Seeing What's Next:

Using Theories of Innovation to Predict Industry Change

Christensen, C.M., Roth, E.A., Anthony, S.D. (2004).  Seeing what’s next: Using theories of innovation to predict industry change. Cambridge, MA: Harvard Business School Press. 

As a follow-up project to the incredibly successful Innovator’s Dilemma and Innovator’s Solution, Harvard Business School Professor Clayton Christensen teams up with two of his former students in Seeing What’s Next: Using Theories of Innovation to Predict Industry Change.  The authors outline the case that theories of innovation can be implemented in organizations to predict the movement of companies in an industry far better than simple SWOT analyses’ strengths and weaknesses. 

Christensen and his coauthors begin with an explanation of basic theory construction – a basic understanding the authors try to hit hard before moving on to the theories themselves.  They attempt to unravel the dilemma faced by many firms: the firm has neither the motivation to innovate nor the ability to innovate.  To resolve this dilemma, the authors suggest an analytical process that involves three iterative steps:

• Look for signals of change that point to changes to an industry ’s context or companies using new ways to reach noncustomers, undershot customers, and overshoot customers.

• Evaluate competitive battles by comparing companies using the “tale of the tape”: evaluating companies’ resources (what it has), processes (the way it does its business), and values (decision rules that determine how resources get allocated).

• Watch firms’ strategic choices that increase or decrease its chances of successfully managing the process of disruption.

Since companies never succeed when they offer people a worse way to get a job done, companies should always seek to disrupt their competitors.

The bottom-line: companies can maximize growth by 1) creating new-market disruptive innovations to reach nonconsumers; 2) introducing up-market sustaining innovations to reach undershot customers; or 3) introducing low-end disruptive innovations or modular displacements to reach overshot customers.  

The authors’ desire for all readers to understand basic theory design is salient in this book.  This book offers an easy to understand compilation of Christensen’s body of research on disruptive technologies and innovation.  The authors switch between academic and consultant hats in their explanations, and readers unfamiliar with Innovator’s Dilemma and Innovator’s Solution can pick this book up and begin to follow the authors’ arguments without much difficulty.  By better understand these signals of disruptive innovations, firms can determine where disruption is heading and maintain competitive advantage in their competitive environment.   

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