New ideas and opportunities, evaluated on the ability to serve existing customers and earn the necessary margins to support the company, are called sustaining innovations and are always successful ventures for existing (and dominant) firms.
But sometimes, innovation creates a new technology or reveals a new way to organize a firm’s resources. This disruptive innovation does not offer the performance needed in the existing market, and entrant companies are forced to find a new set of customers who value innovation on a different set of metrics than those of the traditional market. Existing companies disregard the disruptive innovation because of its lower margins, and the newcomers find a small beachhead outside the existing market, using that market space to develop further. As the performance of disruptive innovations outpaces the sustaining innovations, entrants move into established markets and their lower cost structure forces incumbents further up-market, forfeiting existing profitable markets.
-from the summary of Clayton M. Christensen’s The Innovator’s Dilemma
Researchers at Marquette University studied over two thousand companies and found that 94 percent of “hyper-growth” companies were started by two or more people. Individual owners made up only 6 percent of the hypergrowth segment and almost one-half of the slow-growth companies.
Despite the evidence that a partnership can lead to success, the thought of taking on a partner makes most budding entrepreneurs cringe.
-sfrom the summary of David Gage’s The Partnership Charter
In the past, access to water or other natural resources determined the economic potential of a region. But Florida believes that the Creative Class is the new resource for economic growth. When choosing where to live, the Creative Class looks for “thick labor markets” that allow for easy horizontal moves from one company to another. Some choose cities with easy access to outdoor recreation, allowing daily engagement to match unpredictable work schedules. As a result of Florida’s conclusions and with the publication of The Rise of the Creative Class, regional economic development has been turned on its ear. Spending by state and city governments to attract corporations or finance professional sports arenas was proved useless by Florida’s research. Instead, his 3T’s–technology, talent, and tolerance–are the new blueprint many areas are using to grow creative capital.
-from the summary of Richard Florida’s The Rise of the Creative Class
Titles Are Handy Tools: There is a trade-off here. In one way, titles are a form of psychic compensation, and if too many titles are distributed, the currency is depreciated. But a title is also a tool. If our salesman is a vice president and yours is a sales rep, and both are in a waiting room, guess who goes in first and gets the most attention…If you find you can’t get applicants for menial jobs, maybe your titles are obsolete. A restaurant cured a chronic busboy shortage by changing the title to ‘logistics engineer.’
-from Robert Townsend’s Up the Organization