Balancing Innovation and Customer Service
Clayton M. Christensen is a professor of business administration at the Harvard Business School. He is the bestselling author of five books, including his seminal work, The Innovator's Dilemma, which received the Global Business Book Award for the best business book of the year, and most recently, The Innovator's Prescription, which examines how to fix our healthcare system. Christensen serves on several public and privately traded boards and is the founder of a successful consulting company and an investment management firm. He holds a B.A. with highest honors in economics from Brigham Young University and an M.Phil. in applied econometrics and the economics of less-developed countries from Oxford University, where he studied as a Rhodes Scholar; he received an MBA with high distinction from the Harvard Business School in 1979, graduating as a George F. Baker Scholar, and was awarded his DBA from the Harvard Business School in 1992.
Question: How can established companies pursue disruptive innovation but yet continue to satisfy their customer base?
Christensen: Well, every business model is an optimized and interdependent system. So, a business model starts with a value proposition that you want to offer to a particular customer base. In order to deliver that value proposition, you’ve got to put into place a set of resources in your company. So, these are people, technology, products, equipment, facilities, and so on. As you use the resources to deliver the value proposition, process is coalesced, just habitual ways of getting things done. And then, as you follow the processes to use the resources to deliver the value proposition, a profit formula ultimately emerges, and the profit formula basically set, dictates how you make money. In order to cover the cost of these resources, we need these kind of gross margins. To break even, we’ve got to be this big. We have to turn the assets over at this pace in order to get adequate returns. And that profit formula then determines the kinds of value propositions that business model can and cannot offer, and, very quickly, all of those four elements of the business model, the value proposition, your resources, your processes and your profit model become interlocked, and it’s actually designed not to change. So, the only way a corporation can continue to lead in the original market it’s serving and also become a leader in a disruptive market is to set up a completely independent business unit underneath the corporate umbrella and give it a charter to create a different economic model for the different need in the market place. And if a, when a corporation is willing to do that, they can succeed at disruptive innovations very well. If they’re not willing to do it, the probability of their success is nearly zero. It’s kind of like in biological evolution. Individual organisms don’t evolve. They are born, they die, but, little by little, the mutants gain market share, and so the population can evolve, even though the individuals within it do not. And the same thing holds true for corporations. The business units within a corporation don’t evolve. They’re designed to profitably serve a particular set of customers who have a particular job to be done, but if the corporation will close down obsolete business units and create new business models, the corporation can evolve quite well. IBM has done that very well, three times created very different economic models as the computer industry has evolved. But they’re the only computer maker from the ‘60s, ‘70s that has survived to this date. When discount retailing emerged, Dayton Hudson in Minneapolis set up a different business model that it called Target, and they were the only department store to catch the wave of discount retailing. All the other 315 department stores have consolidated down now to about 8 because they haven’t created this independent business model.
The Harvard Business School professor on how to live in the present and the future.
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The COVID-19 pandemic is making health disparities in the United States crystal clear. It is a clarion call for health care systems to double their efforts in vulnerable communities.
- The COVID-19 pandemic has exacerbated America's health disparities, widening the divide between the haves and have nots.
- Studies show disparities in wealth, race, and online access have disproportionately harmed underserved U.S. communities during the pandemic.
- To begin curing this social aliment, health systems like Northwell Health are establishing relationships of trust in these communities so that the post-COVID world looks different than the pre-COVID one.
COVID-19 deepens U.S. health disparities<p>Communities on the pernicious side of America's health disparities have their unique histories, environments, and social structures. They are spread across the United States, but they all have one thing in common.</p><p>"There is one common divide in American communities, and that is poverty," said <a href="https://www.northwell.edu/about/leadership/debbie-salas-lopez" target="_blank">Debbie Salas-Lopez, MD, MPH</a>, senior vice president of community and population health at Northwell Health. "That is the undercurrent that manifests poor health, poor health outcomes, or poor health prognoses for future wellbeing."</p><p>Social determinants have far-reaching effects on health, and poor communities have unfavorable social determinants. To pick one of many examples, <a href="https://www.npr.org/2020/09/27/913612554/a-crisis-within-a-crisis-food-insecurity-and-covid-19" target="_blank" rel="noopener noreferrer">food insecurity</a> reduces access to quality food, leading to poor health and communal endemics of chronic medical conditions. The U.S. Centers for Disease Control and Prevention has identified some of these conditions, such as obesity and Type 2 diabetes, as increasing the risk of developing a severe case of coronavirus.</p><p>The pandemic didn't create poverty or food insecurity, but it exacerbated both, and the results have been catastrophic. A study published this summer in the <em><a href="https://link.springer.com/article/10.1007/s11606-020-05971-3" target="_blank">Journal of General Internal Medicine</a></em> suggested that "social factors such as income inequality may explain why some parts of the USA are hit harder by the COVID-19 pandemic than others."</p><p>That's not to say better-off families in the U.S. weren't harmed. A <a href="https://voxeu.org/article/poverty-inequality-and-covid-19-us" target="_blank" rel="noopener noreferrer">paper from the Centre for Economic Policy Research</a> noted that families in counties with a higher median income experienced adjustment costs associated with the pandemic—for example, lowering income-earning interactions to align with social distancing policies. However, the paper found that the costs of social distancing were much greater for poorer families, who cannot easily alter their living circumstances, which often include more individuals living in one home and a reliance on mass transit to reach work and grocery stores. They are also disproportionately represented in essential jobs, such as retail, transportation, and health care, where maintaining physical distance can be all but impossible.</p><p>The paper also cited a positive correlation between higher income inequality and higher rates of coronavirus infection. "Our interpretation is that poorer people are less able to protect themselves, which leads them to different choices—they face a steeper trade-off between their health and their economic welfare in the context of the threats posed by COVID-19," the authors wrote.</p><p>"There are so many pandemics that this pandemic has exacerbated," Dr. Salas-Lopez noted.</p><p>One example is the health-wealth gap. The mental stressors of maintaining a low socioeconomic status, especially in the face of extreme affluence, can have a physically degrading impact on health. <a href="https://www.scientificamerican.com/index.cfm/_api/render/file/?method=inline&fileID=123ECD96-EF81-46F6-983D2AE9A45FA354" target="_blank" rel="noopener noreferrer">Writing on this gap</a>, Robert Sapolsky, professor of biology and neurology at Stanford University, notes that socioeconomic stressors can increase blood pressure, reduce insulin response, increase chronic inflammation, and impair the prefrontal cortex and other brain functions through anxiety, depression, and cognitive load. </p><p>"Thus, from the macro level of entire body systems to the micro level of individual chromosomes, poverty finds a way to produce wear and tear," Sapolsky writes. "It is outrageous that if children are born into the wrong family, they will be predisposed toward poor health by the time they start to learn the alphabet."</p>Research on the economic and mental health fallout of COVID-19 is showing two things: That unemployment is hitting <a href="https://www.pewsocialtrends.org/2020/09/24/economic-fallout-from-covid-19-continues-to-hit-lower-income-americans-the-hardest/" target="_blank" rel="noopener noreferrer">low-income and young Americans</a> most during the pandemic, potentially widening the health-wealth gap further; and that the pandemic not only exacerbates mental health stressors, but is doing so at clinically relevant levels. As <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7413844/" target="_blank" rel="noopener noreferrer">the authors of one review</a> wrote, the pandemic's effects on mental health is itself an international public health priority.
Working to close the health gap<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDc5MDk1MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxNTYyMzQzMn0.KSFpXH7yHYrfVPtfgcxZqAHHYzCnC2bFxwSrJqBbH4I/img.jpg?width=980" id="b40e2" class="rm-shortcode" data-rm-shortcode-id="1b9035370ab7b02a0dc00758e494412b" data-rm-shortcode-name="rebelmouse-image" />
Northwell Health coronavirus testing center at Greater Springfield Community Church.
Credit: Northwell Health<p>Novel coronavirus may spread and infect indiscriminately, but pre-existing conditions, environmental stressors, and a lack of access to care and resources increase the risk of infection. These social determinants make the pandemic more dangerous, and erode communities' and families' abilities to heal from health crises that pre-date the pandemic.</p><p>How do we eliminate these divides? Dr. Salas-Lopez says the first step is recognition. "We have to open our eyes to see the suffering around us," she said. "Northwell has not shied away from that."</p><p>"We are steadfast in improving health outcomes for our vulnerable and underrepresented communities that have suffered because of the prevalence of chronic disease, a problem that led to the disproportionately higher death rate among African-Americans and Latinos during the COVID-19 pandemic," said Michael Dowling, Northwell's president and CEO. "We are committed to using every tool at our disposal—as a provider of health care, employer, purchaser and investor—to combat disparities and ensure the <a href="https://www.northwell.edu/education-and-resources/community-engagement/center-for-equity-of-care" target="_blank" rel="noopener noreferrer">equity of care</a> that everyone deserves." </p><p>With the need recognized, Dr. Salas-Lopez calls for health care systems to travel upstream and be proactive in those hard-hit communities. This requires health care systems to play a strong role, but not a unilateral one. They must build <a href="https://www.northwell.edu/news/insights/faith-based-leaders-are-the-key-to-improving-community-health" target="_blank" rel="noopener noreferrer">partnerships with leaders in those communities</a> and utilize those to ensure relationships last beyond the current crisis. </p><p>"We must meet with community leaders and talk to them to get their perspective on what they believe the community needs are and should be for the future. Together, we can co-create a plan to measurably improve [community] health and also to be ready for whatever comes next," she said.</p><p>Northwell has built relationships with local faith-based and community organizations in underserved communities of color. Those partnerships enabled Northwell to test more than 65,000 people across the metro New York region. The health system also offered education on coronavirus and precautions to curb its spread.</p><p>These initiatives began the process of building trust—trust that Northwell has counted on to return to these communities to administer flu vaccines to prepare for what experts fear may be a difficult flu season.</p><p>While Northwell has begun building bridges across the divides of the New York area, much will still need to be done to cure U.S. health care overall. There is hope that the COVID pandemic will awaken us to the deep disparities in the US.</p><p>"COVID has changed our world. We have to seize this opportunity, this pandemic, this crisis to do better," Dr. Salas-Lopez said. "Provide better care. Provide better health. Be better partners. Be better community citizens. And treat each other with respect and dignity.</p><p>"We need to find ways to unify this country because we're all human beings. We're all created equal, and we believe that health is one of those important rights."</p>
Shannon Lee shares lessons from her father in her new book, "Be Water, My Friend: The Teachings of Bruce Lee."
- Bruce Lee would have turned 80 years old on November 27, 2020. The legendary actor and martial artist's daughter, Shannon Lee, shares some of his wisdom and his philosophy on self help in a new book titled "Be Water, My Friend: The Teachings of Bruce Lee."
- In this video, Shannon shares a story of the fight that led to her father beginning a deeper philosophical journey, and how that informed his unique expression of martial arts called Jeet Kune Do.
- One lesson passed down from Bruce Lee was his use and placement of physical symbols as a way to help "cement for yourself this new way of being, or this new lesson you've learned." By working on ourselves (with the right tools), we can develop the skills necessary to rise and conquer new challenges.
How to deal with "epistemic exhaustion."
Philosopher Nick Bostrom's "singleton hypothesis" predicts the future of human societies.
- Nick Bostrom's "singleton hypothesis" says that intelligent life on Earth will eventually form a "singleton".
- The "singleton" could be a single government or an artificial intelligence that runs everything.
- Whether the singleton will be positive or negative depends on numerous factors and is not certain.
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A strange object found in Utah desert has prompted worldwide speculation about its origins.
- A monolithic object found in a remote part of Utah caused worldwide speculation about its origins.
- The object is very similar to the famous monolith from Stanley Kubrick's "2001: Space Odyssey".
- The object could be work of an artist or even have extraterrestrial origins.
1. ART OBJECT<p>Chances are, this is an art object. The shiny "monolith" appears to be bolted to the ground and made of metal. It also seems to be fastened with rivets, rather being a uniform block of more unexplainable production origin. Deserts are great places for unusual art installations as has been evidenced by art projects you can discover wondering through the desert ghost towns and faraway canyons of Nevada, California, Utah and New Mexico. Certainly, an artist with a sense of humor and an appreciation of Kubrick's genius could have installed such "sculpture" in hopes of exactly what is happening right now – viral fame.</p><p>On the other hand, there is evidence, courtesy of eagle-eyed <a href="https://www.reddit.com/r/news/comments/jzkpad/helicopter_pilot_finds_strange_monolith_in_remote/gdg9qfi?utm_source=share&utm_medium=web2x&context=3" target="_blank">Google Earth sleuths</a>, that the object appeared in that location (somewhere near <a href="https://www.nps.gov/cany/index.htm" target="_blank" rel="noopener noreferrer">Canyonlands National Park</a>) in 2015-2016. So it's possibly been there for a few years. Would an artist have placed it there so long ago with the aim of having this type of success eventually?</p><p>A gallery owner <a href="https://www.9news.com.au/world/utah-monolith-desert-mystery-solved-john-mccracken-sculptor-artist-2001-a-space-odyssey/0bae1a27-5bd2-451e-90a6-393928d9ed02" target="_blank">claimed</a> the work may be a tribute to the art of the late artist John McCracken, who created similar-looking objects before he died in 2011. McCracken was part of the Light and Space movement with such artists as James Turrell, and was known to make his sculptures from plywood forms that were coated with fiberglass and polyester resin.</p><p>While the theory that the monolith was the work of a McCracken aficionado (or the artist himself) may hold some water due to the object's similarity, the fact that the artist died so long ago and the lack of clear incentive for anyone to have planted this years ago only to reveal it now work against this theory.</p>
John McCracken sculptures.