Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group.

The transformation at the corporate level was achieved by selling off business units in old markets and by creating new business units to pursue the new opportunities. But the individual business units themselves within those transformed corporations were almost inert to change.

In the first stage of insight-building, all that researchers can do is observe phenomena. Second, they classify the phenomena in a way that helps them simplify the apparent complexities of the world so they can ignore the meaningless differences and draw connections between the things that really seem to matter. Third, based on the classification system, they propose a theory. The theory is a statement of what causes what and why, and under what circumstances.

One quarter of Medicare beneficiaries have five or more chronic conditions, sees an average of 13 physicians each year, and fills 50 prescriptions per year.

Quite often startups were first out of the gate with a sustaining technology. But somehow the leaders got the technology and stayed atop their industries. Sometimes they acquired the startup; sometimes they just developed the technology as a follower and used their muscle and mass to win. But they always won.

This is one of the innovator’s dilemmas: Blindly following the maxim that good managers should keep close to their customers can sometimes be a fatal mistake.

The outsourcing gurus have been driving the theory, and they are saying everybody ought always to do this. But it is really contingent on where you are on the spectrum from "not good enough" to "more than good enough," relative to each tier of the market.