Review of The Innovator’s Prescription, by Clayton M. Christensen

So, at long last, I’ve finished The Innovator’s Prescription by Clayton Christensen. This was a bit of a slog, but worth it. In every section, Christensen delivers solid ideas and compelling frameworks to understand and address some of the main problems facing health care in the U.S. I definitely recommend it to anyone looking to dig in more deeply to this issue.

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The banality of health care reform

Insurance…will pay for the amputation of a limb to treat diabetes-related gangrene, but not for the conscientious follow-through that can lessen the probability of needing such costly and tragic remediation. This is not the fault of physicians or insurers. The fault is in the misapplication of a business model that was designed for the practice of acute medicine long ago.

Christensen, The Innovator’s Prescription, p. 164

I’m almost finished with Christensen’s The Innovator’s Prescription, and I still can’t shake the feeling I had 75 pages into the book: although I agree with his assessment of health care in the technical sense, I feel that there’s a moral/ethical dimension to the health care problem that he ignores that simply can’t be ignored.

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Be careful what you wish for

I’m hitting the real meat of The Innovator’s Prescription by Clayton Christensen and came across an example of disruption that I think poses an interesting challenge for leaders in general. It occurs in his larger consideration of the future of the pharmaceutical industry on pages 261 – 309, and concerns supply chain disruption.

Christensen believes that the trend among big pharmas to outsource R&D, clinical trials, manufacturing, and marketing is a mistake–it essentially amounts to emptying an organization of its value-adding activities and handing them over to smaller firms who will eventually come to the fore as market leaders.

As usual, I’ll leave weighing in on this kind of stuff to the experts. But what I do want to discuss is Christensen’s story of the relationship between Dell and ASUSTeK, because I think it’s emblematic of challenges many leaders across a rage of markets face.

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Leadership, focus, and the confusion of business models

As technological and scientific progress enabled standardized processes and treatments for precisely diagnosed disorders, hospitals commingled value-adding processes and solution shop activities within the same institution—resulting in some of the most managerially intractable institutions in the annals of capitalism…”We will do everything for everybody” has never been a viable value proposition for any successful business model that we know of—and yet that’s the value proposition managers and directors of general hospitals feel they are obligated to put forth.

Christensen, The Innovator’s Prescription, p. 75

As I continue to make my way through Clayton Christensen’s The Innovator’s Prescription and deepen my understanding of his take on U.S. health care, I keep stumbling across concepts and analysis that have applicability outside of health care to leadership more generally.

In this post, I want to look at the concept of mixed business models, i.e., “doing everything for everybody”, which Christensen sees as central to how hospitals and doctors can improve the delivery of their services. Here, however, I want to move the discussion beyond health care to consider how mixed business models present a challenge for leaders in any industry.

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Centrifugal and centripetal leadership

I’m reading The Innovator’s Prescription, Clayton M. Christensen’s excellent analysis of the health care problem facing the United States. It’s a long book (almost 500 pages), and I’m only 30 or so pages into it, but it’s already turned out to be quite thought-provoking.

One concept in particular caught my attention so far: the idea of decentralizing versus centralizing product development. Christensen introduces it to sketch out where he thinks disruptive innovations in the medical device industry will come from.

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