Mastering the Dynamics of Innovation

Rating:
Summary: Scholarly analysis in an eminently readable enjoyable book
Review: James Utterback has achieved the difficult goal of taking careful scholarship, drawing useful conclusions and presenting the whole package in a highly enjoyable book. He makes a major contribution by distinguishing between product innovation and process innovation and shows how and why the former is likely to come from outside the established industry players, while the latter is more likely to come from inside.

In the process he reaches back into history and covers industries ranging from pond ice to memory chips. Combining his explanation with concepts with Geoffrey Moore's "Crossing the Chasm" provides a powerful means of understanding where innovation comes from and what the barriers are to its success. Utterback's book goes beyond that. It also calls into serious question the idea (posited by Moore and others) that today's "high tech" cycle of innovation is fundamentally different from earlier innovative cycles in other industries. All in all, Utterback uses industrial history in a low-key, fact-based book that shines a clear, bright light on what drove yesterday's technology developments -- and today's.

Rating:
Summary: Scholarly analysis in an eminently readable enjoyable book
Review: James Utterback has achieved the difficult goal of taking careful scholarship, drawing useful conclusions and presenting the whole package in a highly enjoyable book. He makes a major contribution by distinguishing between product innovation and process innovation and shows how and why the former is likely to come from outside the established industry players, while the latter is more likely to come from inside.

In the process he reaches back into history and covers industries ranging from pond ice to memory chips. Combining his explanation with concepts with Geoffrey Moore's "Crossing the Chasm" provides a powerful means of understanding where innovation comes from and what the barriers are to its success. Utterback's book goes beyond that. It also calls into serious question the idea (posited by Moore and others) that today's "high tech" cycle of innovation is fundamentally different from earlier innovative cycles in other industries. All in all, Utterback uses industrial history in a low-key, fact-based book that shines a clear, bright light on what drove yesterday's technology developments -- and today's.

Rating:
Summary: Great stories and data on innovation
Review: Prof. Utterback spent over twenty years studying 20+ industries as they experienced dramatical technological change, trying to understand who were the market leaders before the change, who were the market leaders afterwards, and why?

He studies markets as varied as cooling (the harvested ice industry in the late 1800s), lighting (gas lighting giving way to incandescent lighting giving way to flourescent lighting), typewriters (manual typewrites giving way to electrics giving way to dedicated word processors giving way to PCs), and plate glass.

He observes that the market leaders prior to a technology change rarely are market leaders after the change, primarily because the entrepenuers and innovators are squeezed out of older companies by "incrementalists". This gave me a lot of encouragement and insight into pushing hard on Internet Explorer back in 1994..1996 at Microsoft, and also I think explains why Microsoft is struggling now.

Rating:
Summary: 'Dynamics of Innovation' continues to
Review: The existing reviews really get to the heart of the matter. I can only add that this book continues to provide a powerful framework for analyzing technical innovation - the process and maturation of that innovation within a market. As I survey the rapid growth of trading hubs/net market makers in the industrial procurement space, I am struck by the similarity to the examples in the book. The hyper growth in this space sets the stage for the inevitable shakeout and establishment of the dominant model - yet to be determined. It is exciting to watch the market mature, with the knowledge that the changes are part of a cycle which can be comprehended and has repeated itself in multiple industries. Utterback provides a powerful framework with which technological innovation can be understood. Thank you.

Rating:
Summary: Unearths the Nature of Product & Process Innovation
Review: This book is well written an easy to comprehend. Unlike many formal text, which can leave your head spinning is a whirl of complicated text masked by the writer inability to understand that perhaps others beyond the scope of his or her academic circle would actually be reading it.

Utterback does a superb job of describing the underlying nature of what drives new innovation, where is comes from, where to look for it and how to adapt.

He recognizes that a sole focus on your customers needs can lead you and your products to extinction. Sometimes the customer does not want new and improved. Sometimes they want different and better.

Utterback explains that companies that gain dominance in their industries tend to hold on to it by reducing their costs and increasing their competence in what they do. This make it hard for new entry by upstarts using the same path. What is clear after reading, is that upstarts don't always use the same path and can come at you from angles you never dreamed were possible.

Utterback provides clear example after example of companies that were totally unwilling to focus any energy towards emerging technologies and then were swept a away by a wave of innovative technology that left them and their stockholders caught in the undertow.

This book is a must read for all workers at all levels of a corporation. It defines the need to recognize the signs around you that would indicate a storm of innovation is on the horizon that could make you obsolete.

Rating:
Summary: an understanding of innovation
Review: This book is written in a concise manner that is straightforward and easy to understand. Utterback explains how innovation has evolved over the years, using great examples from a variety of assembled and non-assembled industries. One side note, I found that this book was worth the cover price for the history of industries he mentions alone. Some of the products and industries mentioned in this book include: Incandescent light bulbs, Typewriters, Glass, photography, and Ice. This book is loaded with invaluable nuggets of insight, it is impossible to due it justice in a book review. I highly recommend reading it.

