Chester Life 2

Howard Dresner recently spoke with Dr. Clayton Christensen, a Harvard Business School professor and the preeminent expert in the area of disruptive innovation and business strategy. Their discussion covered a broad range of topics from identifying and creating a disruptive strategy to protecting oneself from disruptive competitors.

The resulting interview was so content-rich, we found it necessary to divide it into two parts. In this first installment, Dr. Christensen and Howard begin by defining what is meant by "disruptive" and "sustaining" innovation.


Howard Dresner, Gartner Fellow 가 interviewer.

Howard Dresner:

Please explain the concepts of disruptive innovation and sustaining innovation.

Clayton M. Christensen:

Well, the reason I'm asking the question that led to this model of sustaining and disruptive innovation is to understand what kind of strategy could an entrant firm pursue, that would make it the easiest to kill a larger giant incumbent?

Sustaining innovation is an innovation that brings to market a product or service that a company in the market could sell for higher margins to its best customers. In other words, sustaining innovation brings a better product into the market. Some sustaining innovations are simple, incremental, year-to-year improvements. Others are dramatic, breakthrough technologies the transition, in telecommunications, from analog to digital, and digital to optical. They were a real technological tour de force, but their affect on the service was to bring a better product into the existing market that could be sold for higher margins to the best customers of the leaders.

The odds overwhelmingly favor the incumbent leaders of the industry in battles of sustaining innovation; whether they are simple, incremental innovations or breakthroughs.

A disruptive innovation brings to market a product not as good as the products in the current market, and so it cannot be sold to the mainstream customers. But it is simple and it is more affordable. It takes root in an undemanding portion of the market, then improves from that simple beginning to intercept with the needs of customers in the mainstream later.

항상 disruptive technology 는 mainstream 의 변방에서부터 출발한다. !! network 의 센터가 아닌 network 의 edge 로부터 점점 링크의 갯수를 늘려나가는 전략..

I call that a disruptive innovation not because it's a breakthrough from a technological sense, but instead of sustaining the trajectory of improvement that has been established in a market, it disrupts it and redefines it by bringing to the market something that is simpler.

SIMPLICITY 의 미학...

Dresner:

What are some good and relevant examples of each?

전작에서는 Computer Hard-drive 와 Excavator industry 를 그 예로 들었다.

Christensen:

Well, in the computer hardware industry, the mini-computer disrupted the mainframe. Then when the personal computer came along, it disrupted the mini-computer. And so Digital Equipment and all those guys got blown out of the water.

Today, wireless handheld devices like Blackberries and iPAQs and Palm Pilots are disruptive relative to notebook computers. So those are good examples.

Internet telephony; the packet-switching technology developed by Cisco and others; wasn't good enough to be used in the voice telecommunications market, so it took root in a less demanding application, data transmission. Little by little, it got better and better and now you can send a voice signal over the Internet. That's a good example of a disruptive innovation. Southwest Airlines is another, and Wal-Mart. Pretty much any company whose stock you wish you had owned over the last ten years started at the simple end of the market and then moved up.


Dresner:

Wal-Mart's been a disruptive innovator for a very long time. I suspect there are some that follow a relatively short cycle and those that have a very much longer cycle. Is there any way to predict that?

Christensen:

I bet you there is, but I just haven't thought about it. You should do that [laughs]. But some, in fact, are very long. Merrill Lynch is a great example. We associate the name Merrill Lynch with high net-worth clients, but Merrill Lynch actually came into the brokerage market in about 1912, and Charles Merrill was bringing Wall Street to Main Street. He made it so simple and cheap for middle-income people to own stock, that he created a big new market. And from 1912 to today, they've cleaned out a lot of brokerage firms whose names you can't remember anymore. And they're still a healthy company. They haven't yet been decimated by the online people.

Dresner:

What are your views on General Electric and IBM? IBM has reinvented itself more than once and we could argue they disrupted themselves. And General Electric, which is a holding company, but interesting in the sense that they have very different businesses they manage quite differently. Some arguably are disruptive in nature, and others are more sustaining.

Christensen:

It's a good question. A company can survive a disruptive attack and remain as the leader, but evidence is overwhelming that the only way to do that is if the leader in the industry that's being disrupted sets up a separate organization. The separate entity then needs the freedom to create a business model that is tuned to that new disruptive business and gives it a charter to kill the parent.
So IBM, when the mini-computer disrupted the mainframe, were very late. But they then set up a separate business unit in Rochester, Minnesota, and when the personal computer; as it disrupted the mini; IBM set up a separate business unit in Florida.And they're the only one of the major computer companies of the 1960s and '70s that did that, and they are the only ones that survived.

