Archive for May 8th, 2012

“Disruptive innovation” … an incomplete idea ?

May 8, 2012

In AMS, we’ve being reading about Clayton Christensen’s theories on disruptive innovation.

For background, see last weeks post disruptive innovation.

This week, Business Week has a feature article on Christensen — focusing on his life values — but also summarizing his research work, including some criticism.

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Criticism of Disruptive Innovation

If there has been one knock against Christensen’s theories, it’s that they are better as analysis than as a course of action.

It’s something Christensen and an impressive network of co-authors and collaborators have worked hard to dispel. 

“The theory is more descriptive than prescriptive,” says Larry Keeley, the co-founder of Doblin, a strategic consulting firm in Chicago, who considers Christensen a peer and a friend.

“There are very few robust intellectuals working on innovation, and I don’t mean to take anything away from Clay’s accomplishment when I say this, but …

[the disruption theory] strikes me as an incomplete idea.”

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Christensen on life values:

To understand a company’s strategy, look at what they actually do rather than what they say they do

The same logic applies to one’s life. For example, ambitious people will reliably tell you that family, or being a mother or father, is the most important thing in their lives.

Yet when pressed to choose between racing home to deal with a chaotic pre-bedtime scene and staying another hour at the office to solve a problem, they will usually keep working.

It’s these small, everyday decisions that reveal if you’re following a path to being the best possible spouse and parent.

“If your family matters most to you, when you think about all the choices you’ve made with your time in a week, does your family come out on top?”

Full article

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“Unintended consequences” … say, what?

May 8, 2012

There was a report released last week by the House Ways and Means Committee.

It didn’t get much mass media coverage, perhaps, because of its title: “Why ObamaCare Will Force Americans to Lose the Health Care Coverage They Have and Like

The essence of the report: many Fortune 100 companies expected to drop their health insurance plans and, instead, pay the $2,000 per employee ObamaCare “penalty”.

First, the facts:

The House Ways and Means Committee asked for and received, on a confidential basis, information on the cost and coverage of the health insurance plans for the Fortune 100 companies.

In total, the Committee received information from 71 Fortune 100 companies.

In total, the 71 Fortune 100 companies that responded to this inquiry could save an estimated $28.6 billion in 2014 alone by eliminating health insurance coverage for their more than 5.9 million U.S. employees (impacting more than 10.2 million employees and dependents covered by those plans) and instead paying the $2,000 per full-time employee fine created in the Democrats’ health care law.

From 2014 through 2023, these employers could save an astounding $422.4 billion if they took this action.


Most (all ?) of the cable and radio pundits were calling big company plans to be an unintended consequence of ObamaCare.

I beg to differ.  I think it’s completely intended.

Thank about it: Team Obama often said that they wanted a “single payer system”.

English translation: everybody gets covered by government administered  health insurance.  Everybody.

So, they put a lowball number on the penalty.

Companies usually pay more than $5,000 per employee … often more … sometimes way more.

It’s a no-brainer for companies to ditch their plans, pay the penalty, and force their employees onto the government program.

But, that’ll make ObamaCare more costly.

How will it get paid for?

Easy, just jack up the ‘per employee’ penalties.

The penalties are already programmed to go to $10,000 in 2024.

What’s to keep them from going even higher?

Answer; nothing.

Now ponder that for a moment

Many (most?) companies will be paying an escalating “headcount tax”.

The more employees they hire, the higher the tax bill.

How do you think that’ll impact the sluggish job growth?

I’m betting it won’t help …

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