very accomplished presidents certainly served as an eye-opener. 

I found myself most interested in the chapters about history I knew the least, in particular Theodore Roosevelt. His handling of the coal crisis was a page turner for me. But throughout DKG delivers value again and again by analyzing in-depth and play-by-play history-defining policy changes, from the Emancipation Declaration (which I naively thought had been enacted because it was the right thing to do, but in fact had been enacted to deal a fatal blow to the Southern landowners, who so far had been able able to participate in the Civil War without worry because they knew their lands were well tended for by their slaves in their absence) to the Civil Rights Act. Thanks to DKG's guidance, we are treated to a dissection of those major policy changes and better understand how change on such a large scale found its way through massive opposition and ultimately transformed the country. While the sections' headers in Part 3, made for C-Suite executives interested in leadership, sound at time a little trite, the lessons to be gained from those four great presidents are very real. 

The epilogue goes over the end of the four leaders' presidencies and, for the two who did not die in office, the time after the presidencies. There is no sugar-coating it: everything after the White Office seemed a bit of a letdown. DKG experienced those times first hand when she helped LBJ with his memoirs after he returned to Texas and had to grapple with his complete loss of power. 

"The Launch Pad: Inside Y Combinator"

If you care about startups, entrepreneurship and innovation, you have to read "The Launch Pad: Inside the Y Combinator" by Randall Stross. The book follows (some of) the startups selected in the Summer 2011 batch of Y Combinator, Paul Graham's Silicon-Valley-based startup accelerator. (And if you care about startups, entrepreneurship and innovation, you don't need me to tell you who Paul Graham is. But if you have arrived at this page because of some other post I wrote, say in healthcare, you might want to know that Graham is an English computer programmer and venture capitalist who co-founded Viaweb, later sold to Yahoo! Y Combinator is said to be the best, or the second best if you ask its main competitor TechStars, startup accelerator in the country. Graham is also an essayist, majored in philosophy at Cornell, studied painting after college and got a doctorate in applied sciences from Harvard, concentrating in computer science.)

What I loved about the book is that it is strongly story-driven with compelling characters - Stross explains well what the various startups are about, but he doesn't get bogged down in technical details (although he could have, given the strong focus of Y Combinator on "hackers"). Instead, he is more interested in showing the dynamics between teams or with Y Combinator's partners, and the reader gets as close as a book can bring to experiencing the summer leading to Demo Day, and to benefitting from Graham's insights. In particular, I felt the book would be particularly relevant to would-be entrepreneurs who not only want a taste of what to expect in startup accelerators, which have been sprouting all over the nation, but also are curious about Graham's thought process, because in that business what matters most for the mentors is to be asking the right questions.

Great read, highly recommended.

Book review: "Decisive" by the Heath brothers

Some time ago I read “Switch: How to Change Things when Change is Hard” by the Heath brothers (Chip and Dan) and reviewed it on this blog. My post started as follows: “Here is my one-sentence review: The book is so good I feel sorry the authors have to sell it at the same price as the other hardcovers out there. If that's enough to convince you to give it a try, great. Otherwise, read on.”

I wasn’t quite sure I’d like “Decisive” as much. I felt that the topic (how to make better decisions) was less original, the green cover of the book is simply hideous, and the introduction, which I’d read before the release date, just didn’t grab me. But the preview I got included Chapter 1, not just the introduction, which meant I got to read the story about the brown M&Ms that a rock star had set as a “tripwire” for his national tour (to figure out whether people had read the contract full of technical specs he’d made them sign, with severe safety implications for his crew) and “Switch” was truly very good. So I bought the book.

And enjoyed it immensely. Now, for me “Switch” was a six-stars-out-of-five sort of book, and “Decisive” doesn’t rise to that level, but I give it a solid five stars nonetheless. I still had that feeling of being sorry for the authors that they have to sell their books at the same price as the other hardcovers out there, especially the puffed-up magazine pieces that find their way into bookstores these days. Also, while the topic of making better decisions has received significant attention, the Heath brothers do manage to give fresh insights and make the reader re-think his or her approach to looming big decisions ahead. In other words: “Decisive” is a much-needed book, and it delivers.

