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Innovation: The Attacker's Advantage
Takes an aggressive approach giving managers at all levels the competitive edge they need for business survival and market dominance, including advice on predicting the market, offensive and defensive market strategies, investing, and increasing program effectiveness
- GenresBusinessNonfiction
320 pages, Paperback
First published January 1, 1986
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Displaying 1 - 2 of 2 reviews
April 4, 2015
The book’s intent is to describe how companies can manage innovation by managing technological discontinuities.
Criticism:
Classic, a little long, but required reading to manage innovation.
Deceptively simple. The s-curve is applicable to a wide range of phenomena that initially grow at a rate proportional to previous progress (exponential) and then approach a physical limit. The insight is the application of this lifecycle to the management of technology and innovation.
The book does not discuss the pros and cons of first-mover vs second-mover advantages. In contrast to Christensen (1997) does not distinguish between discontinuous (disruptive in Christensen) and sustaining or evolutionary technologies. However, the need to cannibalize existing businesses is a lesson ignored at your peril.
Synopsis:
The “s-curve”, a logistic curve, describes the relation between the performance (the ordinate) obtained from a technology and the effort expended (the abscissa) in developing it. The curve shows an early stage of slow growth in performance increasing as more research is completed and then decreasing growth in performance as the limits of the technology are achieved.
Term Description
R&D Return Return on a technical investment
R&D Productivity Technical progress from investment in R&D, influenced by the research team (an engineering function)
R&D Yield Return from a technical advance, function of the market and consumer preferences
R&D Multiplier Ratio of Investment to develop a product/ Investment required to make it and sell it
R&D Return = R&D Productivity x R&D Yield
Return on Capital = R&D Multiplier x R&D Productivity
The significance of the curve is that it is more difficult to obtain superior performance from a mature technology than from a developing technology, ie the R&D Productivity of a new technology is much higher (5:1) than that of a mature technology.
As a conceptual tool, the s-curve is useful in helping a company to understand how mature its product is. Monitoring the productivity of R&D helps to determine the maturity of a technology. Companies should estimate the theoretical maximum performance of their technology and compare current technical performance with that maximum.
Technological discontinuities occur when a new technology delivers the desired customer attributes in a different way. The new technology is represented by a second s-curve at a different stage of maturity. Replacement of the existing technology by the new technology occurs if the new technology can be developed along its own s-curve to the stage where is supplants the existing technology by delivering superior performance on one or more attributes valued by the consumer. The market may change rapidly to the new technology as soon as it has achieved superiority in one (or more) attributes valued by customers.
According to Foster, the attacker (the developer of the new technology) has the advantage because of the shape of the s-curve and the lack of sunk investment in existing technologies and channels. Foster suggests that seven out of ten defenses against attackers ultimately prove unsuccessful.
The terminology is confusing. The attacker is always the developer of new technology who may win the market from the provider of the existing technology. Yet Foster advises market leaders how to manage and develop new technologies to remain leaders (ie defend their position). However, he does say that unless market leaders are prepared to abandon the skills, products, culture, and organizational structure that made them leaders, and develop new technologies meet consumer needs better, then they will be supplanted by attackers.
Defenses against attackers include:
• Leapfrogging, adopting the second generation of the new technology after the attacker has developed the first generation
• Maximizing performance of existing technology
• Hybridizing new and existing technology
Technological cycles inevitable. Companies have to cannibalize existing and develop new if they are to stay ahead.
Criticism:
Classic, a little long, but required reading to manage innovation.
Deceptively simple. The s-curve is applicable to a wide range of phenomena that initially grow at a rate proportional to previous progress (exponential) and then approach a physical limit. The insight is the application of this lifecycle to the management of technology and innovation.
The book does not discuss the pros and cons of first-mover vs second-mover advantages. In contrast to Christensen (1997) does not distinguish between discontinuous (disruptive in Christensen) and sustaining or evolutionary technologies. However, the need to cannibalize existing businesses is a lesson ignored at your peril.
Synopsis:
The “s-curve”, a logistic curve, describes the relation between the performance (the ordinate) obtained from a technology and the effort expended (the abscissa) in developing it. The curve shows an early stage of slow growth in performance increasing as more research is completed and then decreasing growth in performance as the limits of the technology are achieved.
Term Description
R&D Return Return on a technical investment
R&D Productivity Technical progress from investment in R&D, influenced by the research team (an engineering function)
R&D Yield Return from a technical advance, function of the market and consumer preferences
R&D Multiplier Ratio of Investment to develop a product/ Investment required to make it and sell it
R&D Return = R&D Productivity x R&D Yield
Return on Capital = R&D Multiplier x R&D Productivity
The significance of the curve is that it is more difficult to obtain superior performance from a mature technology than from a developing technology, ie the R&D Productivity of a new technology is much higher (5:1) than that of a mature technology.
As a conceptual tool, the s-curve is useful in helping a company to understand how mature its product is. Monitoring the productivity of R&D helps to determine the maturity of a technology. Companies should estimate the theoretical maximum performance of their technology and compare current technical performance with that maximum.
Technological discontinuities occur when a new technology delivers the desired customer attributes in a different way. The new technology is represented by a second s-curve at a different stage of maturity. Replacement of the existing technology by the new technology occurs if the new technology can be developed along its own s-curve to the stage where is supplants the existing technology by delivering superior performance on one or more attributes valued by the consumer. The market may change rapidly to the new technology as soon as it has achieved superiority in one (or more) attributes valued by customers.
According to Foster, the attacker (the developer of the new technology) has the advantage because of the shape of the s-curve and the lack of sunk investment in existing technologies and channels. Foster suggests that seven out of ten defenses against attackers ultimately prove unsuccessful.
The terminology is confusing. The attacker is always the developer of new technology who may win the market from the provider of the existing technology. Yet Foster advises market leaders how to manage and develop new technologies to remain leaders (ie defend their position). However, he does say that unless market leaders are prepared to abandon the skills, products, culture, and organizational structure that made them leaders, and develop new technologies meet consumer needs better, then they will be supplanted by attackers.
Defenses against attackers include:
• Leapfrogging, adopting the second generation of the new technology after the attacker has developed the first generation
• Maximizing performance of existing technology
• Hybridizing new and existing technology
Technological cycles inevitable. Companies have to cannibalize existing and develop new if they are to stay ahead.
August 8, 2020
It was my dads book, im sure it was great for him but im not the target audience
Displaying 1 - 2 of 2 reviews