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To: moat who wrote (1134)	3/30/1999 2:47:00 PM
From: Robert Sheldon	Respond to of 5853

every time I pick it up I get bored with it Every time picked it up I got a headache! I say this because everything I had learned about capital allocation in school got tossed out the window . . . so much for the tens of thousands of dollars spent on my education. The book postulates that traditional axioms such as listening to your customers, running weighted average cost of capital & marginal cost of capital analysis's, as well as the senior management decision processes are all wrong. That would be enough for many Professors to “go off the deep end”.

To: moat who wrote (1134)	3/30/1999 7:20:00 PM
From: bwtidal	Read Replies (1) \| Respond to of 5853

This seems like common sense, it happends over and over again in business. I am somewhat intimidated trying to net out this book, but here goes. If it is "common sense", why DOES it happen that incumbents get overthrown by new technologies? Christensen argues that the incumbents are locked into value networks that make the disruptive technology unattractive to pursue. And the disruptive technology is often offering a different value proposition (eg. smaller disk) that was not even something that the existing customers were even asking for(eg. faster access time, longer time to failure). Re: the value networks in the company. Imagine 30 months ago you were an upwardly mobile executive at AT&T. There is no such company as Qwest or Level3 or Global Crossing, which are at the drawing board stage. But there is an emerging technology using wave-division multiplexing and erbium-doped amplifiers that could conceivably drive the cost of telecommunications down to a tiny fraction of your existing network. Voice would become just another IP-over-fibre application on an all-optic fibre-based network. And, oh yes, this IP-based network would not come with the Quality-of-Service and multi-level services/billing that your best customers expect and demand. With your visionary ability, you propose that AT&T embraces the new technology. Yes, it will mean massive write-offs because you are effectively declaring the existing plant obsolete. And billions of dollars of new spending to implement. Perhaps the issue of debt or equity to fund the spending, diluting current shareholder claims to cash flow. Maybe a dividend cut. And it could cannibalize existing revenues. (And these are only the value networks internal to the company). Even though Sprint and MCI/Worldcom and British Telecom are only cautiously shifting to the new technology, you implore the board that AT&T should go full bore and bet the company on this new vision of the future. Although your career is now over, you did score a view points and a task-force is formed to review the implications of this new technology. A test-market roll-out is planned and capital is allocated. Meanwhile, over at the drawing boards, there is no cannibalization, no write-offs. Just business models built entirely around the economics and value proposition of the new technology. And the entrepreneurial conviction and culture to get it done Now, the AT&T vs. upstart story is not fully played out, but was it really "common sense" 30 months ago? BTW, I am a big Christensen fan. I think this is a VERY important book. I admit, I did get bored during the hydrualic backhoe discussions, etc. to the point of skipping sections. I like the spirit of the book, too. It encourages entrepreneurship, but also offers solutions for the Intels and AT&T's of the world to avoid becoming the next "common sense" casuality. And it is something of an antidote / complement to the kind of sad, deterministic view of "The Gorilla Game" that says the big win, it's over in several fields. I hope the book it isn't overly obvious... I gave away about 30 copies to clients.... although the reviews aren't in yet...

To: moat who wrote (1134)	3/30/1999 7:29:00 PM
From: Bill Fischofer	Respond to of 5853

Re: Business books You have to understand the media cycle for business books. This is one of the more hyped areas of publishing. The general script is for some academic/consultant to burst onto the stage with some "revolutionary" prescription for what ails all businesses. CEOs vie with each other to write fawning book blurbs and it becomes de rigeur to find a well thumbed copy of the opus in any executive briefcase. The author then typically makes the cover of Fortune, Forbes, or Business Week and what follows is the establishment of a cult of personality around the newly crowned celebrity. A deluxe audiocasette edition is produced for the "busy executive" who hasn't time to read and a series of high-priced seminars is put together so that the expense-account set can receive the wisdom direct from the source. The odd academic who stumbles into this cycle is typically burned out after a year or so of keynoting and returns to his studies. Within a year of this he has returned to obscurity and his book can be found only in remainder bins. The truly entrepreneurial (usually those coming from the management consultant ranks) can parley this into a mini-industry involving a series of "updated editions", newsletters, live appearances, videos, and other derivative works. Tom Peters is perhaps the best known practitioner of this art, having parlayed his original 1982 book In Search of Excellence into an empire that shows no signs of quitting. He can now be found at tompeters.com I suspect Christensen is more likely to follow the standard academic trajectory than the management consultant trajectory. We should know in about another year given that his book was published in 1997.

To: moat who wrote (1134)	5/27/1999 1:29:00 PM
From: moat	Read Replies (1) \| Respond to of 5853

After seeing Christensen on Charlie Rose on 5/26/99, I take back my negative comments in post #1134: Message 8609669 I finally understood what he is said (i.e. by theory, as well as by numerous examples) about why the established businesses with "overshoot" products is vulnerable to new "undershoot" technologies (or methods) from new player with no baggage. The new player will take hold first with those not-very-important customers (i.e. low margin), and work its way up the ladder. His message is that the established leader must be watchful of new developments and set up separate business units (with the freedom) to deal with disruptive advances. (he pointed to HP printers and Intel's Celeron as great examples) Christensen's concepts and examples are invaluable to every CEO (and investor).