Theory

Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns

A crash course in the business of learning-from the bestselling author of The Innovator's Dilemma and The Innovator's Solution…

“A brilliant teacher, Christensen brings clarity to a muddled and chaotic world of education.”
-Jim Collins, bestselling author of Good to Great

According to recent studies in neuroscience, the way we learn doesn't always match up with the way we are taught. If we hope to stay competitive-academically, economically, and technologically-we need to rethink our understanding of intelligence, reevaluate our educational system, and reinvigorate our commitment to learning. In other words, we need “disruptive innovation.”

Now, in his long-awaited new book, Clayton M. Christensen and coauthors Michael B. Horn and Curtis W. Johnson take one of the most important issues of our time-education-and apply Christensen's now-famous theories of “disruptive” change using a wide range of real-life examples. Whether you're a school administrator, government official, business leader, parent, teacher, or entrepreneur, you'll discover surprising new ideas, outside-the-box strategies, and straight-A success stories.

You'll learn how

• Customized learning will help many more students succeed in school
• Student-centric classrooms will increase the demand for new technology
• Computers must be disruptively deployed to every student
• Disruptive innovation can circumvent roadblocks that have prevented other attempts at school reform
• We can compete in the global classroom-and get ahead in the global market

Filled with fascinating case studies, scientific findings, and unprecedented insights on how innovation must be managed, Disrupting Class will open your eyes to new possibilities, unlock hidden potential, and get you to think differently. Professor Christensen and his coauthors provide a bold new lesson in innovation that will help you make the grade for years to come.

The future is now. Class is in session.

When Genius Failed: The Rise and Fall of Long-Term Capital Management

On September 23, 1998, the boardroom of the New York Fed was a tense place. Around the table sat the heads of every major Wall Street bank, the chairman of the New York Stock Exchange, and representatives from numerous European banks, each of whom had been summoned to discuss a highly unusual prospect: rescuing what had, until then, been the envy of them all, the extraordinarily successful bond-trading firm of Long-Term Capital Management. Roger Lowenstein's When Genius Failed is the gripping story of the Fed's unprecedented move, the incredible heights reached by LTCM, and the firm's eventual dramatic demise.

Lowenstein, a financial journalist and author of Buffett: The Making of an American Capitalist, examines the personalities, academic experts, and professional relationships at LTCM and uncovers the layers of numbers behind its roller-coaster ride with the precision of a skilled surgeon. The fund's enigmatic founder, John Meriwether, spent almost 20 years at Salomon Brothers, where he formed its renowned Arbitrage Group by hiring academia's top financial economists. Though Meriwether left Salomon under a cloud of the SEC's wrath, he leapt into his next venture with ease and enticed most of his former Salomon hires--and eventually even David Mullins, the former vice chairman of the U.S. Federal Reserve--to join him in starting a hedge fund that would beat all hedge funds.

LTCM began trading in 1994, after completing a road show that, despite the Ph.D.-touting partners' lack of social skills and their disdainful condescension of potential investors who couldn't rise to their intellectual level, netted a whopping $1.25 billion. The fund would seek to earn a tiny spread on thousands of trades, "as if it were vacuuming nickels that others couldn't see," in the words of one of its Nobel laureate partners, Myron Scholes. And nickels it found. In its first two years, LTCM earned $1.6 billion, profits that exceeded 40 percent even after the partners' hefty cuts. By the spring of 1996, it was holding $140 billion in assets. But the end was soon in sight, and Lowenstein's detailed account of each successively worse month of 1998, culminating in a disastrous August and the partners' subsequent panicked moves, is riveting.

The arbitrageur's world is a complicated one, and it might have served Lowenstein well to slow down and explain in greater detail the complex terms of the more exotic species of investment flora that cram the book's pages. However, much of the intrigue of the Long-Term story lies in its dizzying pace (not to mention the dizzying amounts of money won and lost in the fund's short lifespan). Lowenstein's smooth, conversational but equally urgent tone carries it along well. The book is a compelling read for those who've always wondered what lay behind the Fed's controversial involvement with the LTCM hedge-fund debacle. --S. Ketchum

