 When it comes to developing a revolutionary product, or responding to one developed by a competitor, why do so many established companies fail? Innovation thought-leader Clayton Christensen shares his research and guidance in The Innovator’s Dilemma. There are “two principles of good management” commonly taught in business higher education: 1) always listen to and respond to the needs of your best customers, and 2) focus investments on those innovations that promise the highest returns. In practice, however, these principles are often the root causes for a company’s demise. The central idea is that companies become successful by developing their organizational capabilities to do the work needed to sell, produce and deliver products or services to their target market. However, when a related disruptive technology or opportunity emerges, the customer market is somewhat different, at least initially. And the organizational capabilities needed to be successful also differ. Established companies often try to respond to, or develop, a disruptive technology from within their company, using their legacy organizational capabilities. This tends to fail. Alternatively, they change their existing capabilities to support success with the new technology, which usually erodes their core business. The solution, for truly revolutionary technologies, is to spin out a separate team that can develop the new organizational capabilities. Internal teams, by contrast, work best for evolutionary technologies. Note that Clayton Christensen’s research, outlined in this book, aligns well with the findings of Chris Zook summarized in Profit from the Core (which we’ve introduced previously). In that book, Zook outlines how companies are most successful when they innovate with extensions of their existing products and services, extensions that leverage their existing capabilities, rather than entirely new offerings that require different capabilities. The added nugget in Christensen’s research is that entirely revolutionary offerings CAN be successful, but not WITHIN the company. A separate organization, with unique capabilities, needs to be created to focus on that disruptive opportunity. Book: 288 pages. Book summary on Soundview: 8 pages, 18 minutes audio. How can you improve your innovativeness? To find out how to improve your innovativeness [link directly to checklist] to grow more easily, quickly and profitability, AND enjoy the ride, try our complimentary Agile Growth Checklist [link directly to checklist]. This self-service questionnaire takes 5 to 10 minutes to complete. You'll receive the checklist with your responses immediately. Within 24 hours, you'll receive a compiled report highlighting areas to improve. Find out how your company is doing in each of the 7 areas needed to produce more rapid, profitable and sustainable growth. This report is complementary and involves no obligation. If you are a prairie CEO who wants to grow a thriving company more quickly, more easily and with less stress and headache, please contact me here.
Want to listen to the tip? Use the play button below. Click here for our 15-page simplified list of the specific products subject to Canada’s March 4 and 13 counter-tariffs. For other ways to navigate the trade war with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company more quickly, more easily and with less stress and headache, please contact me here. For more detailed legal explanations of the US tariffs and Canada’s response, see this JDSupra article by Toronto law firm Stikeman Elliott LLP.
https://www.jdsupra.com/legalnews/back-and-forth-levies-in-the-north-4837119/ 1. As of June 3, it is now clear that US tariffs on steel and aluminum products are all encompassing applying also to CUSMA-compliant products. The Stikeman Elliott LLP article indicates the U.S. government’s June 3 proclamation made clear CUSMA-compliant steel and aluminum products are no longer exempt from the 50% tariffs. 2. This article by the law firm Blakes speaks to the specifics of the U.S. tariffs on copper products, the elimination of the U.S. de minimis treatment for low-value shipments, and the introduction of the 40% tariff on non-CUSMA-compliant products that are transshipped via another country. https://www.blakes.com/insights/us-canada-tariffs-timeline-of-key-dates-and-documents/ 3. The Canadian Federation of Independent Business appears to confirm the 25% tariffs on the non-US content in Canadian CUSMA-compliant automobiles will continue. https://www.cfib-fcei.ca/en/site/us-tariffs 4. The Bank of Canada’s July 30 Monetary Policy Report includes estimates of the percentage of Canadian products overall, and energy exports, that are CUSMA-compliant. https://www.bankofcanada.ca/wp-content/uploads/2025/07/mpr-2025-07-30.pdf 5. There is no mention in the U.S. president’s executive order whether the 35% tariff on non-CUSMA compliant products will apply to automobiles. https://www.whitehouse.gov/presidential-actions/2025/07/amendment-to-duties-to-address-the-flow-of-illicit-drugs-across-our-northern-border-9350/ However, we’ve had an AI check all websites for more information, and those websites referenced currently assume Canadian non-CUSMA-compliant automobiles and automobile parts will also be subject to the 35% tariff and make no mention of a different rate. For example, the Canadian Federation of Independent Business website makes this assumption: https://www.cfib-fcei.ca/en/site/us-tariffs 6. An April 25, 2025 RBC article estimates the bulk of Canadian potash exports to the U.S. are CUSMA-compliant. https://www.rbc.com/en/thought-leadership/economics/featured-insights/cusma-compliance-rush-will-it-shield-canada-from-u-s-tariffs/ 7. The full CUSMA agreement can be found here: https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between It includes a Rules of Origin document, which can be found here: https://ustr.gov/sites/default/files/files/agreements/FTA/CUSMA/Text/04%20Rules%20of%20Origin.pdf 8. The government of Canada’s announcement about the 6-month relief from Canadian counter-tariffs for certain sections and the remissions available for auto, steel and aluminum companies can be found here: https://www.canada.ca/en/department-finance/news/2025/04/canada-announces-new-support-for-canadian-businesses-affected-by-us-tariffs.html  With the August 1 U.S. tariff deadline behind us, what are all the tariffs affecting Canadian businesses now? With the long list of US tariffs, exemptions, delays and increases announced since January, and the counter-tariffs and exemptions announced by Canada, it’s easy to be confused about what Canadian and US products are actually subject to tariffs, and at what rates. Let’s start with the US tariffs on Canadian products, including the effect of CUSMA (the Canada-United States-Mexico Agreement), the free trade agreement negotiated during Donald Trump’s first term as President. US tariffs on Canadian CUSMA-compliant and non-CUSMA-compliant products:
