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Summary: True also for success of existing technologies
Review: I concur with the large majority of reviewers that this is an exceptional book that reveals and explains clearly some of tthe amjor factors forcing technological evolution.The author clearly points out that a primary factor for technological replacement is a mismatch between what a technology can deliver and what service values customers are willing to pay for. He demonstrates with case studies that technological capability evolution usually outpaces the increase in customer needs. This will usually result in a occurance where teh customer does not need and is unwilling to pay for a technology and so will replace by what was seen previously as an inferior choice. Technological replacement is the scenario presented by the author. However there is another alternative which he did not describe. Chrostensen sees technological replacement as a change to a different network of values that means a change to a different technology. However the case of the competition between Ethernet and ATM (asynchronous transfer mode)for primacy in the local area network environment shows that is not teh only case. Ethernet was the existing technology and was based primarily on low cost. Much technological invenstment was made to reduce the costs of Ethernet interfaces until tehy became cheap enough to be ubiquitous. Its value as a low cost solution was challenged by ATM which was able to be competitive with Ethernet in price due to semiconductor advances and promised much more in the way of quality of service for new applications such as multimedia and voice processing. ATM was the disruptive technology but it did not replace Ethernet. However its value network did dramatically alter the value network that Ethernet provided. Ethernet providers did not retreat into niche high performance markets as Christenesen illustrates that suppiers of other technologies did. Instead they adopted the value network of ATM and added it to their own. They also challenged ATM in its own value network by creating new values such as speed and ease of set up which directly challenged the fundamental ATM technology. As Christensen pointed out, a change to a value metwork brings about technological change. However in this case there was no technological replacement. The existing technology faced the challenge to its value network by coopting that of the disruptive technology and adding new values of its own. It was the disruptive technology of ATM which fled to niche high performance markets.
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Summary: One of the better technology business books
Review: I have read a number of technology oriented business books, and this one is perhaps the best. It applies well thought through analysis to non-obvious theories and comes out with valuable insight. It is well written and easy to follow. I also find that is comes up often in dicussions.
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Summary: Both in Business and in Personal Finance
Review: This book is a very powerful framework, by which you can undesrtand how emerging new business opportunities compete with you current product lines and not to kill them before they become profitable. There are many common flaws, like treating a new opportunity with the same focus, team and knowledge as your previous successes. It helps you understand how profit will be emerging in the new products and how the current starts will be surely killed if you don't do anything about it in time and to acknowledge a high risk situation. Have you ever wonder why big companies don't react in time against the smaller competetiors or why personally you discard new opportunites because you don't have a clear decision criteria, and see how the returns will come about? This book can help you
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Summary: A Major Achievement
Review: This is an extraordinary and important book that helps explain and put into perspective many of the changes our economy is going through. It outlines clearly why successful firms find it easy to develop "sustaining" technologies and why they find it so extraordinarily difficult to develop the "disruptive" technologies that our economy and country need to continue moving forward and being successful. The lessons Christensen develops apply to government as well as business and help explain why government-run systems in the areas of health, defense and education have lagged so far behind the private sector in developing breakthrough technologies. The heart of Christensen's message is that "sustaining technologies" - improving upon something that you are already doing - are normally developed by firms that are already successful because they fit the existing markets' definition of value. Thus an IBM, Intel, or U.S. Steel will naturally develop better ways of delivering the product they are already focused on. However the successful companies will almost never develop a "disruptive" technology - a radically new way of doing things, or a way of doing new things - precisely because they focus on their customers, and those customers almost never value a disruptive technology in its initial stages. By definition, if your customers are structured to buy your product, they are not going to be immediately open to changing their structure to buy a new product. They are going to be institutionally inclined to stay with their current structure and therefore your current product. Thus a standard business plan would insist that the return on investment from a disruptive technology does not justify the time and effort necessary to make is successful. In short, it is not technological conservatism or bad management that inhibits the adoption of disruptive technologies by the dominant companies; it is precisely their intense and successful focus on their customers that leads them to rationally reject the future. Christensen develops case after case in which we can see examples in history where the disruptive technology is developed by a new firm that actually has to go out and develop new markets for the product. Thus the large, successful steam shovel manufacturers were rationally not interested in a new innovation, hydraulic backhoes, because at their inception the backhoes could not do the mammoth jobs steam shovel customers needed (i.e. strip mining). So the backhoe manufacturers, smaller start-up style companies, created their own market when they found that backhoes were invaluable if you had been digging ditches by hand for water pipes. Over time the disruptive technologies are developed and become competitors to the lower end of the existing systems - smaller steam shovels that do smaller jobs could be taken out by a backhoe. Over more time the new technologies can displace the older ones. Christensen develops a model for thinking about new technologies and for setting up small operations to develop them within a rational framework, while allowing the rest of the firm to focus on existing technologies. In health, defense, education, and general government administration there are enormous gains to be made by studying Christensen's work and using his model. For those who find the book useful, Christensen is putting his system on the Internet and has a consulting firm to help companies work on disruptive technologies. This is a major work for anyone interested in how technologies emerge and how to develop them more rapidly and more profitably.
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Summary: Presents convention-defying rules on disruptive innovation
Review: This book takes the radical position that great companies can fail precisely because they do everything right. It gives examples of outstanding companies that have lost their market leadership when confronted with disruptive changes in technology and market structure. Drawing on patterns of innovation in a variety of industries, including computers, retailing, pharmaceuticals, automobiles and steel, the author shows how breakthrough innovations are initially rejected by mainstream customers because they cannot currently use them. This rejection can lead firms with strong customer focus to allow strategically important innovations to languish. An excessive customer focus prevents firms from creating new markets and finding new customers for the products of the future. As they unwittingly bypass opportunities, such firms can clear the way for more nimble, entrepreneurial companies to catch the next great wave of industry growth. Using the lessons of successes and failures of leading companies, The Innovator's Dilemma presents a set of convention-defying rules on the phenomenon of disruptive innovation. This, then, is the innovator's dilemma: when to apply the rules of disruptive innovation that goes so much head-to-head against the conventional wisdom. Clayton M. Christensen is an associate professor of business administration at the Harvard Business School. His research and writing focus on the management of technological innovation, the problems of finding new markets for new technologies, and the identification and development of organisational capabilities. Reviewed by Azlan Adnan. Formerly Business Development Manager with KPMG, Azlan is currently Managing Partner of Azlan & Koh Knowledge and Professional Management, an education and management consulting practice based in Kota Kinabalu, Malaysian Borneo. He holds a Master's degree in International Business and Management from the Westminster Business School in London. He may be contacted at Tel: +6088-383 526 E-mail: azlan@azlan.org
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Summary: A must read for today's business environment
Review: Professor Christensen has managed to write, not only a book with all the timely footnoted research in the subject of sustaining versus disruptive technologies, but most certainly one of the most interesting and fast read business book that I have ever lay eyes on. The book managed to keep my griping attention throughout with insightful historical notes on different industries, supporting his research. It does not matter if you are in high-tech, a new economy dot com or in any other business or industry you will find shrewd analogies, data, and prose that will keep you up turning pages.
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Summary: Rise and Fall of Well-managed Enterprises
Review: Clayton M. Christensen thoroughly and systematically analyzes the impact of both disruptive and sustaining technologies on well-managed enterprises. The author shows us how these enterprises belonging to very different industries fail precisely because they do all the right things in developing and bringing sustaining technologies to the market, i.e. 1. Listen to their customers carefully; 2. Invest enough money in developing new technologies that meet or exceed customer expectations; 3. Research market trends thoroughly; 4. Excel in allocating resources systematically to innovations that optimize returns. Christensen clearly explains to us why and how enterprises that are paragon of the above-mentioned approach to the market can lose their balance while dealing with the emergence of disruptive technologies. Well-managed enterprises ultimately fail because they ignore or fight the five laws of disruptive technologies that Christensen has identified for us, i.e. 1. Tackle the disruptive technology appropriately, usually by setting up an autonomous entity free of the influence of mainstream customers; 2. Penetrate small markets through the use of an appropriate vehicle such as an autonomous entity, even if those markets don't allow well-managed enterprises to reach their targeted growth rates quickly; 3. Practice what Christensen calls "agnostic marketing", i.e. gaining first experience in using a disruptive technology, often made possible by watching how real people use it rather by listening to their wishes before making plans for implementation; 4. Pay due consideration to internal processes and values that make well-managed enterprises strong in one context and weak in another one; 5. Realize that mainstream customers are not necessarily able or willing to absorb any performance improvement that investing in sustaining technologies makes possible. To summarize, The Innovator's Dilemma brings a fresh perspective to an intricate issue that well-managed enterprises need to address sooner or later in their life.
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Summary: You'll keep on talking and thinking about it
Review: After reading -or listening to- the book you will be able to understand why companies win or lose with new technologies. People will think you understand how to handle with new technology. Based on what I have learned in the book I will most certainly make better decisions regarding to new technologies. In fact, it already helped me out in solving business issues several times. The first part of the book is a little dull to read, but keep on reading! After finishing you will keep on talking and thinking about it for a while!
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Summary: Could it be "The Structure of Technological Innovations"?
Review: Let's admit it, most of the books crowding business sections of large bookstores are nearly trash. If they serve any purpose at all, it is mainly to supply upper- and middle management with a lexicon of faddish buzzwords for reports, presentations and conference calls; in a few years nobody will remember most of these buzzwords and bullet points. "The Innovator's Dilemma" is a rare exception. It does present a new paradigm of how technological innovations actually develop and win over the previous technologies. Many reviewers pointed out key organizational aspects of the "Innovator's Dilemma" - "how great companies fail by doing everything right". I will not repeat them. Instead I will concentrate on the important and overlooked technical side of the issue. One of the key concepts in the studies of the technological progress that emerged over the last decades is the so-called S-curves. They are usually depicted as a cascade of similar shaped curves, ascending in upper-right directions in a system of coordinates describing the performance of each new technology vs. time. According to this concept, as a new technology emerges, its performance is at first much below than the established one. As it develops, its improvement ran for a while roughly in parallel to the established technology and below it. Then, as the older technology matures, its performance improvement becomes slower and saturated (the upper end of the S-curve), and eventually is overcome by the new technology. Then the cycle repeats itself with yet another disruption. "The Innovator's Dilemma" in fact proposes a radical revision of this concept. New technology usually wins not because the old one exhausts its potential, but because continued improvement in the performance of old technology becomes progressively less important and valuable, what the author calls "technology oversupply". Instead of the S-curves Clayton Cristensen presents what I'd call a "#-pattern", although he doesn't use this term. The #-pattern consists of two pairs of parallel lines, both inclined in the upper-right direction, but at different angles. The steeper pair of lines represents the "technology trajectory", of which the upper line stands for the established technology, and the lower line - the new, disruptive one. They run roughly in parallel, so that at all times the performance of the established technology is superior to the new one. The reason why the new technology triumphs nevertheless can be understood from the second - less steep - pair of lines which represents the market demand at the lower and upper ends. Initially the trajectory of the disruptive technology establishes a beachhead by meeting low-end market demands (intersecting the lower of the near-horizontal lines of the #-pattern). Then, while both established and disruptive technologies improve faster than the market demand, the disruptive one is capable of satisfying all segments of the market. At the same time at is typically much better by other criteria - e.g. cheaper, smaller, more reliable than the old one. Eventually the old technology is driven out completely. The problem for the established technology arises not because the a disruptive technology quickly overcomes it in terms of the existing metrics, but the metrics itself changes. For example, 8-inch disk drives could still pack far more megabytes than 5-inch drives in the early 80's. But the new emerging products - PCs - could not yet absorb all the megabytes allowed by the 8-inch drives. The size and the price was more important for them - that is why the 5-inch drives won. The fact that the established technology continues to hold an edge vs. the disruptive one helps explain why it is so difficult for dominant companies to perform a successful transition, even as they are often first to discover new technology. They see that their current products are far from exhausting their potential for improvement, and their customers continue to demand them. They often happy to relinguish the unappealing lower end of the market to the struggling upstarts, which seem a very long way from being credible challengers. And eventually they lose. I think that this is a very important thesis, and it is consistently presented and well-explained throughout the book. I was dissapointed to see most of the book reviewers either overlooking it or completely misunderstanding this crucial point. Kudos to C. Christensen for putting forward an original, innovative and convincing concept.
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Summary: Very good book with a few flaws
Review: In my opinion this book is a must read for senior managers, esp. in large organizations, experiencing the growing pains of becoming too big. It illustrates its underlying theory by mainly using the disk drive industry as an example but the learnings can easily be replicated to all kind of companies including FMCGs. The theory, proof and remedy suggesting that great companies fail because they are doing the right thing (!) is intriguing and makes sense after reading the entire book. For novice professionals and students this book might not be the best introudction to management or the subject. Granted, Christensen does repeat himself a little too much, sometimes gets too detailed about the disk drive industry and some of his charts are a pain, but in summary this is a stand-out book. Don't give copies to your co-workers but instead your boss since, as the book illustrates, the innovator's dilemna can only be overcome from the top. Shame that not more very senior managers seem to have read it.
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