John Meriwether, a famously successful Wall Street trader, spent the 1980s as a partner at Salomon Brothers, establishing the best--and the brainiest--bond arbitrage group in the world. A mysterious and shy midwesterner, he knitted together a group of Ph.D.-certified arbitrageurs who rewarded him with filial devotion and fabulous profits. Then, in 1991, in the wake of a scandal involving one of his traders, Meriwether abruptly resigned. For two years, his fiercely loyal team--convinced that the chief had been unfairly victimized--plotted their boss's return. Then, in 1993, Meriwether made a historic offer. He gathered together his former disciples and a handful of supereconomists from academia and proposed that they become partners in a new hedge fund different from any Wall Street had ever seen. And so Long-Term Capital Management was born.
        In a decade that had seen the longest and most rewarding bull market in history, hedge funds were the ne plus ultra of investments: discreet, private clubs limited to those rich enough to pony up millions. They promised that the investors' money would be placed in a variety of trades simultaneously--a "hedging" strategy designed to minimize the possibility of loss. At Long-Term, Meriwether & Co. truly believed that their finely tuned computer models had tamed the genie of risk, and would allow them to bet on the future with near mathematical certainty. And thanks to their cast--which included a pair of future Nobel Prize winners--investors believed them.
        From the moment Long-Term opened their offices in posh Greenwich, Connecticut, miles from the pandemonium of Wall Street, it was clear that this would be a hedge fund apart from all others. Though they viewed the big Wall Street investment banks with disdain, so great was Long-Term's aura that these very banks lined up to provide the firm with financing, and on the very sweetest of terms. So self-certain were Long-Term's traders that they borrowed with little concern about the leverage. At first, Long-Term's models stayed on script, and this new gold standard in hedge funds boasted such incredible returns that private investors and even central banks clamored to invest more money. It seemed the geniuses in Greenwich couldn't lose.
        Four years later, when a default in Russia set off a global storm that Long-Term's models hadn't anticipated, its supposedly safe portfolios imploded. In five weeks, the professors went from mega-rich geniuses to discredited failures. With the firm about to go under, its staggering $100 billion balance sheet threatened to drag down markets around the world. At the eleventh hour, fearing that the financial system of the world was in peril, the Federal Reserve Bank hastily summoned Wall Street's leading banks to underwrite a bailout.
        Roger Lowenstein, the bestselling author of Buffett, captures Long-Term's roller-coaster ride in gripping detail. Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein crafts a story that reads like a first-rate thriller from beginning to end. He explains not just how the fund made and lost its money, but what it was about the personalities of Long-Term's partners, the arrogance of their mathematical certainties, and the late-nineties culture of Wall Street that made it all possible.
        When Genius Failed is the cautionary financial tale of our time, the gripping saga of what happened when an elite group of investors believed they could actually deconstruct risk and use virtually limitless leverage to create limitless wealth. In Roger Lowenstein's hands, it is a brilliant tale peppered with fast money, vivid characters, and high drama.

John Meriwether, a famously successful Wall Street trader, spent the 1980s as a partner at Salomon Brothers, establishing the best--and the brainiest--bond arbitrage group in the world. A mysterious and shy midwesterner, he knitted together a group of Ph.D.-certified arbitrageurs who rewarded him with filial devotion and fabulous profits. Then, in 1991, in the wake of a scandal involving one of his traders, Meriwether abruptly resigned. For two years, his fiercely loyal team--convinced that the chief had been unfairly victimized--plotted their boss's return. Then, in 1993, Meriwether made a historic offer. He gathered together his former disciples and a handful of supereconomists from academia and proposed that they become partners in a new hedge fund different from any Wall Street had ever seen. And so Long-Term Capital Management was born.

The Age of Turbulence: Adventures in a New World

In the immediate aftermath of September 11, 2001, in his fourteenth year as Chairman of the Federal Reserve Board, Alan Greenspan took part in a very quiet collective effort to ensure that America didn't experience an economic meltdown, taking the rest of the world with it. There was good reason to fear the worst: the stock market crash of October 1987, his first major crisis as Federal Reserve Chairman, coming just weeks after he assumed control, had come much closer than is even today generally known to freezing the financial system and triggering a genuine financial panic. But the most remarkable thing that happened to the economy after 9/11 was...nothing. What in an earlier day would have meant a crippling shock to the system was absorbed astonishingly quickly.