The book is centered on a 4-step framework to avoid common unconscious biases in decision-making: the WRAP process. (They’re business experts. Of course they had to have an acronym for their method.) Below I provide the four parts of WRAP and keywords for some (but far from all) ideas that the Heath brothers give in their book:

• Widen your options
  • Think AND not OR
  • Run the “vanishing options test” (if the options you’ve thought about so far weren’t available/allowed, what would you do?)
  • Toggle between the promotion and prevention mindsets (if you had suddenly more time/money, how would you spend it? what if there was a severe cutback?)
  • Find someone who has solved your problem
• Reality-test your assumptions
  • Ask disconfirming questions
  • Consider the opposite
  • Zoom out: respect the base rates (for instance in a medical situation: what are the averages?)
  • Zoom in: take a close up (for instance, the reviews on a website like Yelp might be summarized into a lackluster average, but if you analyze them more carefully, you may realize people either love or hate the restaurant for specific reasons that may not be relevant to you)
  • “Ooch” into it (as in: lean into it, although the authors caution against “emotional tiptoeing”, which is used to delay commitments)
• Attain distance before deciding
  • Try 10/10/10 (how will you feel about it in 10 minutes? 10 days? 10 months?)
  • Fight the “status quo bias”
  • Shift perspectives to gain distance (imagine it’s not you but your best friend who has to take the decision – what would you tell your best friend to do? And at work, imagine you’ve been replaced and ask the “Andy Grove question”: what would your successor do?)
  • Identify your core priorities to resolve dilemmas (what would an outside investigator conclude about your priorities by reading your calendar?)
• Prepare to be wrong.
  • Create a “realistic job preview” (what are problems people in this situation often encounter?)
  • Set a tripwire (for instance a deadline by which something must have happened, or you’re switching to Plan B)
  • Run a premortem and preparade (you’ll have to read the book to understand what that means)
  • And more!

If you’re still on the fence regarding the book, you can download free resources to make better decisions by signing up on the Heath Brothers’ website. I can attest that they email their list very rarely, and only with relevant information, so readers definitely get the best of that bargain, given the great resources – podcasts and summary sheets – available for download upon registration. (It’s because I had signed up after I read “Switch” that I got a sneak peek into “Decisive”.) SSIR - Stanford Social Innovation Review - also has an excerpt of the book here.

In summary: “Decisive” is not quite as earth-shattering as “Switch,” less profound research, but far better than 99% of the business books out there.

Book Review: "The Innovator's Solution"

Today's post is about "The Innovator's Solution" by Clayton Christensen and Michael Raynor, a book I read several weeks ago and have been wanting to write a blog post on ever since.

Readers interested in innovation will most likely have heard of "The Innovator's Dilemma", Christensen's 1997 best-seller that presented his theory of disruptive vs sustaining innovation. I tried to read it but didn't care for it. The high-tech examples, although surely fascinating in their day, are now hopelessly outdated. (There is only so much of relevance today in the hard-drive disk industry of the early 1990s.)

Overall I felt The Innovator's Dilemma could be convincingly summarized in a magazine article - or maybe even just a few pages, as Christensen and Raynor do early in the present book.The beginning of Chapter Two will tell you everything you need to know about disruptive innovation, and emphasizes the importance of the circumstances of innovation to predict whether incumbents or new entrants will prevail. In particular, "in disruptive circumstances - when the challenge is to commercialize a simpler, more convenient product that sells for less money and appeals to a new or unattractive customer set - the entrants are likely to beat the incumbents." Figure 2-1 p.33 ("The Disruptive Innovation Model") and the case study starting on p.35 [of the hardcover edition, I don't think the book is available in paperback - Harvard Business Review Press knows how to keep its margins!] about the minimills, which upended integrated steel companies, convincingly illustrate Christensen's theory.

In contrast with the earlier book, which "summarized a theory that explains how, under certain circumstances, the mechanism of profit-maximizing resource allocation causes well-run companies to get killed", The Innovator's Solution focuses on how companies can "create the right conditions, at the right time, for a disruption to succeed." I was pleasantly surprised by how informative it turned out to be. Below are the points that I found most valuable when I read the book. (I left out plenty of great insights.)

