Clayton Christensen’s Lessons for Capitalizing in a Recession
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 companies benefit from a down market?
Christensen: There are a lot of examples of how a company can do this. Let me point to Huntsman Chemical as one example. Huntsman Chemical builds or makes commodity chemicals of various types, polystyrene and so on. What they have done is when you’re in the bottom of a recession, cash strap companies whose volumes have dropped so much in a scale intensive or fixed cost business like chemicals are very willing to unload their capacity at [fire sale] prices. And so what Huntsman has done over the years is he’s bought these plants from competing companies when they were cheap, when demand was low, to have it available so that when the industry picks up again, he’s got the capacity to catch the increase in demand and grow the business. Andrew Carnegie did the same thing in the steel industry. He always invested to build capacity when the market was down so that he could then catch the wave of growth that followed the recession. So that’s one way how the strong can become stronger, is if they take action now to build capacity so that they’re there for the upswing. The second way is to disrupt because disruption always brings to the market products and services that are more affordable, and during a recession, more affordable products face a much larger demand as the demand for luxury products decline. And so it’s really a great opportunity for disruptive innovation as well.
Question: What do companies do wrong during recessions?
Christensen: They layoff the wrong people. And one of the dilemmas, of course, is it’s the people at the top who constitute the true overhead of the business, they’re the ones who decide who ought to be laid off and, of course, the instinct of most people is not to layoff themselves. And so they look below them at who can we let go. Generally, the most important people to keep are those that are involved in developing the next generation products. If you keep them, then when the economy turns, you’re ready to blowout a new wave of growth. And you also want to keep your sales people, because they’re the ones who keep the customers’ fires going. They’re the ones that can learn, you know, how the customers are doing in this turnaround business, so they’re the wrong people to layoff. The right people to layoff are the true administrative overhead people who are looking after today but aren’t laying the foundation for tomorrow’s growth.
Clayton Christensen on how companies can thrive in a down market.
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What is human dignity? Here's a primer, told through 200 years of great essays, lectures, and novels.
- Human dignity means that each of our lives have an unimpeachable value simply because we are human, and therefore we are deserving of a baseline level of respect.
- That baseline requires more than the absence of violence, discrimination, and authoritarianism. It means giving individuals the freedom to pursue their own happiness and purpose.
- We look at incredible writings from the last 200 years that illustrate the push for human dignity in regards to slavery, equality, communism, free speech and education.
The inherent worth of all human beings<p>Human dignity is the inherent worth of each individual human being. Recognizing human dignity means respecting human beings' special value—value that sets us apart from other animals; value that is intrinsic and cannot be lost.</p> <p>Liberalism—the broad political philosophy that organizes society around liberty, justice, and equality—is rooted in the idea of human dignity. Liberalism assumes each of our lives, plans, and preferences have some unimpeachable value, not because of any objective evaluation or contribution to a greater good, but simply because they belong to a human being. We are human, and therefore deserving of a baseline level of respect. </p> <p>Because so many of us take human dignity for granted—just a fact of our humanness—it's usually only when someone's dignity is ignored or violated that we feel compelled to talk about it. </p> <p>But human dignity means more than the absence of violence, discrimination, and authoritarianism. It means giving individuals the freedom to pursue their own happiness and purpose—a freedom that can be hampered by restrictive social institutions or the tyranny of the majority. The liberal ideal of the good society is not just peaceful but also pluralistic: It is a society in which we respect others' right to think and live differently than we do.</p>
From the 19th century to today<p>With <a href="https://books.google.com/ngrams/graph?year_start=1800&year_end=2019&content=human+dignity&corpus=26&smoothing=3&direct_url=t1%3B%2Chuman%20dignity%3B%2Cc0" target="_blank" rel="noopener noreferrer">Google Books Ngram Viewer</a>, we can chart mentions of human dignity from 1800-2019.</p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDg0ODU0My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MTUwMzE4MX0.bu0D_0uQuyNLyJjfRESNhu7twkJ5nxu8pQtfa1w3hZs/img.png?width=980" id="7ef38" class="rm-shortcode" data-rm-shortcode-id="9974c7bef3812fcb36858f325889e3c6" data-rm-shortcode-name="rebelmouse-image" />
American novelist, writer, playwright, poet, essayist and civil rights activist James Baldwin at his home in Saint-Paul-de-Vence, southern France, on November 6, 1979.
Credit: Ralph Gatti/AFP via Getty Images
The future of dignity<p>Around the world, people are still working toward the full and equal recognition of human dignity. Every year, new speeches and writings help us understand what dignity is—not only what it looks like when dignity is violated but also what it looks like when dignity is honored. In his posthumous essay, Congressman Lewis wrote, "When historians pick up their pens to write the story of the 21st century, let them say that it was your generation who laid down the heavy burdens of hate at last and that peace finally triumphed over violence, aggression and war."</p> <p>The more we talk about human dignity, the better we understand it. And the sooner we can make progress toward a shared vision of peace, freedom, and mutual respect for all. </p>
Researchers dramatically improve the accuracy of a number that connects fundamental forces.