After 9/11 Alan Greenspan knew, if he needed any further reinforcement, that we're living in a new world - the world of a global capitalist economy that is vastly more flexible, resilient, open, self-directing, and fast-changing than it was even 20 years ago. It's a world that presents us with enormous new possibilities but also enormous new challenges. The Age of Turbulence is Alan Greenspan's incomparable reckoning with the nature of this new world - how we got here, what we're living through, and what lies over the horizon, for good and for ill-channeled through his own experiences working in the command room of the global economy for longer and with greater effect than any other single living figure. He begins his account on that September 11th morning, but then leaps back to his childhood, and follows the arc of his remarkable life's journey through to his more than 18-year tenure as Chairman of the Federal Reserve Board, from 1987 to 2006, during a time of transforming change.

Alan Greenspan shares the story of his life first simply with an eye toward doing justice to the extraordinary amount of history he has experienced and shaped. But his other goal is to draw readers along the same learning curve he followed, so they accrue a grasp of his own understanding of the underlying dynamics that drive world events. In the second half of the book, having brought us to the present and armed us with the conceptual tools to follow him forward, Dr. Greenspan embarks on a magnificent tour de horizon of the global economy. He reveals the universals of economic growth, delves into the specific facts on the ground in each of the major countries and regions of the world, and explains what the trend-lines of globalization are from here. The distillation of a life's worth of wisdom and insight into an elegant expression of a coherent worldview, The Age of Turbulence will stand as Alan Greenspan's personal and intellectual legacy.

A Timeline of a Remarkable Career Mar. 6, 1926 Born in New York City 1936 At 10 sees Roosevelt campaigning; becomes expert on the 1936 Yankees 1938 Takes up clarinet at 12 1943-44 Studies clarinet at Julliard Mid 1944 Joins Henry Jerome Band 1948 Graduates (summa cum laude) from New York University. (He later earns a master's in 1950 and a Ph.D. in 1977, also from NYU.) Hired as economic analyst at the Conference Board. 1954-74 Co-founds Townsend-Greenspan & Co. Inc., an economic consulting firm in New York City. (He returns in 1977.) 1974 Nominated by President Ford as chairman of the President's Council of Economic Advisors. 1983 Chair of bipartisan National Commission on Social Security Reform. June 1, 1987 Nominated by President Reagan for Fed Chair. Confirmed by Senate August 3. Oct. 19, 1987 Only 69 days into Greenspan's term, the Dow drops 508 points and 22%. July 10, 1991 Nominated by President George H.W. Bush to a second term as Fed Chairman. Later nominated to a third (February 22, 1996) and fourth term (January 4, 2000) by President Clinton. Apr. 6, 1997 Marries Andrea Mitchell May 18, 2004 Nominated by President George W. Bush for a fifth term as Fed chairman Jan. 31, 2006 Completes 18 ½ years at the Fed Feb. 1, 2006 Forms Greenspan Associates LLC, an economic consulting firm

Alan Greenspan's Top 10 Classical and Jazz Favorites Before Alan Greenspan embarked on his legendary financial career, he studied the clarinet at Julliard and played as a professional jazz musician (while doing tax returns for his bandmates). He chose 10 favorites for us from a lifetime of listening, including: Mozart, Piano Concerto No. 23 Vivaldi, Complete Cello Concertos Coleman Hawkins, "Body and Soul"

The Wealth of Nations (Bantam Classics)

The Wealth of Nations
by Adam Smith

It is symbolic that Adam Smith’s masterpiece of economic analysis, The Wealth of Nations, was first published in 1776, the same year as the Declaration of Independence.

In his book, Smith fervently extolled the simple yet enlightened notion that individuals are fully capable of setting and regulating prices for their own goods and services. He argued passionately in favor of free trade, yet stood up for the little guy. The Wealth of Nations provided the first--and still the most eloquent--integrated description of the workings of a market economy.

The result of Smith’s efforts is a witty, highly readable work of genius filled with prescient theories that form the basis of a thriving capitalist system. This unabridged edition offers the modern reader a fresh look at a timeless and seminal work that revolutionized the way governments and individuals view the creation and dispersion of wealth--and that continues to influence our economy right up to the present day.

Capitalism and Freedom: Fortieth Anniversary Edition

The Worldly Philosophers: The Lives, Times And Ideas Of The Great Economic Thinkers [7th Edition]

The Worldly Philosophers is a bestselling classic that not only enables us to see more deeply into our history but helps us better understand our own times. In this seventh edition, Robert L. Heilbroner provides a new theme that connects thinkers as diverse as Adam Smith and Karl Marx. The theme is the common focus of their highly varied ideas -- namely, the search to understand how a capitalist society works. It is a focus never more needed than in this age of confusing economic headlines.