What you say is really wise, because if you look at any company that you would say has transformed itself over the last 30 years or so, it is GE. In every case, they achieved the transformation by setting up or acquiring new disruptive business units and selling off or shutting down ones that had reached the end of their lives. In no case did they transform the business model of an existing business unit to cause it to catch the disruptive wave.

So it's like in biological evolution, you and I as individuals will just die, and the mutants will take over. A corporation can evolve, really quite effectively if you know how to do it. It's just the individual business units have a hard time.

Dresner:

In The Innovator's Solution you suggest, if I understand correctly, focusing on profit versus growth will prevent or impede innovation, thereby preventing future growth. And if we assume companies must innovate to grow, does that mean all public companies are incapable of innovation and will ultimately fail?

Christensen:

The evidence is just overwhelming that is true. We can't use the word innovation here, because if a market is known and a company has a good foothold in that market already, they should be very impatient for growth: invest aggressively and get ahead of the competition is the only way to succeed.

But this particular type of innovation we call disruption needs a longer runway for it to take off, and part of the reason is that many of the strategy details are just unknowable in advance. You've got to get into the market, try a few things, fail a few times and iterate towards a viable strategy. Then, once the strategy is known and tested, it's very important to invest aggressively to grow.

But the evidence really is strong that when a corporation needs that new business to get very big, very fast, they won't allow it to take that time on the runway; the time to make sure it's headed in the right direction. They just force it to take off very quickly and almost always, it fails.

Dresner:

Obviously, that's the problem public companies face every day: trying to balance pleasing Wall Street with long-term strategy and; survival, even. And one could make a case for staying private; or perhaps returning to private ownership; as a way to insure long-term viability.

Christensen:

I think you're right. Look at Kodak today. They were very prescient, saw digital photography coming, invested in it. They have a business now that's nearly $1.5 billion; it's profitable. But the digital business just won't get big enough, fast enough to satisfy Wall Street and they don't have a long enough time horizon. If Kodak could go private for a couple of years and then come back out, I bet you they'd do better.

Dresner:

So what advice would you give a company that's not currently public? Don't go public? Never go public? Obviously, it's extremely enticing to management to go public.

Christensen:

It's very enticing. There are lots of advantages to the sorts of capital you can raise in that environment, but I guess you just have to say, if you do it, just go in with both eyes open. You're walking on the razor's edge, and as long as you keep growing, you have the privilege of investing to grow. But if growth stops, then life gets very hard.

Dresner:

Would you say a company's install base of customers is another inhibitor of innovation?

초강력중요!!!

Christensen:

That's right. A customer will never lead you to develop a product which that customer cannot use.

Dresner:

So sustaining innovation of course can keep a company viable for many, many years, but listening only to the customer base, for the long term, could in fact be quite damaging.

Christensen:

That's right. In fact, if you're looking to start a new-growth business, very often, the most important customers to understand, are non-customers. Because if you figure out why it is they're not customers, and then bring an innovation that allows them now to become customers, that's what growth comes from.

Dresner:

For an existing company with an installed base, how would you suggest they simultaneously serve the installed base, while trying to invest in future growth businesses? How do you do that? What's the right structure?

Christensen:

If the organization or the business unit charged with serving the installed base is also asked to go after non-customers with the more affordable, simpler product, they can't do it. Because the business models are so different, and small customers with the lower priced product; it's not an attractive financial; it doesn't solve the financial goals of an established business unit. Almost always, this new game begins before the old game ends. If you somehow create a strong economic incentive for the management of the existing business unit to go after the new disruptive opportunity, you take your eye off the main profit and cash engine of the company, and you stumble very quickly. And yet, while that is still going, you've got to get your foothold in the new market. And that's why it's just really important to set up a separate unit.

Dresner:

In Innovator's Solution there were some examples of companies that went after new disruptive businesses, disruptive growth businesses, and were hammered by Wall Street. They brought in somebody to turn the company around, shed the new disruptive business, and were rewarded by Wall Street simply be returning to the status quo.

Christensen:

[Laughs]... That's right. Not a very complimentary book about Wall Street.

