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Index
IN GRATITUDE
CHAPTER ONE
THE GROWTH IMPERATIVE
Is Innovation a Black Box?
The Forces That Shape Innovation
Where Predictability Comes From: Good Theory
How Theories Are Built
Getting the Categories Right
The Outline of This Book
Notes
CHAPTER TWO
HOW CAN WE BEAT OUR MOST POWERFUL COMPETITORS?
The Disruptive Innovation Model
Disruption at Work: How Minimills Upended Integrated Steel Companies
The Role of Sustaining Innovation in Generating Growth
Disruption Is a Relative Term
A Disruptive Business Model Is a Valuable Corporate Asset
Two Types of Disruption
New-Market Disruptions
Low-End Disruptions
Shaping Ideas to Become Disruptive: Three Litmus Tests
Could Xerox Disrupt Hewlett-Packard?
Conditions for Growth in Air Conditioners
The Potential for Internet Banking
Appendix: A Brief Description of the Disruptive Strategies of the Firms in Figure 2-4
Notes
CHAPTER THREE
WHAT PRODUCTS WILL CUSTOMERS WANT TO BUY?
Pomp and Circumstances in Segmenting Markets
Using Circumstance-Based Segmentation to Gain a Disruptive Foothold
Innovations That Will Sustain the Disruption
Why Do Executives Segment Markets Counterproductively?
Fear of Focus
Senior Executives’ Demand for Quantification of Opportunities
The Structure of Channels
Advertising Economics and Brand Strategies
The Dangers of Asking Customers to Change Jobs
Notes
CHAPTER FOUR
WHO ARE THE BEST CUSTOMERS FOR OUR PRODUCTS?
New-Market Disruptions: Three Case Histories
The Disruption of Vacuum Tubes by Transistors
Angioplasty: A Disruption of Heart-Stopping Proportions
Solar Versus Conventional Electrical Energy
Extracting Growth from Nonconsumption: A Synthesis
What Makes Competing Against Nonconsumption So Hard?
Threats Versus Opportunities
How to Get Commitment and Flexibility
Reaching New-Market Customers Often Requires Disruptive Channels
Retailers and Distributors Need to Grow Through Disruption, Too
Customers as Channels
Notes
CHAPTER FIVE
GETTING THE SCOPE OF THE BUSINESS RIGHT
Integrate or Outsource?
Product Architecture and Interfaces
Competing with Interdependent Architecture in a Not-Good-Enough World
Overshooting and Modularization
From Interdependent to Modular Design—and Back
The Drivers of Reintegration
Aligning Your Architecture Strategy to Your Circumstances
Attempting to Grow a Nonintegrated Business When Functionality Isn’t Good Enough
Modular Failures in Interdependent Circumstances
Appropriate Integration
Being in the Right Place at the Right Time
Notes
CHAPTER SIX
HOW TO AVOID COMMODITIZATION
The Processes of Commoditization and De-commoditization
Core Competence and the ROA-Maximizing Death Spiral
Good Enough, Not Good Enough, and the Value of Brands
A View of the Automobile Industry’s Future Through the Lenses of This Model
Appendix: The Law of Conservation of Attractive Profits
Notes
CHAPTER SEVEN
IS YOUR ORGANIZATION CAPABLE OF DISRUPTIVE GROWTH?
Resources, Processes, and Values
Resources
Why Those with the Right Stuff Are Often the Wrong People
Processes
Values
The Migration of Capabilities
Selecting the Right Organizational Home for a New Disruptive Business
Creating New Capabilities
Creating Management Bench Strength
Making New Processes
Creating New Values
Buying Resources, Processes, and Values
The Costs of Getting It Wrong
Bank One’s Wingspan
F.W. Woolworth and Discount Retailing
Notes
CHAPTER EIGHT
MANAGING THE STRATEGY DEVELOPMENT PROCESS
Two Processes of Strategy Formulation
The Crucial Role of Resource Allocation in the Strategy Development Process
An Illustration of Resource Allocation in Strategy Making: The Case of Intel
Match the Strategy-Making Process to the Stage of Business Development
Managing Two Fundamentally Different Strategy Processes: A Rare and Tricky Skill
Points of Executive Leverage in the Strategy-Making Process
Create a Cost Structure that Finds the Right Customers Attractive
Accelerating the Emergent Strategy Process
Managing the Mix of Emergent and Deliberate Strategies
Notes
CHAPTER NINE
THERE IS GOOD MONEY AND THERE IS BAD MONEY
The Death Spiral from Inadequate Growth
Step 1: Companies Succeed
Step 2: Companies Face a Growth Gap
Step 3: Good Money Becomes Impatient for Growth
Step 4: Executives Temporarily Tolerate Losses
Step 5: Mounting Losses Precipitate Retrenchment
How to Manage the Dilemma of Investing for Growth
Use Pattern Recognition, Not Financial Results, to Signal Potential Stall Points
Create Policies to Invest Good Money Before It Goes Bad
Start Early: Launch New-Growth Businesses Regularly While the Core Is Still Healthy
Acquire New-Growth Businesses in a Predetermined Rhythm
Start Small: Divide Business Units to Maintain Patience for Growth
Demand Early Success: Minimize Subsidization of New-Growth Ventures
Honda: An Example of Forced Floundering
Insurance for When the Corporation Refocuses on the Core
Good Venture Capital Can Turn Bad, Too
Notes
CHAPTER TEN
THE ROLE OF SENIOR EXECUTIVES IN LEADING NEW GROWTH
Standing Astride the Sustaining–Disruptive Interface
A Theory of Senior Executive Involvement
The Importance of Meddling
Can Any Executive Lead Disruptive Growth?
Creating a Growth Engine: Embedding the Ability to Disrupt in a Process
Step 1: Start Before You Need To
Step 2: Appoint a Senior Executive to Shepherd Ideas into the Appropriate Shaping and Resource Allocation Processes
Step 3: Create a Team and a Process for Shaping Ideas
Step 4: Train the Troops to Identify Disruptive Ideas
Notes
EPILOGUE
Who? Me? Use Theory?
ABOUT THE AUTHORS
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