In Chapter 2, Christensen and Raynor distinguish between new-market disruptions, i.e., "disruptions that create a new value network" (defined elsewhere as "a particular market application in which customers purchase and use a product or service") and low-end disruptions, which "attack the least-profitable and most overserved customers at the low end of the original value network." That chapter also offers three sets of questions to help managers determine whether an idea has the potential to become disruptive (see p.49-50). At a high level, these questions seek to identify whether the idea can be turned into a new-market disruption or a low-end disruption, and whether it will be disruptive to all the established players in the targeted market. 

In Chapter 3, the authors make the fundamental argument that "customers "hire" products to do specific "jobs"", and that therefore companies should segment markets according to those jobs and not according to the characteristics of the product. Since many retail channels are attribute-focused, many successful new-market disruptors have had to identify new channels to reach the customer.

Chapter 4 elaborates on the "jobs question" by investigating how to know whether current non-consumers could be enticed to begin consuming. In the authors' words, "a product that purports to help non-consumers do something that they weren't already prioritizing in their lives is unlikely to succeed." Christensen and Raynor also emphasize the importance of reframing disruption as an opportunity rather than a threat, which usually requires placing the disruptive idea in a new, independent unit of the organization for which it will represent pure opportunity.

Chapter 5 explains when the company should use a proprietary product architecture and when it should use modular, open industry standards (in other words: when to outsource and when not). Product architecture is defined as the set of components that represent the product and the way they must fit and work together to achieve the desired functionality. The chapter also discusses interfaces and interdependent vs modular architectures. (Because modular architectures don't exhibit interdependencies, those are the ones for which outsourcing is possible.) The best architecture depends on the limiting factor in meeting customers' needs; different choices are required if functionality/reliability are insufficient (in the early stages of a disruptive innovation) and if speed/responsiveness are the bottleneck factors.

In Chapter 6, Christensen and Raynor explain how to avoid commoditization. Their idea is that if commoditization is happening somewhere in the value chain, then decommoditization is happening elsewhere. Commoditization starts when the product sold by the incumbent becomes too complex for customers' needs and customers refuse to keep paying ever-increasing prices for it (a disruptive innovator then captures market share starting at the bottom of the customer base by producing a cheaper product that is not yet good enough for the top customers, but will soon be). The authors describe the six steps of the commoditization process in detail starting on p.151. The parallel process of de-commoditization is described on pp.152-3 using the example of the steel minimills and summarized starting at the bottom of p.153.

Chapter 7, "Is your organization capable of disruptive growth?", makes the distinction between right-stuff thinking and circumstance-based theory to pick the right people to manage a venture. Using the right-stuff thinking theory, companies should recruit employees who exhibit right-stuff attributes such as "good communicator", "results-oriented", etc. The authors prefer the circumstance-based theory due to someone named Morgan McCall, which views business units as "schools" and the problems encountered as the "curriculum" that potential hires have been through. In this way of thinking, managers who have worked in stable business units in the past haven't taken the "courses" to start a new plant and so would probably be weak in such a task, and the key to successfully staffing a new venture is to examine managers' prior experiences. I enjoyed reading the case study about Pandesic, a promising joint venture between Intel and SAP that ended in a costly failure.

"Managing the strategy development process" is explained in Chapter 8. The two main processes are called deliberate and emergent. Deliberate strategy-making uses a careful analysis of extensive amounts of data and is implemented top-down. An emergent strategy "bubbles up from within the organization". It often results from "tactical, day-to-day operating decisions" (see the example of Sam Walton and Wal-Mart). Table 8-1 on p.228 explains the discovery-driven method for managing the emergent strategy process.

Chapter 9 discusses funding issues, and in particular how the type of money used to fund a venture will affect its prospects because it defines the investor expectations that the managers will have to meet. Christensen and Raynor recommend a "patient for growth but impatient for profit" approach in the early states of a new business. The "death spiral" from inadequate growth is presented starting at p.237. 

Finally, the role of senior executives in leading new growth is described in Chapter 10 and the epilogue contains a summary of the authors' advice in thirteen points starting on p.288.

I found The Innovator's Solution to be packed with insightful advice and highly recommend it.