Complacency bad. Foresight good.

Why do firms fail when faced with new technology or innovation? Clayton M. Christensen’s theory of disruptive technology asserts that the dominant/incumbent firm dismisses the early version of the technology as inferior and fails to respond to its development. But a study titled “Demystifying Disruption,” by Ashish Sood and Gerard Tellis, finds that incumbents produced disruptive (replacement) technologies just as often as those pesky up-starts.

The results of their analysis suggest that many aspects of the disruptive technologies theory are exaggerated.

In fact, the incumbents produced more than half of the new technologies that superseded the previous dominant technology.

In other words, Tellis says, the start-up slaying Goliath makes a good story, but represents only a small fraction of all cases. Continue reading “Complacency bad. Foresight good.”

CFOs predict: The top business risks through 2009

Top five business risks through 2009:

  1. Competition
  2. Pricing and currency
  3. Economy
  4. Supply chain
  5. Property*

* Fire/explosion, mechanical/electrical breakdown, natural disaster

Note: 62% of financial executives expect risk from competition to increase through 2009, while only 4% expect it to decrease.

Top five emerging business risks through 2009:

  1. Change in competition
  2. Government/regulation
  3. Pricing volatility
  4. Variable client demand
  5. Political threat

Note: Terrorism, and pandemic, ranked very low.

Base: Survey of 500 financial executives in North America and Europe (including CFOs and treasurers) who work for companies with at least US$500 million or more in annual revenue.

Source: “Managing Business Risk Through 2009 and Beyond,” FM Global, a property and casualty insurer, Johnston, R.I., May 2007

Related: What CFOs worry about

Disruptive innovation, defined

Jose de Francisco Lopez, co-founder of, a research and management consulting firm focused on innovation practices, offers a framework for understanding different types of innovation. (It’s worth checking out the blog link to see his diagram.) Along the way, he tries to define various types of innovation, including disruptive, transformational, incremental and gradual innovation. Some of the definitions are stronger than others. Below — with some editing and paraphrasing (by me) — is his definition of disruptive innovation. See what you think.

Disruptive innovation: Technical or business breakthroughs that “change the rules of the game,” involve a relatively fast rollout and leapfrog established vendors. A successful disruptive innovation drives the market to a point of no return: creating new value, and rendering former solutions obsolete.

Competitors could sabotage your Web site’s search-engine ranking

Search engine optimization (SEO) is the effort to get a Web site a higher ranking (more visibility) in search engines such as Google. But there’s a flip side: The same SEO professionals also know the tricks to pushing a competitor’s Web site down in the search-engine rankings. It’s called “negative SEO,” according to a recent article in Forbes magazine (“The Saboteurs Of Search,” 28 June 2007).

SEO expert/blogger Hamlet Batista isn’t amused. He says:

These so-called “SEO professionals” proudly proclaim their job to be damaging the hard-earned rankings of their clients’ competitors. I understand a lot of people would do anything for money, but it’s still unsettling to see such people trumpet their efforts with such gusto. A huge thumbs-down to all those mentioned in the article.

Earning high search-engine rankings is challenging enough. Now we need to work twice as hard to protect the rankings once we earn them.

The Forbes article lists seven ways to damage a competitor’s ranking. Batista’s post provides the countermeasures, i.e., “things you can do to detect, prevent and protect your rankings from these types of attacks.” One example from the post, 10 ways to protect your site from negative SEO:

Anti-Google bowling. This attack makes your link structure look spammy, potentially causing Google and other search engines to believe your rankings are undeserved. The way to protect your site from this is to monitor your incoming links and their anchor text. Google’s webmaster central provides all the information you need for this purpose. Any site-wide links you are not familiar with, links with strange anchor text (usually porn), etc., are a clear indication that your site is being attacked. Contact the site owners that host the links and politely request they take them down. A cease-and-desist letter should do the trick, too — but only as a last resort.

“Negative SEO” — Harming Your Competitors With SEO (Search Engine Land)
Negative SEO is Possible, Yet Difficult, Says Matt Cutts (Search Engine Roundtable)
Negative SEO (Black SEO) Tactics — Fighting Dirty (FantomNews)

What high-tech strategic planners really want to know about rivals

What are the main areas of competition that your company seeks to measure and monitor?

Technology innovation (119 responses)
Customer loyalty and composition (84)
Product composition (77)
Technology infrastructure (54)
Product capacity and strength (53)
Talent acquisition and management (52)
Time to market (49)
Survey base: 181 strategy executives at high-tech companies; multiple responses allowed
Source: “Competition at the Crossroads,” Deloitte Consulting LP and BPM Forum, June 2007