Rating: 
Summary: Good analysis of technology vs. management
Review: Original thinking that helps us understand some of the dynamics of technological progress and explains why the Davids continue to beat the Goliaths. A must for the paranoid (like Andy Grove) who want to survive. The book shows again that traditional best practices in management are good at managing incremental product improvement, but have enormous difficulty in dealing with truly unusual developments. The disruptive technologies are not the Nobel Prize-winning inventions but initially inferior technologies that are easy to overlook.
Rating: 
Summary: OK - so prove your point
Review: Starts by turning the idea of "good management" completely on its head. OK - if you can prove it. I'm not sure yet that Christensen has proven his points; I've only read the book twice. But he makes sense. Alot of the roadblocks I've encountered personally in bring innovative practices or technologies into organizations start to make sense in light of Christensen's analysis. Read this book!
Rating:
Summary: Best business book I've ever read. Period.
Review: In Jan/Feb '95, the author, Clayton Christensen coauthored a seminal paper in the Harvard Business Review called "Disruptive Technologies...". For 3 years now I, my coworkers, and my managers have passed that paper around and watched organizations succeed and fail following EXACTLY the strategies described in that '95 paper. Imagine my delight that Christensen has now published (and expanded) his ideas in a book. The book contains incredibly thorough research, is very well written, and is applicable to a wide range of businesses. Make sure you read the whole book - there are gems scattered from cover to cover. Pay particular attention to the concept he calls 'value networks' - and how difficult it is for an organization to change these.
Rating:
Summary: An excellent explanation of a recurrent strategic problem
Review: The Innovator's Dilemma offers a compelling explanation forwhy large and well-respected firms lose their dominant positionswithin a market, following what Christensen styles as 'disruptive innovation'. Innovation takes two forms: sustaining and disruptive. Competition in oligopolistic markets is manifest in continuous product improvement, or sustaining innovation. This contrasts with a disruptive innovation, which fundamentally changes a product's nature, offering new functionality, although often at the expense of performance. Typically, when disruptive innovation occurs, incumbents will reject the new technology; where markets do exist for such innovative products, they tend to be small and offer slim margins. Despite this, the book cites evidence of upstart firms with a low cost configuration and lower profit expectations, which have successfully exploited these marginal opportunities. Refinement of the innovative product to a standard acceptable to traditional customers coupled with additional functionality enables the niche player to compete head on with established firms. They do so by pricing aggressively. Market incumbents typically respond by quickly incorporating the innovative technology into their products, only to find that they are able to make little impact in the developing new market (weak brand name) and cannibalise their existing customer base at lower margins. A new technology standard has been set. The few firms that have survived a disruptive innovation have embraced the new technology early and recognised the need for a different approach to operation within the market. This demands a different corporate mentality and ultimately, organisational design, which is only possible by establishing a virtually autonomous and sometimes geographically separate subsidiary. Eventually, this may reverse acquire the parent. The Innovator's Dilemma provides an interesting perspective on a seemingly recurrent problem. It does so in a fashion that is both insightful and easy to read. The main themes in the book are qualified with numerous examples and some rudimentary analysis, whilst avoiding being unduly repetitive.
Rating:
Summary: Give you the real solution to utilize disruptive technology
Review: If you only read one chapter, just read the last chapter on the case of electrical car. Then you can handle the main idea of the book immediately.
Rating:
Summary: An excellent contribution to thought on innovation strategy
Review: I loved this book because it challenges conventional management cliches about "customer focus". Christensen clearly outlines how customer focus becomes a trap when a firm is faced with a "disruptive technology". The book offers both theory and practical advice and does both well; a rare feat. I found this book directly relevant to my own organization's innovation strategy. A superb piece of work.
