The Innovator’s Dilemma meets the Sales Dilemma !

 There are tens of thousands of business books published each year.  Some provide useful new insights, but most repeat the obvious in new fonts, colors and charts.  However sometimes a book or theory comes along that wakes you up and provides an amazing new perspective into building and managing companies.  The Innovator’s Dilemma by Clayton Christensen  tops my list as one of the most influential and relevant modern business books.   During my time as head of corporate strategy @ SAP I had the privilege of engaging with Prof. Christensen and came to respect even more the timeless nature of his thinking.

As a quick refresher the Innovator’s Dilemma asserts that incumbent companies can only do “sustaining innovations” as they seek to protect their existing customer base, margins and business models.  “Disruptive innovation” comes about when new entrants develop technologies that initially target markets that are unattractive (eg. smaller markets, lower margins, simpler products) but over time that innovation moves up to the higher-end and eventually dislodges the incumbent.  This has happened over and over again.  On demand/SAAS software is a recent example in the technology industry.

There are several other notable books that have over the years have made significant contributions to our thinking – for those short on time and attention span may I suggest you read “The 100 Best Business Books of All Time”   to get a crash course in business strategy and insight.

The purpose of this blog post is not to explain the Innovator’s Dilemma nor is it to provide my views on the merits of various business books.  Rather the intent of this post is to explore the impact of disruptive innovation on the go-to-market or sales channel strategy of a company.

For simplicity sake, let us focus on the software and technology industry as an example.   The pace of innovation is breathtaking – both by large incumbents but especially by start-ups.  The bulk of this innovation is what I would call product innovation – think iPad, smart phones,  chip and memory technology, voice recognition etc. 

In certain situations there has been a business model innovation – think software as a service, online advertising, and “freemium” (though this one I still have doubts about as the “premium” part often does not happen).

In a few cases there have been significant new advances in the sale/go to market models, mostly in the consumer space – think eCommerce (Amazon) , iTunes (Apple) , mail order movies (Netflix – now of course online).   In each of these consumer models companies were able to create new ways to access the customer – the person paying for the product.

So far so good.  Great new innovation, new business model and in some cases new sales channel for consumers.

So here is the challenge – there has not been much innovation in selling to the enterprise. Over the last couple of months I have met tens of companies and talked to them about a range of topics related to starting and running a disruptive business.  The overwhelming challenge faced by those seeking to sell to a business is not the new product they have developed, it is not that the product is difficult to understand, it is not that it take a long time to implement – rather the challenge is the enterprise sales process.

Especially with the heavy consolidation in the enterprise software industry the incumbents have a significant advantage that is not impacted as much by the pace of start-up  innovation – this is their direct distribution channel.

Is the “Sales Dilemma” overtaking the Innovator’s Dilemma ?  That is the Right Question…

As always, I welcome your comments and insights.



Introducing “The Right Question” – a new blog about technology strategy, ecosytems, design thinking and anything else that I care about..

After so many suggestions from colleagues and friends that I start a blog, I finally decided to give it a try – so here goes.  Though I have been an active consumer of user-generated content such as blogs, wikis etc. I have not been an active contributor until recently. 

I started becoming active on Twitter a few months ago and found that medium to be an amazing source of insight and knowledge from some very smart people. I enjoy the debate and dialogue on Twitter and wanted to continue that conversation beyond the 140 characters. 

Why “The Right Question” ? Well over the years I have come to learn that it is far more important in your personal and professional life to be able to ask the right question – preferably at the right time – than be always ready with the right answer. There are to many times where mistakes are made, billions of dollars lost, or in the worst case lives are lost, because there was a rush to judgement on the answer and to few people had the courage or insight to ask “The Right Question”.

I hope that thorough this blog, and with your active participation and input, we can together ask the right questions and direct these questions to the people around the world who surely have the right answers.

The topics I will choose to discuss will be varied, though a large portion will relate to the software and technology industry, to how we can design and build customer centric ecosystems, to the use of social media and mobile technology in the enterprise, to the importance of applying design thinking in all aspects of business and finally, to anything else I care about !

So with this short note I am pleased to launch “The Right Question” and look forward to many interesting discussions and debates with all of you as we explore our exciting collective future. 

Thank you and Best Regards,

Photo: Question Mark

%d bloggers like this: