Ron Adner - Winning the Right Game: How to Disrupt, Defend, and Deliver in a Changing World

Management on the Cutting Edge Series

Paul Michelman, series editor

Published in cooperation with MIT Sloan Management Review

The AI Advantage: How to Put the Artificial Intelligence Revolution to Work

Thomas H. Davenport

The Technology Fallacy: How People Are the Real Key to Digital Transformation

Gerald C. Kane, Anh Nguyen Phillips, Jonathan Copulsky, and Garth Andrus

Designed for Digital: How to Architect Your Business for Sustained Success

Jeanne W. Ross, Cynthia Beath, and Martin Mocker

See Sooner, Act Faster: How Vigilant Leaders Thrive in an Era of Digital Turbulence

George S. Day and Paul J. H. Schoemaker

Leading in the Digital World: From Productivity and Process to Creativity and Collaboration

Amit S. Mukherjee

The Ends Game: How Smart Companies Stop Selling Products and Start Delivering Value

Marco Bertini and Oded Koenigsberg

Open Strategy: Mastering Disruption from Outside the C-Suite

Christian Stadler, Julia Hautz, Kurt Matzler, and Stephan Friedrich von den Eichen

The Transformation Myth: Leading Your Organization through Uncertain Times

Gerald C. Kane, Rich Nanda, Anh Nguyen Phillips, and Jonathan R. Kopulsky

Winning the Right Game: How to Disrupt, Defend, and Deliver in a Changing World

Ron Adner

Winning the Right Game

How to Disrupt, Defend, and Deliver in a Changing World

Ron Adner

The MIT Press

Cambridge, Massachusetts

London, England

2021 Ron Adner

All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher.

The MIT Press would like to thank the anonymous peer reviewers who provided comments on drafts of this book. The generous work of academic experts is essential for establishing the authority and quality of our publications. We acknowledge with gratitude the contributions of these otherwise uncredited readers.

Library of Congress Cataloging-in-Publication Data

Names: Adner, Ron, author.

Title: Winning the right game : how to disrupt, defend, and deliver in a changing world / Ron Adner.

Description: Cambridge, Massachusetts : The MIT Press, [2021] | Series: Management on the cutting edge series | Includes bibliographical references and index.

Identifiers: LCCN 2020054536 | ISBN 9780262045469 (hardcover)

Subjects: LCSH: Management. | Organizational change. | Strategic planning. | Disruptive technologies.

Classification: LCC HD31.2 .A36 2021 | DDC 658.4/063--dc23

LC record available at https://lccn.loc.gov/2020054536

d_r0

To everyone striving to change the world for the better.

List of Figures

Plan of the book.

The technology shifts that underlie the transition from optical imaging to digital imaging.

Value architecture of Kodaks underlying value proposition of reliving and sharing memories through images.

The relationship between the key constructs of customer insight, value proposition, value architecture, and activities, highlighting the value architecture as a new level of analysis.

Generation 1 value architecture for Kodak.

Transition from Generation 1 to Generation 2 within the Kodak value architecture.

Transition to Generation 3 within the Kodak value architecture.

All four digital imaging transitions within the Kodak value architecture, highlighting the impact of horizontal, cross-box dynamics in Generation 4.

Standard characterizations of the relationship between a focal firms own outcomes and the effectiveness of rivals and substitutes (left) and complementors (right).

The three possible relationships between the effectiveness of complementors and a focal firms own outcomes (examples are for a focal firm focused on profiting from digital printing consumables).

Wayfairs initial value architecture.

Wayfairs value architecture circa 2014, showing the addition of Discovery as a new value element and with new links (marked in bold).

Wayfairs enhanced value architecture, with addition of the Deliberation element and new links (marked in bold).

TomToms value architecture in personal navigation devices.

Googles value architecture adds User information as an element.

Spotify (and Apples) initial value architecture for music streaming.

Spotifys enhanced value architecture, adding elements Discovery and Artist engagement and new links (in bold).

Spotifys revised value architecture, showing the broken Artist Direct link, and adding Podcasts as an element of value (in bold).

Ecosystem construction chart for Amazon Alexa.

Oprah Winfreys carryover into new ecosystems.

Ecosystem construction diagram for ASSA ABLOY in intelligent access.

The traditional innovation race, characterized in terms of relative performance trajectories of the new versus old technologies. Market disruption occurs at point A.

Competition between a new value proposition subject to ecosystem emergence challenges (solid black line) and an old value proposition (solid grey line) characterized in terms of relative value creation. The time to market disruption relative to pure technology case (dotted black line) is delayed from point A to point B.

Competition between the new value proposition with no emergence challenges (solid black line) and the old value proposition benefiting from extension opportunities (solid grey line). The time to market disruption relative to the no-extension-opportunity case (dotted gray line) is delayed from point A to point C.

Emergence challenges holding back the new value proposition interact with extension opportunities for the old value proposition to dramatically delay the time of disruption and the performance level required for disruption from point A to point D.

The ego-system trap arises when participants assume that their own aspiration to lead will be embraced by the partners on which they depend, not recognizing that those partners may have the very same ambition.

The hierarchy of ecosystem winners and losers does not divide into leaders and followers.

The ecosystem cycle of emergence and maturity and the leadership challenges associated with each phase of the cycle.

Microsoft annual worldwide revenue for fiscal years 20002020.

Microsoft share price.

The ecosystem cycle highlighting the transition of leadership roles, and the employment of ecosystem carryover to facilitate transitioning across ecosystem boundaries.

Winning the right game.

List of Table

A framework for analyzing the pace of ecosystem disruption

The world does not lack for management ideas. Thousands of researchers, practitioners, and other experts produce tens of thousands of articles, books, papers, posts, and podcasts each year. But only a scant few promise to truly move the needle on practice, and fewer still dare to reach into the future of what management will become. It is this rare breed of ideameaningful to practice, grounded in evidence, and