Rating:
Summary: Excellent analysis of growing industries and opportunities
Review: This book provides an insightful analysis of growth opportunities provided by technological breakthroughs. It allows the reader to understand how the capacities that led firms to success may also lead to eventual failure. In addition, it explains why firms often fail to pursue new technologies that do not serve their immediate customer base and how that inaction may result in their demise. The book is lucidly written and provides ample examples to support the hypothesis. It is one of the few business books today that provides new insight into exploiting technological innovation.
Rating:
Summary: Good introduction to a nice Theory
Review: Not quite as easy to read as I would have liked. Christensen describes some very interesting & plausible theories, but is somewhat confined into employing the computer disk industry as the rapidly changing example which both demonstrates & proves his theories, and its not necessarily the most exciting case material. Other products only get a minor look-in. What I did like is how he covers the footnotes at the end of each Chapter - so if they don't interest you, you can skip over them, but if they do interest you, then you don't have to struggle to the back of the book. I wish more authors & publishers would use that technique. One quibble - given his Economics background - of course there are plenty of graphs, and 99% of them are straight lines - there are no time dependent variances in his world. Read this before you read the Innovators Solution.
Rating:
Summary: Only the Paranoid Survive
Review: In a landmark study, the author argues that the basis of competition among businesses undergoes a paradigm shift everytime a disruptive technology is born. So what is a disruptive technology? Remember what Walmart did to Sears? Of course you do, because disruptive technologies are usually products or services that are faster, cheaper, smaller, and more convinient. Ultimately, good companies must refrain from doing what got them to the top in the first place--listening to their customers and believing everything comes down to superior technology--in order to successfully compete with the onslaught of start-ups redefining both the buying hierarchies and value networks in which they are implicated.
This is without a doubt one of the best business books I have ever read.
Rating:
Summary: Blend decision analysis with decision technology
Review: The Innovator's Dilemma explores how the creation of new technologies can cause companies to lose market share or their markets entirely, even companies that do everything right such as listening to their customers, watching the marketplace, and investing in research and development. The author argues that, while existing thriving companies can be successful with sustaining technologies, these same companies often falter with the advent of disruptive technologies. They either often do not want to put their resources into developing the new technology, because their existing customer do not want it or they attempt to fit the new technology into the existing market instead of looking to create new markets for the new product which generally doesn't work. Both of these decisions cause the company to lag in the development of the disruptive technology and eventually wither away to the competition of smaller companies that focused on developing the eruptive technology.
The dilemma examined is, while it is important for companies to give their customers what they want to be successful in the present, they need to know when to begin to move their resources into technologies or services t hat represent the moneymakers and markets of tomorrow. Though concentrating mainly on the disk drive industry, the author also looks at the retailing industry, pharmaceutical industry, and automobile industry including the development of the electric car, among others. Examples of disruptive technologies include the evolution of disk drives from 14 inch to 8 inch to 5.25 inch to 3.5 inch to 1.8 inch, the introduction of off-road motorcycles to North America. The replacement of transistors by vacuum tubes, and the creation of discount retailers such as K-Mart. Sustaining technologies are those that improve upon existing products or technologies 'along the dimensions of performance that mainstream customers in major markets have historically valued'. Most advances in technology have been sustaining in nature, which may very well be one reason why, when faced with a disruptive technology, ordinarily successful companies fail with regards to those disruptive technologies. Another reason for successful firms failing to capitalize on disruptive technologies, this goes against what is normally considered 'rational financial decision-making'.
