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Summary: Read it... or die
Review: If you've managed to develop something you wanna market but your actual customers won't accept it because they don't need it, please don't throw it away! This book will tell you what to do with it before a new competitor (a start-up company maybe?) grabs it and markets it succesfully to an emerging-not-discovered-yet base of customers. Do you understand now what's the innovator's dilemma?
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Summary: Absolutely a MUST READ, no delimmas!
Review: This book is a MUST READ. Unlike many business books in which ideas come out of thin air, this one is grounded in rock solid research. If you get this book, make sure you also read the author's article in the March 2000 Harvard Business Review. Key Lesson of this book: The most unexpected sources of trouble a perfect customer centric company are precisely those customer-centric mentalities. Every page of this book is worth the twenty something dollars. If you miss reading this one, you are missing out on some of the fundamental ideas that will shape the new economy. Beg, borrow (from your library), or steal...but do read this one! The last few pages are however filled with numerous statistics that do not necessarily fit in a more practioner oriented book like this.
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Summary: Entertaining little tale of a technology
Review: This is a fast, entertaining history of the development of computer disks. It does illustrate the dilemma stockholder-owned companies are in over new technologies, but it doesn't pretend to be a heavyweight treatise on economics, so I'm not quite sure why it produced such venom from some customer reviewers. Maybe you have to know (care?) about magnetic disks to enjoy and understand the book. I can imagine it might perplex, or even bore, anyone else.
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Summary: Typical dressed-up academic rehash
Review: Does no-one read anymore? Despite all the assembled love notes to Clayton Christen here, it would seem not. Because this book is a typical re-hash of old ideas in dressed-up tech-friendly clothing.F'rinstance, the idea that prior market leaders are often swept away in new waves of market innovations is as old as Schumpeter. Christensen adds some nice historical frisson to the story -- good for trotting out at Friday beer bashes and impressing management -- but nothing more. It has been documented before (and more entertainingly) in books about NeXT, Digital, Apple, IBM, and others. Even Computer Wars, Morris and Ferguson's more recent vintage book hits the same notes -- and you'd don't have to go back more than a decade to find that one. Anyway, nice stories, but this is the kind of opportunistic and wildly over-applicable theorizing that gives rise to too many conferences. Whoops, too late.
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Summary: A Frightening Book for Anyone in a Hi-Tech Industry
Review: This is a fascinating and frightening book for anyone who works in an industry where a product can become obsolete quickly. Christensen uses computer disk drives to tell his story, but the principle is basic. Public companies can't afford to abandon profitable old technologies for newer generation products, but will lose market share later if they don't. Christensen provides all the graphs and tables you could want to make his point.
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Summary: Identifying the horns of the dilemma.
Review: Prior to reading this book, I chalked up the misfortunes of the well run companies of our time to the vagaries of the market place and put them in the same shoulder shrugging category of "bad things happen to good people." But now I have a new way of looking at success and failure due to disruptive technology. I better understand my own frustrations of trying to do new things in a large corporation given the further insight from Christensen that assets are really managed by customers, not our own managers. That is what makes this book scary. There seems little hope of any large corporation staying on top of disruptive technology unless they follow the prescription of segregating those innovations from the usual corporate overhead structure. That means spinning off groups, taking equity positions in start-up firms, and/or completely funding start-ups to grow the new markets. The writing is clear, the data gathered is thorough and fully documented with ample notes, the logic is concise, and the conclusions are entirely logical. Christensen gives us formulas for success including agnostic marketing to help us recognize emerging markets. The case studies are at once interesting and compelling. This is a must read for managers in any industry. Dr. Andrew S. Grove, Chairman and CEO of Intel Corporation had this to say, "This book addresses a tough problem that most successful companies will face eventually. It's lucid, analytical-and scary."
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Summary: Superb capture of Change
Review: The author Christensen has done a splendid job showing us the elements of change and how they affect product launches, the cycles, and the very survivability of the organization. Numerous case examples add flavor to the book. I commend him for not ignoring the people aspects that lead into change. Bottom Line: highly recommend this book. Also suggest leadership books by Blanchard and "The Leader's Guide: 15 Essential Skills."