In a bold new concluding chapter entitled "The End of the Worldly Philosophy?" Heilbroner reminds us that the word "end" refers to both the purpose and limits of economics. This chapter conveys a concern that today's increasingly "scientific" economics may overlook fundamental social and political issues that are central to economics. Thus, unlike its predecessors, this new edition provides not just an indispensable illumination of our past but a call to action for our future.

Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics

A simple, straightforward analysis of economic fallacies that are so prevalent they have almost become a new orthodoxy.

Competitive Strategy: Techniques for Analyzing Industries and Competitors

Now nearing its 60th printing in English and translated into nineteen languages, Michael E. Porter's Competitive Strategy has transformed the theory, practice, and teaching of business strategy throughout the world. Electrifying in its simplicity -- like all great breakthroughs -- Porter's analysis of industries captures the complexity of industry competition in five underlying forces. Porter introduces one of the most powerful competitive tools yet developed: his three generic strategies -- lowest cost, differentiation, and focus -- which bring structure to the task of strategic positioning. He shows how competitive advantage can be defined in terms of relative cost and relative prices, thus linking it directly to profitability, and presents a whole new perspective on how profit is created and divided. In the almost two decades since publication, Porter's framework for predicting competitor behavior has transformed the way in which companies look at their rivals and has given rise to the new discipline of competitor assessment.

More than a million managers in both large and small companies, investment analysts, consultants, students, and scholars throughout the world have internalized Porter's ideas and applied them to assess industries, understand competitors,, and choose competitive positions. The ideas in the book address the underlying fundamentals of competition in a way that is independent of the specifics of the ways companies go about competing.

Competitive Strategy has filled a void in management thinking. It provides an enduring foundation and grounding point on which all subsequent work can be built. By bringing a disciplined structure to the question of how firms achieve superior profitability, Porter's rich frameworks and deep insights comprise a sophisticated view of competition unsurpassed in the last quarter-century.

The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials)

What do the Honda Supercub, Intel's 8088 processor, and hydraulic excavators have in common? They are all examples of disruptive technologies that helped to redefine the competitive landscape of their respective markets. These products did not come about as the result of successful companies carrying out sound business practices in established markets. In The Innovator's Dilemma, author Clayton M. Christensen shows how these and other products cut into the low end of the marketplace and eventually evolved to displace high-end competitors and their reigning technologies.

At the heart of The Innovator's Dilemma is how a successful company with established products keeps from being pushed aside by newer, cheaper products that will, over time, get better and become a serious threat. Christensen writes that even the best-managed companies, in spite of their attention to customers and continual investment in new technology, are susceptible to failure no matter what the industry, be it hard drives or consumer retailing. Succinct and clearly written, The Innovator's Dilemma is an important book that belongs on every manager's bookshelf. Highly recommended. --Harry C. Edwards

In this revolutionary bestseller, Harvard professor Clayton M. Christensen says outstanding companies can do everything right and still lose their market leadership -- or worse, disappear completely. And he not only proves what he says, he tells others how to avoid a similar fate.

Focusing on "disruptive technology" -- the Honda Super Cub, Intel's 8088 processor, or the hydraulic excavator, for example -- Christensen shows why most companies miss "the next great wave." Whether in electronics or retailing, a successful company with established products will get pushed aside unless managers know when to abandon traditional business practices. Using the lessons of successes and failures from leading companies, The Innovator's Dilemma presents a set of rules for capitalizing on the phenomenon of disruptive innovation.

Find out:

• When it is right not to listen to customers.
• When to invest in developing lower-performance products that promise lower margins.
• When to pursue small markets at the expense of seemingly
• larger and more lucrative ones.

Sharp, cogent, and provocative, The Innovator's Dilemma is one of the most talked-about books of our time -- and one no savvy manager or entrepreneur should be without.

Revised, updated, and with a new chapter, this book continues to take the radical position that great companies can fail precisely because they do everything right. It demonstrates why outstanding companies lose their market leadership when confronted with disruptive technology--and it explains how to avoid a similar fate. Drawing on insights from a number of industries--such as the computer and disk drive industries, discount retailing, minimills, pharmaceuticals, and the automobile industry--Christensen shows why good management often turns out to be all wrong--and what to do about it.

The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek)