Major ideas commonly discussed on innovation in business models include disruptive innovation, crossing the chasm, and business architecture

Disruptive innovation is one of today’s basic concepts in business. The challenge is to find one of Christensen’s articles that encapsulates the content. In his earlier work, he had first framed disruptive innovation in terms of technologies, but he later changed that to disruptive innovation in terms of business models.

• Consider: Clayton M. Christensen and Scott D. Anthony. “Cheaper, Faster, Easier: Disruption in the Service Sector.” Strategy and Innovation 2, no. 1 (January/February 2004). at http://www.innosight.com/stratandinno.php [1]

• Consider: Clayton M. Christensen, “Beyond The Innovator’s Dilemma.” Strategy and Innovation 1, no. 1 (March/April 2003). at http://www.innosight.com/stratandinno.php [2]

• Consider: Clayton M. Christensen, Matt Verlinden, and George Westerman. “Disruption, Disintegration, and the Dissipation of Differentiability.” Industrial and Corporate Change 11, no. 5 (November 2002): 955-993.

• Consider: Clayton M. Christensen, “The Rules of Innovation.” )
  • Abstract: As a company grows, what it can and cannot do becomes more sharply defined in certain predictable ways. The authors have analyzed those patterns to create a framework managers can use to assess the abilities and disabilities of their organization as a whole. When a company is young, its resources–its people, equipment, technologies, cash, brands, suppliers, and the like–define what it can and cannot do. As it becomes more mature, its abilities stem more from its processes–product development, manufacturing, budgeting, for example.

A business organization has traditionally been viewed as a “firm” with a focus towards a single goal. In practice, the business may be reframed as having three different functions, operating in different styles.

• John Hagel III and Marc Singer, “Unbundling the Corporation”, McKinsey Quarterly, 2003, Number 3, ((See the reprint at McKinsey Quarterly [3]).
• John Hagel III and Marc Singer, “Unbundling the Corporation”, Harvard Business Review, Volume 77, Number 2, March-April 1999, pp.133-141. (See the original article at HBR [4]).
  • Abstract: No matter how monolithic they may seem, most companies are really engaged in three kinds of businesses. One business attracts customers. Another develops products. The third oversees operations. Although organizationally intertwined, these businesses have conflicting characteristics.

Optimistic managers of many startups assume that they want to capture the market by selling to everyone. If the products are oriented, in particular, to B2B markets, they won’t be facing a volume operations model, but instead a complex systems model.

How should executives approach business when the industrial age paradigm has broken down? One view of leaders is as business designers, or as a chief business architect.

• Stephan H. Haeckel, “Leading On-demand Businesses – Executive as Architects” IBM Systems Journal, August, 2003. (Available as an article from IBM [5]).
  • (supplemental): Stephan H. Haeckel, Adaptive Enterprise: Creating and Leading Sense-and-Respond Organization, Harvard Business School Press, 1999.

These references are suggested as part of the Stadia 2006 International Service Business Management Sessions [6]. Please respond with comments to suggest additional readings or express opinions on those above.