US tariffs on Canadian CUSMA-compliant products:
US tariffs on Canadian non-CUSMA-compliant products:
Now, what Canadian products are non-CUSMA-compliant, and therefore subject to the U.S.’s tariffs on non-CUSMA compliant products? It’s difficult, if not impossible, to come up with a definitive list. An internet search or AI query will come up dry. Whether a specific product is CUSMA-compliant depends on whether it meets the CUSMA Rules of Origin.(7) As such, the same type of product made by different manufacturers may each have different CUSMA-compliant statuses depending on where they source their parts and materials. Therefore, we were not able to find a “list of non-CUSMA compliant” products, or conversely a list of CUSMA-compliant products. However, recall that the Bank of Canada estimates 95% of Canadian products are CUSMA-compliant. How about Canadian counter-tariffs on US products? What specific US products are subject to these tariffs? Canada’s counter-tariffs have, so far, not changed since March, other than being delayed for some sectors starting in April. Canada imposed three sets of counter-tariffs:
In terms of specific US products targeted by the March 4 and 13 tariffs, the government of Canada website has a webpage listing each set of products. However, these two webpages are hundreds of pages long and include painstakingly detailed definitions and descriptions of all the different variations of each product. So we’ve summarized them here for easy reference. The following categories of US products are subject to Canada’s 25% counter-tariffs imposed on March 4:
The following categories of US products are subject to Canada’s 25% counter-tariffs imposed on March 13:
As we can see, Canada’s counter-tariffs on US products are broad. As such, many companies who resell products from the US will see their costs increase, as long as these Canadian counter-tariffs are in place, and unless they find substitutes in Canada or elsewhere at similar prices. Companies who buy parts or materials from the US to manufacture or process their products, or package food or beverages, will see their costs increase as of October 15. For other ways to navigate the trade war with confidence, get the free complete Trade-War Success Guide for Small to Mid-Size Companies below. If you are a prairie CEO who wants to grow a thriving company more quickly, more easily and with less stress and headache, please contact me here. For more detailed legal explanations of the US tariffs and Canada’s response, see this JDSupra article by Toronto law firm Stikeman Elliott LLP.
https://www.jdsupra.com/legalnews/back-and-forth-levies-in-the-north-4837119/ 1. As of June 3, it is now clear that US tariffs on steel and aluminum products are all encompassing applying also to CUSMA-compliant products. The Stikeman Elliott LLP article indicates the U.S. government’s June 3 proclamation made clear CUSMA-compliant steel and aluminum products are no longer exempt from the 50% tariffs. 2. This article by the law firm Blakes speaks to the specifics of the U.S. tariffs on copper products, the elimination of the U.S. de minimis treatment for low-value shipments, and the introduction of the 40% tariff on non-CUSMA-compliant products that are transshipped via another country. https://www.blakes.com/insights/us-canada-tariffs-timeline-of-key-dates-and-documents/ 3. The Canadian Federation of Independent Business appears to confirm the 25% tariffs on the non-US content in Canadian CUSMA-compliant automobiles will continue. https://www.cfib-fcei.ca/en/site/us-tariffs 4. The Bank of Canada’s July 30 Monetary Policy Report includes estimates of the percentage of Canadian products overall, and energy exports, that are CUSMA-compliant. https://www.bankofcanada.ca/wp-content/uploads/2025/07/mpr-2025-07-30.pdf 5. There is no mention in the U.S. president’s executive order whether the 35% tariff on non-CUSMA compliant products will apply to automobiles. https://www.whitehouse.gov/presidential-actions/2025/07/amendment-to-duties-to-address-the-flow-of-illicit-drugs-across-our-northern-border-9350/ However, we’ve had an AI check all websites for more information, and those websites referenced currently assume Canadian non-CUSMA-compliant automobiles and automobile parts will also be subject to the 35% tariff and make no mention of a different rate. For example, the Canadian Federation of Independent Business website makes this assumption: https://www.cfib-fcei.ca/en/site/us-tariffs 6. An April 25, 2025 RBC article estimates the bulk of Canadian potash exports to the U.S. are CUSMA-compliant. https://www.rbc.com/en/thought-leadership/economics/featured-insights/cusma-compliance-rush-will-it-shield-canada-from-u-s-tariffs/ 7. The full CUSMA agreement can be found here: https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/agreement-between It includes a Rules of Origin document, which can be found here: https://ustr.gov/sites/default/files/files/agreements/FTA/CUSMA/Text/04%20Rules%20of%20Origin.pdf 8. The government of Canada’s announcement about the 6 month relief from Canadian counter-tariffs for certain sections and the remissions available for auto, steel and aluminum companies can be found here: https://www.canada.ca/en/department-finance/news/2025/04/canada-announces-new-support-for-canadian-businesses-affected-by-us-tariffs.html |
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