Dresner:

Perhaps you could spend a few moments talking about your model for segmentation. You talk about how most companies focus on product segmentation, or various demographics. And you talk about what I would call purpose-specific segmentation; based on what people are actually buying, or problems they're trying to solve with a particular product.

Christensen:

Well, you think about your own ; the sequence of thought you go through when you ultimately end up deciding to buy a product. Somehow, you become aware you need to get something done for yourself. And then the next thought is, "What can I buy or what can I hire, to get this job done for me?" And then you start the search. But what comes to your mind, after you're aware that you have a job that you need to get done for yourself, is that you then start to think, "Who can I hire to do this job?" And so in many ways, we hire products to do jobs for us. We hire services to do jobs for us. If an innovating company focuses on the job, then when you go through that sequence, and you become aware you've got to get that job done, there'll be a product sitting there designed to do that job. You don't think in terms of demographics. You don't say, "I'm in the 40 to 50 year old Caucasian male bracket, and therefore, there's a 35% probability that I'd prefer this product over that one." You don't think that way. But when people do consumer research on 40 to 50 year old Caucasian males, the results of it will be that X percent of the demographic segment, prefer this product over that one. And so they develop a product when they target the demographic segment; that may nor may not connect with what you're trying to do for yourself; because you actually are a very unpredictable person. Over the course of a day, or a week, or a month, there are a lot of things that you're trying to get done for yourself.

And so if I, as an innovator, try to understand you as a consumer, this is a volatile, unpredictable target. But if I, instead, try to understand the jobs sitting out there which periodically might arise in your life, and then I communicate to you, a brand associated with the job, then geographically, as you wander aimlessly through life, if you find yourself needing to get the job done, then you just look down on the floor and say, "Oh, that's who I should hire to do this job." Bingo.

So it's a different way of thinking about market segmentation, but I think that reason why; like P&G, their new product failure rate is over 85%. Of the products they launch into the market, 85% fail. And this is allegedly one of the most sophisticated market research organizations in the world. But if you look at how they segment markets, they divide markets by product category, and then they divide markets by demographics. And that's why they fail.

Dresner:

I would say that's probably the classical approach to segmentation. I know a lot of our clients struggle with segmentation, and spend a great deal of time. And of course, you know we focus a lot on analyzing data, going through it trying to figure out exactly why did their customers buy, and when did they buy. What drives that behavior, and when they do buy, what does that transaction look like? What are the sorts of associative properties between the different things they actually purchase; and they struggle with this ; and in some cases, they bring in consultants and use all sorts of technology to try and sort through it. Using your model, what approach would you take? Is there a best practice, if you will, for learning the true segmentation?

Christensen:

Yeah. There are two approaches that really work, and I recommend you do them in sequence. The first one is the management of the company trying to understand the structure of its markets; just get 'em all in a room, and give them 20 Post-it notes. Get them to think, "What are the activities, or the reasons why customers buy products?" And then go through; there's a technique called KJ diagramming, where you get everybody to rank order their Post-it notes as the most important activity for which customers buy the product. You ask one person to put their most important note on a flip-chart and read it, and explain why he thinks it's the most important reason why people buy this product.

Then just get all the others in the room to interview, write a similar thing on your Post-it note, and you stick it on the chart ; and then you get someone who had a different purpose or activity, and stick that on the chart. So you kind of aggregate these collections of Post-it notes. And then you look at the collection of Post-it notes, and try to abstract at a level, that, when people engage in these activities, what's their motivation? What's the broader purpose they're really trying to accomplish?

Dresner:

That's got to be the difficult leap to take.

Christensen:

Yes, but you can do it. The next thing to do is whip those as hypotheses. Out of that kind of an exercise most companies will come up with four or five jobs or purposes out there for which people might hire a product like ours. Then go interview customers who bought one of your products, or used one of your products yesterday, and ask them what was the situation you were in yesterday that caused you to pick up this product and use it. And write a case study about it. And don't necessarily ask the customer to articulate their reasons, but just to describe the situation they were in. If you write eight or ten case studies from customers who recently used a product, and the cases about the situation they were in, you start to see things line up pretty well; between your internal brainstorming and this survey of customers ; of what are the reasons why, what motivates them to pick up a product?

And then the third is, as you understand the situation, then you ask them, "Now think back when you were in a similar situation, but you weren't in a position to hire that product to do the job for you. What did you do? What alternative did you hire?"