Generally, disruptive technologies have low profit margins, are geared to 'emerging or insignificant markets', and a company's best customers usually do not want, need, or cannot use the disruptive technology. The author outlines four basic principles to successfully deal with disruptive innovations which he likened to man first learning how to fly. In the introduction, he wrote that when man first learned to fly, he ignored the basic principle of physics. Once the basics principles of physics were recognized and put to use, man was able to fly. Similarly, he argues that once managers recognize and utilize the principles of disruptive innovation, they will be able to successfully deal with such innovations. These principles are: Companies Depend on Customers and Investors for Resources. Small Markets Don't Solve the Growth Needs of Large Companies. Markets That Don't Exist Can't Be Analyzed. Technology Supply May Not Equal Market Demand. These four principles are discussed in the firs half of the book. The author argues that if managers can understand and use these four principles when faced with disruptive technologies, they then can and will be able to effectively navigate through those unknown waters. One of the reasons put forth for repeated failures is that the then-successful companies focused solely on providing what their customers wanted and neglected to look to or invest in nascent technologies. Their total customer focus caused them to lose sight of new and potentially lucrative markets and products. Also put forth as a reason for these failures is the companies' fears of cannibalization; that us is, the companies feared that the new disruptive technology would be purchase at the expense of their more successful products. However, as he points out, disruptive technology never initially replaces and existing technology, and , as such , the short term fear of cannibalization of existing high profit products is unfounded. When and established company waits to introduce a disruptive technology until the market for that product is already established, then the fear of cannibalization is much more real.
The author looks also to value networks to determine whether or not a company will be successful with regards to disruptive technologies. A value network is essentially the framework that a company uses to solve problems, deal with its customers, and generally do its business. It is from within this network that marketing decisions and 'perceptions of the economic value of a new technology' are formulated. As can be deduced, a large, established firm will have different marketing plans and value perceptions of a new product for a small or unknown market than would startup or smaller company. Often times it is through this value network that the decisions to pas on a new technology are made. Shadow prices are discussed in relation to how different value networks view the varying characteristics of the product. The author outlines six steps in the evolution of a disruptive technology: Disruptive technologies were first developed within established firms. Established firms may have chosen not to market the technology, but they knew how to develop it. Marketing personnel then sought reactions from their lead customers. The most important customers have no use at the moment for the new technology and, therefore, show little interest in it. Established firms step up the pace of sustaining technological development. They do this in order to keep up with the needs of their current customers and thereby 'win the competitive wars against other established firms which were making similar improvements'. By taking this tack, established firms neglect possible competition from entrant companies with disruptive technologies. New companies were formed, and markets for the disruptive technologies were found by trial and error.
Often the people who developed the disruptive technologies at the established firms would leave and form their own companies to market their innovations. In the process, they would develop and new market. The entrants moved up-market. Once these new companies developed their own markets, they were able to make some changes to their products and begin to move in on the established firms. Established firms belatedly jumped on the bandwagon to defend their customer base. By this point, it is generally too late for the established firms. Those that succeed in getting the new technology to market generally don't get any significant market share. They basically just hang on. The author examined companies such as Apple, Hewlett-Packard, Kresge, Woolworth's, and Honda. He concluded that the successful managers took the following steps when faced with disruptive technologies. They embedded projects to develop and commercialize disruptive technologies within an organization whose customers needed them. When managers aligned a disruptive innovation with the 'right' customers, customer demand increased the provability that the innovation would get the resources it needed. They placed projects to develop disruptive technologies in organizations small enough to get excited about small opportunities and small wins. They planned to fail early and inexpensively in the search for the market for a disruptive technology. They found that their markets generally coalesced through an iterative process of trial, learning and trial again. When commercializing disruptive technologies, they found or developed new markets that valued the attributes of the disruptive products, rather than search for a technological breakthrough so that the disruptive product could compete as a sustaining technology in mainstream markets. The decision making process that the MBA students learn at Business Schools, including decisions under risk, the minimization of regret, etc., would be among the proper and useful methods to use when making decisions regarding sustaining innovations according to the book. However, it seems that the author is arguing that it is these exact decision analyses that often cause firms to fail when faced with disruptive technologies.
Disruptive technologies have to be analyzed using different decision models and that is what The Innovator's Dilemma sets out to demonstrate. The Innovator's Dilemma shows that, if addressed properly, disruptive technologies can prove highly successful and profitable. If addressed using the common decision-making approach best geared for everyday issues and sustaining technological improvements. Then disruptive technologies could prove to be a disaster for the existing staid corporation
|