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Summary: Disruptive vs. Sustaining Technologies
Review: Christensen clearly presents the reality of how disruptive technologies affect organizations. He reviews the business perspectives of large firms vs. those of small firms, and their issues with disruptive and sustaining technologies, i.e., resources, profit margins, customers, etc. Christensen explains that what to us, from the point of 20/20 hindsight, may now seem like blatantly obvious organizational faux pas, at the time seemed like the correct path for the organization to follow. He also reviews companies that have been able to not only survive, but succeed with the emergence of disruptive technologies. Disruptive Technologies vs. Sustaining Technologies One of the main reasons why great firms fail is that they attempt to market and manage disruptive technologies utilizing the same methodologies that are found to be successful for the management and marketing of sustaining technologies. These firms are essentially held captive by their customers, since this methodology is based on pleasing the established customer base. Disruptive technologies often are intended for different customer bases that may not have yet been discovered. Due to this, disruptive technologies are often not seen as successful or profitable by large firms that need to keep large profit margins. They are instead seen as successful by smaller entrant organizations with smaller profit margins. "Resource Dependence - Customers effectively control the patterns of resource allocation in well-run companies" Management, especially middle management, is very aware of the customer base their company holds. Their customers are the ones who keep pouring money back into their organization through the purchase of products. These customers have set their expectation on the sustaining technology the organization currently offers, as it helps them run their business. They usually have little interest in a disruptive technology that more than likely will not currently meet their needs. This, in turn, causes any new projects involving disruptive technologies that are kept within the same organization and held to the same profit expectations, which initially they will no be able to meet, to not be held at the top of the organizational priority list. The disruptive technology will be "shelved" until it comes into the mainstream, and by that time it may be too late. "Small markets don't solve the growth needs of large companies" When a disruptive technology begins to make its presence known, the disruptive technology needs to be viewed with serious consideration. From this, proper planning for its many possibilities should take place. These plans need to remain flexible, and development of the disruptive technology should take place within a department, organization, or subsidiary that has little financial bearing on the company as a whole. This is the necessary environment for the successful development of a disruptive technology. The larger organization can not expect this disruptive technology to command the profit margins of the organization's sustaining technologies until it has discovered its customer base. "The ultimate uses or applications for disruptive technologies are unknowable in advance. Failure is an intrinsic step toward success." A great example from the book is the introduction of Honda motorcycles in the U.S. in 1959. Initially Honda wanted to conquer the American market with their 50cc Supercub bike, but their bikes weren't built for running at high speeds for extended periods like Harley-Davidson and BMW. Honda discovered, after failing to market the bikes as road bikes, from actually watching how people used the bikes, that their bikes were best suited for off road dirt biking, a sport that had not yet come to fruition. Harley-Davidson attempted to take part of the new market, but tried to do so by marketing this disruptive technology as a sustaining technology. Their plan failed to prove profitable. "Technology supply may not equal market demand. The attributes that make disruptive technologies unattractive in established markets often are the very ones that constitute their greatest value in emerging markets." Honda was able to do this by creating a new market segment, off road bikers! These same bikes were not attractive to those customers interested in long haul road bikes such as Harley-Davidson and BMW, but Honda's bikes now hold a majority of the market.
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Summary: Now What?
Review: In his Introduction, Clayton M. Christensen makes his objective crystal clear: "This book is about the failure of companies to stay atop their industries when they confront certain types of market and technological change....the good companies -- the kinds that many managers have admired for years and tried to emulate, the companies known for their abilities to innovate and execute....It is about well-managed companies that have their competitive antennae up, listen astutely to their customers....invest aggressively in new technologies, and yet they still lose market dominance." Why? For Christensen, the answer is revealed in what he calls "the innovator's dilemma": the logical, competent decisions of management which are critical to the success of their companies are also the reasons why they lose their positions of leadership. In the current and imminent global marketplace, paradox has become paradigm. Managers in every organization (regardless of size or nature) eventually must resolve "the innovator's dilemma." Christensen's book provides invaluable assistance to completing that immensely difficult process. It remains for each of his readers to answer questions such as these: Which customers do we want? (also, which customers do we NOT want?) Which technologies will help us to get and then keep them? For each technology, which strategies will be most effective to sustain it? Should we attack competitors with disruptive technology? How can we best defend ourselves against it? How should our resources be allocated? What about timing? Should we lead or follow? If we follow, should we prepare to lead later? Correct (ie appropriate) answers to questions such as these will help to clarify today's realities and to suggest strategies for an uncertain future. My own suspicion is that there will always be another dilemma to resolve. Christensen suggests a rigorous process by which to do so.
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Summary: Summary & Comments
Review: Companies face a tough decision between making their customers happy in the short-term and the long term. It is a trade off that often results in a company focusing on the short-term while a start-up competitor focuses on satisfying the customer in the long term. This is the Innovator's Dilemma. The on-going example offered by the book is that of the disk drive market. Historically customers have desired more storage capacity. Firms have sought to make "sustainable" advances in the amount of storage space of their hard drive products. Start-up firms have often introduced hard drives that were smaller, but had less storage space. At first the start-up cannot satisfy the customers that require high capacity, but over time introduce sustainable improvements in capacity that eventually satisfy the high-end market. In the meantime they dominate smaller markets that require smaller hard drives. At some point the high-end market has the option of using a big or a small hard drive, because both satisfy capacity requirements. They tend to pick small, because it also offers something else, reliability (a result of small size, apparently). A technological improvement is called "disruptive" if it provides inferior performance according to current "sustainable" criteria, but has other features of use to smaller markets. Disruptive technologies can be improved over time to eventually satisfy the demands of the high-end market. The author argues that even very successful companies fall victim the Innovator's Dilemma, because it is a natural law of business for them to satisfy customers. Disruptive technologies do not initially satisfy those customers, so successful companies don't invest in them. To bet on every disruptive technology draws resources away from sustaining current products, so companies tend not to do so. Also, disruptive technologies initially only have application in low-end markets. Since the low-end is not a big money maker for successful companies, they naturally work toward the other extreme, seeking to satisfy customers in higher and higher margin markets. Eventually the disruptive technology improves to the point that it offers equivalent functionality, but by that time the firm has too much inertia toward the high-end market, and can't switch to the disruptive technology. I found that the Innovator's Dilemma enhances the picture that Crossing the Chasm first illustrated. Crossing the Chasm is a recipe for the start-up that wants to topple giant competitors. The Innovator's Dilemma, on the other hand, shows how giant companies are toppled by start-ups. Both books are useful to all kinds of companies, because all companies face both situations. Start-ups need a strategy for going mainstream, and once there need a way to fight off new start-ups.
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