As you ask those questions, you get a sense for, who do you really compete against in that job? And that really allows you to put some substance around a job.

Dresner:

In your estimation, who's done a good job of that? What companies that we would know?

Christensen:

I know of none. Seriously. I was talking to Scott Cook about this, who is the founder and Chairman of Intuit. And Intuit has done it occasionally, with their QuickBooks product and Turbo Tax. Scott said, "Looking back on it, whenever we failed with a new product, we followed a conventional marketing paradigm, of segmenting by a product attribute, or customer demographic." And assuming I've got it right, I asked Scott, "Why does everybody get it wrong?" And one of the puzzles is that, at the Harvard Business School, the god of marketing 30 years ago, was a guy named Ted Leavitt, who wrote this article called Marketing Myopia and so on. He taught this in his classes. He said, "People don't buy a quarter-inch drill. They buy a quarter-inch hole. You've got to study the hole, not the drill. The drill is just a solution for it." It's the very same concept, but why is it that the concept, although everybody knows it's right, never gets traction? Scott said maybe one reason why is that many of today's leading edge marketing techniques were perfected by companies like P&G, where Scott used to work. In many of their markets, there's almost a 1:1 correspondence between the demographic group and the job to be done. Feminine hygiene products, for example, if you understand the customer, you understand the job, in many ways.

But then when you move outside of that realm, where there's not a 1:1 correspondence between job and demographic segment, then you end up misapplying the technique.

Dresner:

Interesting. What about looking at it from the other perspective. If I want to create a product or a service, what technique would I use to identify jobs that need to be done, that perhaps are not being done today?

Christensen:

You have to start somewhere, but for example, Federal Express was a business that was positioned on a job to be done. Get the stuff from here to there overnight, with perfect certainty. And before Federal Express, there just wasn't anybody that had a business model really positioned on getting that job done. But if you have an interest, and maybe this thing exists, then go to the postal service, and interview people who use the postal service. Ask them about the circumstances in which they found themselves in when they found that service. And as soon as you begin to interact with people who are thinking, "Boy, I wish I could have gotten there," you know. That's the best example I can offer.

Howard Dresner:

You suggested in The Innovative Solution that ; I assume ; for an established organization, when constructing a business plan, they frame the opportunity initially as a threat, and then once they get the resources, to shift the focus to growth. Now I understand the sentiment. It seemed a little bit like bait-and-switch.

Clayton M. Christensen:

[Laughs]... That's true.

Dresner:

Can you give some examples of where this should be employed, and where it's worked and hasn't worked ; and what does management think of that?

Christensen:

Yeah, if they know you're gaming the system, will they somehow resist. I just think it's almost a law of nature. Konamen and Taversky showed individuals react that way. Same phenomenon posed as a threat, elicits a far more intense response. The reason it's relevant here is what we were talking about before: the new game begins before the old game ends. The old game is generally still very profitable and successful during the time when the new one has to start, so the business almost has no appetite for opportunity when it's being fed. But if you frame it as a threat, which ultimately it will be, there's nothing dishonest about that at all. It's really the only way you can get a successful organization to be motivated. Then you just need to get it into an environment where the people in charge don't feel the threat. All they see is the opportunity.

Dresner:

So different audiences, perhaps.

Christensen:

Yeah. The fellow who did that research we cited there, Clark Gilbert, just did a masterful study of the online newspaper industry. He was one of my doctoral students. Those ones that set up a separate organization; after they got the funding and everything, as soon as they separated it, they could think, "Now who wants to learn about Boston? Who's not in Boston? Who would like to advertise it, not advertising in The Globe, and who would like to use this, that doesn't subscribe to The Globe?" All of a sudden, there are all these opportunities they can see, where when they were in the Boston Globe newsroom, they just couldn't see those things.

Dresner:

That's a good example. You talk a bit about data analysis, or what we would call business intelligence, and to some degree, how it might actually work against the disruptive innovative process because it causes what I would consider somewhat of a myopic addition. Where would data analysis be used in the innovation process? Certainly it has some role.

Christensen:

Absolutely. I overstate the case sometimes. In a typical company, 80 to 90% of its money ought to be spent executing sustaining innovations. I only write about disruption, just because I don't have much to say about sustaining innovation. The established leaders, they have a very good track record in doing that. There, an analytical data approach to decision making is absolutely critical, because the data is valid. Data does have a problem, in that it's only available about the past. But when you're on a sustaining trajectory, the extrapolation of the past into the future is really, not a bad way to look. It's just when a disruption happens, and there is a reliable data that exists, and then you try to base your decision upon data, then you get in trouble.