- A team of physicists carried out experiments to determine the precise value of the fine-structure constant.
- This pure number describes the strength of the electromagnetic forces between elementary particles.
- The scientists improved the accuracy of this measurement by 2.5 times.
The process for measuring the fine-structure constant involved a beam of light from a laser that caused an atom to recoil. The red and blue colors indicate the light wave's peaks and troughs, respectively.
Scientists at Washington University are patenting a new electrolyzer designed for frigid Martian water.
- Mars explorers will need more oxygen and hydrogen than they can carry to the Red Planet.
- Martian water may be able to provide these elements, but it is extremely salty water.
- The new method can pull oxygen and hydrogen for breathing and fuel from Martian brine.
The WashU electrolyzer<iframe src='https://mars.nasa.gov/layout/embed/model/?s=6' width='800' height='450' scrolling='no' frameborder='0' allowfullscreen></iframe><p>The WashU electrolyzer—it has no snappy acronym yet—will not be the first device capable of extracting oxygen from Martian water. That honor goes to the Mars Oxygen In-Situ Resource Utilization Experiment, or <a href="https://mars.nasa.gov/mars2020/spacecraft/instruments/moxie/" target="_blank">MOXIE</a>, which is en route to Mars onboard NASA's <a href="https://mars.nasa.gov/mars2020/" target="_blank">Perseverance</a> rover. The rover was launched on July 30, 2020. It will arrive on February 18, 2021, and will perform high-temperature <a href="https://en.wikipedia.org/wiki/Electrolysis_of_water" target="_blank">electrolysis</a> to extract pure oxygen, but no hydrogen.</p><p>In addition to being able to capture hydrogen, the WashU system can even do a better job with oxygen than MOXIE can, extracting 25 times as much from the same amount of water.</p><p>The new system has no problem with Mars' magnesium perchlorate-laced water. On the contrary, the researchers say it ultimately makes their system work better since such high concentrations of salt keep water from freezing on such a cold a planet by lowering the liquid's freezing temperature to -60 °C. He adds it may "also improve the performance of the electrolyzer system by lowering the electrical resistance."</p><p>Cold itself is no issue for the WashU system. It's been tested in a sub-zero (-33 ⁰F, or -36 ⁰C) environment that simulates Mars'.</p><p>"Our novel brine electrolyzer incorporates a lead <a href="https://www.sciencedirect.com/science/article/abs/pii/S0926337318311299" target="_blank">ruthenate pyrochlore</a> <a href="https://en.wikipedia.org/wiki/Anode" target="_blank" rel="noopener noreferrer">anode</a> developed by our team in conjunction with a platinum on carbon <a href="https://en.wikipedia.org/wiki/Cathode" target="_blank">cathode</a>," explains Ramani. He adds, "These carefully designed components coupled with the optimal use of traditional electrochemical engineering principles has yielded this high performance."</p>
Back home<p>"This technology is equally useful on Earth where it opens up the oceans as a viable oxygen and fuel source," Ramani notes. His colleagues forsee potential applications such as producing oxygen in deep-sea habitats with ample water available, such as underwater research facilities and submarines.</p><p>The study's joint first author Pralay Gayen says that "having demonstrated these electrolyzers under demanding Martian conditions, we intend to also deploy them under much milder conditions on Earth to utilize brackish or salt water feeds to produce hydrogen and oxygen, for example, through seawater electrolysis."</p>
Scientists find that bursts of gamma rays may exceed the speed of light and cause time-reversibility.
- Astrophysicists propose that gamma-ray bursts may exceed the speed of light.
- The superluminal jets may also be responsible for time-reversibility.
- The finding doesn't go against Einstein's theory because this effect happens in the jet medium not a vacuum.
Jet bursting out of a blazar. Black-hole-powered galaxies called blazars are the most common sources detected by NASA's Fermi Gamma-ray Space Telescope.
Cosmic death beams: Understanding gamma ray bursts<div class="rm-shortcode" data-media_id="cu2knVEk" data-player_id="FvQKszTI" data-rm-shortcode-id="c6cfd20fdf31c82cb206ade8ce21ba3f"> <div id="botr_cu2knVEk_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/cu2knVEk-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/cu2knVEk-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/cu2knVEk-FvQKszTI.js"></script> </div>
Pfizer's vaccine needs to be kept at -100°F until it's administered. Can caregivers deliver?
- Fair distribution of the Moderna and Pfizer vaccines is especially challenging because they need to be stored at extremely cold temperatures.
- Back in 2018, the WHO reported that over half of all vaccines are wasted worldwide due to lack of cold storage, and they were only talking about vaccines that need to be chilled or kept at standard freezer temperatures.
- Real-time logistics data, location tracking, and information about movements are crucial to track shipment progress, product temperature and other conditions.