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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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Summary: Value Network Tool for forward thinking Market Leaders
Review: The Innovator's Dilemma is one book in a series of many which needs to be taken in its intentional perspective to present one aspect of a delicate balancing act to effectively utilize resources and achieve a "reasonable" consistency between change and tradition. I SEE THIS BOOK AS ONE APPROACH OF SEVERAL TO COMPETITIVE STRATEGIES FOR MARKET OWNERSHIP. The Innovator's Dilemma is founded on the premise that a Market Leader has developed preferred/reliable technology for a predefined market place, has taken a "customer-first" attitude, is using and implementing good, or better, management practices, and has a plan to facilitate growth of resources, technology and processes. The competitive nature of most leaders is to disrupt the control of complacent elements to improve their own position. When the Market Leader narrowly focuses financial return to microscopic time windows the value of investing in disruptive technologies is lost, and market dominance begins to deteriorate. Typical corporate managers want to move up not down, and in the market cycle this leaves a vacuum for disruptive technologies. However, leaders are in many places, and it is all about balancing resource with opprtunity. The problem occurs when Market Leaders misread the size of the opportunity and fail to adjust the necessary resources. Christensen has a wonderful way of presenting a "survival" package; but, real leaders do not seem to perceive disruptive technologies as survival. They see them as what they are, rare moments of great opportunity to gain advantages to obtain control from those who failed to calculate the true size of the opportunity. Like looking for a lost treasure, the arrival of a true leader on the scene of opportunity spells disaster for complacency and tradition. The HUNGRY are looking for the fat man's lunch. As I understand the elements presented in this book, I can see clearly several disruptive technologies: e-business disrupting the distribution channel of goods and services; wireless communications disrupting the market of electronic packaging (I.e., backplanes, hardwired networks, fiber optics, etc.); network independent protocols (I.e, IEEE 1451) disrupting automation and communication network-based markets; build-to-order integrated enterprise systems disrupting mass produced, full valued generic products; and more. Missing from this book, in my opinion, was a discussion on high volume niche markets to materialize competitive technologies that can be expanded by sustainable technologies into the general market place and displace the Market Leader. .
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Summary: Compelling
Review: The author certainly creates a compelling reason to establish an autonomous team in every corporation to research, develop, market products derived from disruptive technologies. What most impressed me was the author's argument that the better the firm the more likely they would fall victim to this problem. So, the bottom line is that companies can chose to ignore the author's conclusion, but even the best won't avoid the perils to the long-term potentials. And your competition, existing today or not, are waiting for your decision!
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Summary: Readable, compelling, good examples and recommendations
Review: There are plenty of other reviews here that hit the mark. What I can add to what's been said so far is this: the product lifecycle of the disk drive industry as well as the attrition rate of high tech companies is so fast, that Christensen has excellent data to formulate and defend his position. He also takes the brave step of venturing into the social science aspect of managing innovation in a high tech environment - that is, he addresses the hurdles faced by innovators when they lock horns with their managers. This is a fast read. You will not waste your time on it. Many articles in Fortune Magazine now reference Christensen's work when they cover bricks-and-mortar going to e-commerce. You can easily skip the technology details and the product timeline charts and still fully understand Christensen's argument. And even if you hate it or disagree, you have not spent that much time or money on it.
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Summary: Brilliant and very innovative
Review: This book ranks at the top of my list along with the Wheelwright and Clark books on product development. Clayton is a brilliant man and very innovative in his analysis resulting in one of the best management books of the decade. If you are managing innovation, you need to read this book.
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Summary: Clear and powerful
Review: Along with Crossing the Chasm, this book will be a classic on managing innovation. Crossing the Chasm looks at innovation from the perspective of the upstart. The Innovator's Dilemma looks at it from the current market leader. If these two books don't get your entrepreneurial juices flowing, do something else.
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Summary: Recommended to those who want to survive in today's markets.
Review: The increasingly shorter life time of technologies make this excellent book a 'must read' for all those who try to steer their companies in todays troubled waters of innovation. The book shows how 'good managers' can follow their customers' needs and still fail. This is an invaluable book for those who try to succeed in today's ever changing market. The author analyzes past cases and recommends solutions to the problem of disruptive innovations. Great book!
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Summary: Good book....little dry
Review: Interesting premise. I liked the theory presented and learned much from the book. I think it got a little too hung up on the disk industry and lost focus and my interest.
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