Dresner:

But presumably, when somebody comes up with a bright idea, you'll want to start measuring something. Now we have a disruptive business opportunity, and we can start collecting relevant data, now that we understand and we've framed the opportunity. Arguably, we want to come up with some metrics. What would those metrics be?


Christensen:

Well, I'm not sure I would call them metrics as much as pattern recognition. Any piece of data only has meaning when you filter it through some theory in your mind, so we're always interpreting the meaning of data. One of the things I tried to achieve in this book is to say, if you've got a model or a theory, and then you see a piece of data, then you can interpret it: is this signal or noise? If signal, what does it portend about the future?

If you're concerned that you're headed in the right future, and you're armed with good theory, then you know what data to look for. It's like signposts along the road to the future. You can tell; I can ignore that signpost, and that signpost, but when you see that one, the models will tell you, "Oh. That's the signal the future's turning left and not right."

Dresner:

Okay. That's also helpful. One of the things I pulled out of your books is that, in some ways, the IT organization can be an obstacle ; certainly for a disruptive innovation. First of all, is that always true? Second of all, is there anything IT can do to not be in that position?

Christensen:

Yeah. Where the problem comes is, you generate data from the IT organization to measure performance in the past. Usually, that's a critical role. The data comes structured in a particular way, and almost always, it comes structured by product line and by business unit. All of this is good, but then the error comes, not necessarily from the IT organization, but from the executives who hire it. They come to think the market is structured along the lines in which the data are given to him. And so you start to measure market share by product category, because I have data by product category. It's that translation of measuring the performance of what we have, to now thinking the market is structured in the way we collect the data, and then using that to kind of drive your consumer understanding, at which you target the next markets. It's in those two translations the data becomes counter-productive in an organization. You're using it for things the IT organization did not generate it for.

Dresner:

So certainly, if you have a company that established IT sort of being a proxy for the business, in many cases, it really could not do anything easily beyond the boundaries of what business management has to find as their scope. What about IT in the context of a disruptive company? Where can they help? What can they do to facilitate the disruptive innovator? How is their charter different? Does technology even play a role in aiding a....

Christensen:

Boy, that's a great question. In Chapter 8 of the book, we talk about how ; and what you really point out is, I've thought about parts of the problem, and not all of the problem. It's a great question. In Chapter 8, we describe how strategy comes from two directions. It emerges from the bottom of the organization, as your people are just out there trying to close sales and satisfy customers. Strategy also comes from the senior ranks as they analytically figure out, "How do we get to where we need to be?" And the two things collide in the allocation process, and then whatever merges from that is the actual strategy. You remember that model?

And we point out, that almost always, a company starts out in a direction conceived by the founder, and in 93% of companies that ultimately end up being successful, they figure out the original strategy doesn't work. But by kind of thorough experimentation and trial-and-error in the market, they happen upon or iterate towards a strategy and a business model that really is viable. At that point, companies that continue to kind of flounder and experiment in the market place, kind of fade away. And the ones that know, really get ahead of the pack, because in a disruption, you're rarely the only one who's trying this. There are five to fifty of you, trying to swim upstream here, and the one that gets out ahead fastest, is the one that really emerges as the winner.

At that point, we have to flip the business around and drive the implementation of a deliberate; of the strategy that you now know works; drive it from the top. There, the ability to measure how successful you're being, given you know what to do, is very critical.

Dresner:

If I were to ask you what the moral to The Innovator's Solution is, what would you say it is? If I were to take something away, I'd say, "Maybe we should just accept what we are in the jungle of business." Some organizations are innovators, and some just simply aren't. And maybe some just want to be comfortable. Or the moral, "We should all find a way to innovate, because that's the key to our future success." What would you say the moral is?

Christensen:

It would be much closer to your last one, and it would be that innovation is actually not nearly as risky and random as historically has seemed to be the case. There isn't anything about the process of innovation per se, that makes it unpredictable. The problem in the past is, we just haven't quite known what are all the variables that affect whether we can succeed, nor have we known how to manage those variables well. What I hope we do here, is highlight for innovators, a bunch of these variables that really lie at the root of many innovative failures. If they can understand why this stuff happens, and control it well, they actually can be successful at innovation, much more frequently than historically has seemed to be the case. It's not yet a cookbook, but I'm hoping that we can bring it forward and already, there are some pretty significant victories established companies have logged. Even without The Innovator's Solution; just having read The Innovator's Dilemma, they're going to see this. And once you see it, it's like gravity. When you see an airplane fly, it doesn't disprove the law of gravity. They're just a bunch of engineers who got their heads together and said, "We understand what pulls planes down; let's figure out a way to help them fly despite that." There really are quite a few companies flying quite well these days.

