Book report: ‘The Innovator’s Solution’

This is my homework for my “Saving Journalism” class.

       The Innovator’s Solution” explains how grooves become ruts – and how to climb out of the holes.

            According to authors Clayton M. Christensen and Michael E. Raynor, success leads companies to continue building on their past. This blinds them to other markets and opportunities.

            And when these opportunities are perceived, companies make one or two major mistakes: They try to grow too fast, or they pursue a hybrid strategy. Combining the old and the new results in little satisfaction to anyone.

Companies build on the past by focusing on serving the same customers better, based on the same types of performance. But following only one trajectory eventually leads to products that don’t fit the needs of many people. The product exceeds needs in some respects, but it is not good enough in other aspects.

Newspapers are good at giving a daily overview of events, trends and issues. For the people who say they “don’t have time” for the paper, we are too good – we give them too much information.

For them, we are not good enough at editing, or customization.

            But if we cut the paper to 20 pages, we would anger many loyal readers, who expect depth.

            The key is a two-prong strategy: Build on current success while also developing new products for underserved markets, which offer more long-term potential.

Starting with a “good enough” product serving the low end or current nonconsumers enables a company to eat its way up the value chain, serving more-profitable customers at each level.

             To serve these new markets, we need to broaden our thinking past “better” and “cheaper.”

            We need to think about what people already do or want to do, and how we can better help them accomplish their “jobs to be done.”

            People want to find out specific information, and it can take them a while to find it. So, we could become a community’s reference librarian, by giving residents a more direct question-and-answer service. This would mesh our abilities with their needs.

            But fulfilling new jobs to be done presents competing priorities.

Employees try to determine what the boss really wants. Their rewards remain geared to old ways. Middle managers tend to shape ideas to make them more like those that have succeeded in the past. Marketers try to sell new types of products to old audiences, with old methods.

            So autonomous units are needed. You can’t disrupt yourself.

The independent units are more flexible to different measures of success and to different channels to reach the different market.

Newspapers use too-narrow marketing for their new products. To reach nonconsumers, we need to promote in places outside our own products and usual venues.

We need to not only expand the marketing, but consider its best placement. This is normally done with market segmentation based on demographics. But Christensen says it is better to consider the circumstances of the customer when they are trying to accomplish the “job to be done.”

The News & Observer has been expanding, including letting people use it to share photos. So the paper should consider circumstances under which people want to share photos. Parents like to show off their children, so maybe The N&O should market this to parents at events such as school plays and Little League games.

            Autonomy also helps branding, so people can clearly identify the new product. When Kodak introduced its disposable camera, it used the name “Kodak Funsaver.” This combined the best aspects of the old and the new.

            Similarly, The N&O used the name Nando for an early newspaper Web site. And it could resurrect and reshape The Raleigh Times, a former afternoon paper it once owned.

            But as they pursue new strategies, news organization should be wary of over-committing.

            Companies put a lot of time and money into a new product. They want to make it perfect, for maximum appeal. But a rival beats them to market. Or they learn customers don’t even want it.

            Instead, they should experiment more and test products in the market sooner.

            Christensen preaches that companies should be impatient for profit but patient for growth. Instead of pouring too many resources into the wrong strategy, invest a little to learn a lot.

Published in: on October 23, 2007 at 9:51 am  Leave a Comment  
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