Rating:
Summary: A compelling account of technology revolutions
Review: This is a fascinating and chilling account of technological innovation. It belongs on the recommended list of technology managers and staff alike. Utterback marshals compelling case histories that provide the objective foundations for more popular accounts of technology formation such as Geoffrey Moore's CROSSING THE CHASM (1). We gain insight into why it's so crowded at the bottom. Reasons exist in abundance why firms that epresent established technology are the least likely to perceive the threat represented by radical innovation. It is a slight exaggeration to say Utterback makes current management sound like the last Czar of Russia praising the happiness of the serfs. Yes, perhaps the serfs were happy; but the Bolsheviks weren't. In short, the technological discontinuity is not going to come from established competitors. All the electric typewriter manufacturer's were "taken down" by the Word Processor. But how then to recognize the radical innovation? The key to Utterback's argument is the idea of a "dominant design" of a technology It forms the center of a network of system features, user habits, collateral assets such as brand image, market channel and customer switching costs. By definition, the dominant design wins the market. It is the pattern to which both competitors and incremental innovators must adhere to if they aim at significant following in the current market. It is what radical innovation over-throws. Many case histories are provided. Each of the chapters illuminates an aspect of the dynamics of innovation by drilling down into a specific example. Thomas Edison came late to the race to produce a commercial electric lamp. He succeeded through ingenuity and systematic thinking. From the start, he planned for scalability, aiming to deliver electricity through the very illuminating gas conduits that formed his major competitors' delivery system. He also laid down a network of patents as he worked; and legally pursued those who tried to steal his mechanisms. Utterback's other examples include the Qwerty typewriter key board (an example as powerful as it is elegant and simple), the BM-compatible PC, the Cray computer, the INTEL-based massively parallel computer, the ball-point pen, the float process of making plate glass, celluloid (Kodak) film, the incandescent light bulb, the INTEL x86 chip, and a dozen other engaging from the history of economics. A fascinating account of cutting natural ice from the Lakes of New England in the mid 1800s should have a sobering - I almost wrote chilling -- effect on the complacent technology manager. Here radical innovation means one thing: refrigeration. Paradoxically, the ice industry, which efficiently transported harvested ice as far away as India, was unable to envision refrigeration. Industry outsiders were the ones. Why? According to Utterback, industry insiders have a heavy investment, both technological and emotional, in the existing system of infrastructure, distribution, and production. "...From a practical point of view, their managerial attention is encumbered by the system they have - just maintaining and marginally improving their existing systems is a full-time occupation." They are ripe for the process which the economist Schumpeter described (2) as "creative destruction." (Utterback's book exemplifies how Schumpeter is reborn as the intellectual god-father among the Silicon Valley - ideas-as-economic-drivers -- mind set.) Thus, innovation shows up as a game of chutes and ladders. A new technology represents a ladder to get off the slope of incremental progress and jump to another level. The chute is the path by which managers dedicated to the customers of the about-to-be obsolete technology follow it into oblivion and obscurity. This is a grim prospect, and, according to Utterback's cases, one that occurs about 70% of the time. In the case of David and Goliath, history is on the side of the sling shot. How do the lucky few reinvent themselves? This possibility is appreciated by Utterback, who provides the examples of HP and Motorola. But the examples of what doesn't work are legion. Discounted cash flow will rarely (never) fund risky, radically innovative projects. Compromises like DEC's simultaneous pursuit of VAX and MIPS chips, with one foot on each side of the chasm, helps to explain how DEC ended up its bottom. Assigning the new technology initiative to the establishment department is like asking the Philistine Goliath to be little David's mentor. If a state-of-the-art lab is established, then you may end up with XEROX PARC, which invented modern computing without benefiting XEROX. Of course, you may end up with Edison's Menlo Park work shop or Bell Labs. So this approach - though risky - is a gamble with pay-off prospects. A diversified portfolio of R&D projects is part of the equation. But equally important are top management's commitment, patience, and persistence. The enterprise-wide nurturing of core competencies in marketing and distribution, as well as product design and implementation, are on the critical path to firm-wide renewal. Finally, reading Utterback's text itself would be useful step for technology managers in understanding how to cross, instead of ending up at the bottom of, the chasm of technological discontinuity and innovation. (1) Moore, Geoffrey. CROSSING THE CHASM. New York: Harper/Collins, 1995. (2) Schumpeter, Joseph. BUSINESS CYCLES. New York: McGraw Hill, 1939. --excerpt from my review in COMPUTING REVIEWS, November 1997

Rating:
Summary: Refreshing and Innovative Perspectives
Review: Utterback explains "how companies can seize opportunities in the face of technological change." There are dozens (hundreds?) of other books on the same subject, notably those written by Geoffrey A. Moore. I rate this book so highly because it is exceptionally well-organized and well-written, because it examines several offbeat subjects (eg the development of the typewriter and the evolution of the typewriter industry, the development of the incandescent electric light), and because Utterback focuses so intensely -- and so effectively -- on real-world situations in which the "dynamics of innovation" are manifest. This book is very informative but also great fun to read. (Those who enjoy it as much as I did are urged to read both The History of Invention and The Lever of Riches.) Chapter 4 revisits the the dynamics of the innovation model (Figure 1-1) and then in Chapter 5, Utterback shifts his attention to developments within the plate glass manufacturing industry. In Chapter 6, he examines the innovation differences between assembled and nonassembled products. Subsequent chapters sustain the discussion of "the power of innovation in the creation of an industry" and then, in Chapter 9, Utterback "draws together some of the lessons of earlier chapters and academic research to consider the relationship between the behaviors and strategies of firms with respect to technological innovation and long-term survival." He concludes his book (in Chapter 10) by addressing "the perennial management issue of how corporations can renew their technology, products, and processes as a basis for continued competitive vitality." It is obvious to all of us that even the strongest product and business strategy will eventually be overturned by technological change. Ours is an age in which change is the only constant. Therefore, as Utterbach explains so carefully and so eloquently, the challenge is to accept the inevitability of change which results from technological innovation ("discontinuities") and to sustain a commitment to cope effectively with such change. Only such a commitment "will win the day."