Dresner:

So what are some good examples we haven't spoken about already?

Christensen:

Well, Intel. Probably $18 to $16 billion of their revenue today, comes from projects they launched in response to seeing disruption in their world. Kodak, with their digital photography initiatives, heavily shaped by their consciousness of this. EMC, this data storage company? They have this massive and expensive symmetrics system the founders were just absolutely wed to. There are a bunch of folks in the company that read The Innovators Dilemma and said, "Holy cow, you guys. This is going to hit us." They went off and bought Data General, which had a mid-range storage solution. Now, 70% of their revenues come from that product line. The company would have vaporized had they not done that.

The US Department of Defense. The unmanned aircraft is now a very important part of their military arsenal. That got commercialized, really fed by this thinking. The Washington Post now is an online learning company. It generates more revenues and profit from online learning, which they launched in response to this, than they generate from The Washington Post newspaper.

Dresner:

You also mentioned Boeing in your book, and how the Canada Air regional jets were in fact a disruptive influence. Boeing is the bellwether of that industry, at least for the U.S. For quite a while, they kept building bigger and bigger aircraft, while smaller manufacturers like Bombardier, were building smaller aircraft and competing very effectively in certain markets. So it sounds like a classic disruptive innovation.

Christensen:

It is a classic disruption, and it's very hard. Actually the man who pointed that out to me, was Phil Condit, the Chairman of Boeing. He said, "This is happening to Boeing." He hadn't quite thought of it in these terms, but this helped him visualize, and it; even the fact the chairman could see it happening, didn't solve the problem. That's why it's a vexing problem for most of us to deal with.

Dresner:

It seems to me that a lot of companies that recognize it perhaps, might, if they have the assets, go out and buy a disruptive company ; and in most cases, they absorb it, and they destroy the disruptive innovation that's occurring.

먼가 느껴지는게 있지 않은가? 새로운 벤쳐의 행태는.... 완전한 disruption model일 필요가 없다..굳이 편하게 사업하자면... major company 의 사업을 disrupt 할 수 있는 회사를 창업하고 이를 sale 하라.. 훌륭한 exit plan...BM 특허따위에 기댈생각은 아예 하지 말아라...끊임없는 사업화와 매각.... 이것이 급변하는 현실에서 거대자본들 틈바구니 속에서 생존하는 길일지도... 이젠 그 거대자본 속에 있는것도 안전하지 못하다.


Christensen:

That's perfect; that's right.

Dresner:

Is that the norm?

Christensen:

It is, unless they get it. For example now, Cisco, having studied this problem a lot, they just went out and bought Linksys, right? Linksys is the next generation disrupter to Cisco. This is just piddly little wireless routers that will only work in your home, and a little office. But you know exactly what trajectory they're on. So Cisco bought them, but they're keeping them very separate. Historically, Cisco's acquisitions were just systematically integrated into the corporation. But, if they do this right, they'll catch the next wave, even while they maximize the profitability from the current wave.

Dresner:

Presumably, this applies to the public sector as well.

Christensen:

It does, in a lot of ways. We've done a lot of thinking about healthcare for example, and basically, the reason the healthcare industry is so expensive and inconvenient is it hasn't been disrupted. The hospitals have moved to the very high end of their markets; very capable of dealing with extremely sophisticated problems and physicians, similarly, become very capable. The policy-makers' solution is just to somehow get these things to become cheap. It'll never happen. What has to happen is we need to bring technology to less expensive venues of care, to enable them to become more capable. And the same thing to bring technology to nurses, so they can do things they used to need a doctor to do.

That's the solution. We studied education a lot, and the problems transforming K-12 education. In many ways, you can understand why historic reform efforts have failed. If you think about the resources processes values model in Chapter 7, you can see why charter schools are such a critical component of the future solution.

Dresner:

Great. Thank you, this has been good.

Christensen:

Great questions, Howard.

Dresner:

Thanks. Excellent stuff.