The Business Book

(Joyce) #1


Godalming, England). More recent
game-changing products in
lighting, energy, transportation,
and healthcare have ensured that
the Siemens name is associated
with quality and innovation.
Leaders like the company’s
founder, Werner von Siemens—
those with the vision and courage
to pursue game-changing
strategies—are, however, all too
rare. It takes great courage to break
from tradition; and charisma and
conviction to lead individuals,
organizations, and entire industries
away from the status quo. Success
is met with reward and celebration;
failure with ridicule and scorn.
For would-be game changers, the
line between fame and infamy is
often thin.

Rewriting the rules
Another company that has changed
the game in its favor, on several
occasions, is Apple. Under the
guidance of its co-founder and
CEO, Steve Jobs, the organization
disrupted the desktop computer

industry, the music industry, the
cell-phone industry, and the tablet-
computer industry.
Apple’s iMac, with its focus
on user-friendly design and
software, made a significant
impact on the personal computer
industry. However, Apple’s first
major game changer was the iPod,
first introduced in 2001. The
product was met with scepticism—
but this, according to Christensen,
is a classic reaction to a game
changer. A product that is accepted
at first glance as a “winner” is


unlikely to have shifted the market
very far—true game changers raise
eyebrows and prompt questions.

Interfacing technologies
The iPod was a cross between the
early crop of low-storage MP3
players and the large, hard-drive-
based players that provided several
gigabytes of storage. Amid a sea of
bland competing products, the iPod
stood out thanks to its stylish and
distinctive design. It was small, easy
to use, and came with the promise
of “1,000 songs in your pocket.”
The real disrupter, however, was
the combined power of the iPod
and its software interface, iTunes.
Customers could now access a
huge amount of music from one
place, buy it, download it, and
“sync” music from their computer
to their devices with ease. The
iPod could also be charged while
syncing. The fact that we now
take such features for granted
demonstrates the extent to which
Apple transformed the market
for personal-music devices.

Disruptive innovation refers to
an innovation that transforms the
market. When an existing product
boasts more features or services
than customers require, it may
become too complex or difficult
to use. As the gap between the
existing product’s performance
and customer requirement grows,
it creates a gap in the market
that can be exploited by a new,
“disruptive” product. Over time, the
new product can redefine the market.

You cannot lead
from the crowd.
Margaret Thatcher
UK former Prime Minister (1925–2013)



Point of overperformance

Overperformance of existing
product creates a gap for a
new, “disruptive” product

Mean performance

Performance demand of
mainstream consumers

Existing company/
New “disruptive”
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