The Crystal Ball 4

“Curmudge, I understand that you actually bought a book. Typically, you just read the reviews in Amazon and wing it from there. What inspired your investment in the real thing?”

“Well, Jaded Julie, we’re going to push our crystal ball into the somewhat-distant future, right? For that we’ll need some high-powered insight, and that doesn’t come free. So I dug down into my dresser, blew the lint off a credit card, and purchased The Innovator’s Prescription by Clayton Christensen and two MDs, Jerome Grossman and Jason Hwang.”

“We mustn’t forget that material in Kaizen Curmudgeon can’t be controversial. So how can we present Christensen’s forecasts without generating controversy?”

“For the most part, Christensen writes about several years into the future and supports his position with data from the fairly distant past. People tend to get riled up over the present, the immediate future, and the recent past. That, as well as Christensen’s compelling arguments, should keep the discourse civil. Additionally, we are going to simply convey parts of Christensen’s message and do it diplomatically and selectively.”

“The focus of Christensen’s earlier writings—and they were not about health care—was disruptive innovation. What is that, anyway? It sounds both disturbing and encouraging at the same time.”

“In Christensen’s words (signified by single quotation marks), ‘the disruptive innovation theory explains the process by which complicated, expensive products and services are transformed into simple, affordable ones.’ “

“Curmudge, even a mind as swift as mine would appreciate an example.”

“It’s coming at you, Julie. Back in the 1960’s (ah, it seems like yesterday) only a few talented engineers could build IBM’s room-sized, mainframe computers. They were sold directly by IBM to institutions for hundreds of thousands of dollars. Then along came a technological disruptor, the microprocessor, that simplified computer design and assembly and enabled personal computers to be assembled from parts in Michael Dell’s dorm room. Soon virtually everyone, like me who had never thought about computers, could afford a computer and had one on his desk.”

“But this transformation involved more than just the advent of the microprocessor, didn’t it?”

“Right. IBM set up a new business model to make money with low margins, low overhead, and high unit volumes. In addition, components became commodities, marketing was done by independent vendors, and software was developed for unsophisticated users. Lots of organizations could participate in and profit from this so-called economically coherent value network.”

“I think I have the basics, Curmudge. For successful disruptive innovation, the requirements are ‘(1) sophisticated technology that simplifies, (2) low-cost, innovative business models, and (3) an economically coherent value network.’“

“You got all of that from what I just said? You must have been reading the book. Come back next time and we’ll begin to explore how Christensen translates these concepts into health care.”

Affinity’s Kaizen Curmudgeon