The Innovator's Dilemma: A Classic Crossover Business Book

My second-choice book for the book fair was a book called The Innovator's Dilemma by Clayton M. Christensen, a Harvard business School Professor.  It is a timely and academically rigorous book about "disruptive technology".  According to Christensen, disruptive technologies are the reason that even very well-managed companies can fail unexpectedly.    


We have talked a lot in class about how managers can reframe business problems to find novel and effective solutions to workplace problems.  By bringing a whole new perspective to a problem, amazing new possibilities can emerge.  Christensen suggests that the reframing isn't only a positive tool for managers, it is also a persistent threat that can destroy companies.


A disruptive innovation represents this threatening aspect of reframing.  Disruptive innovations can reframe an entire business landscape in ways that even great managers can miss.  They do so because they "offer a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream."  In other words, they are bad or niche ideas that, over time, unexpectedly reframe an entire market landscape and destroy steady companies.  For example:


--Online Mp3 Distribution:  Free illegal Mp3s on Napster made no money and often came with viruses, but they eventually undermined CD sales.  Soon music-industry newbies Amazon and iTunes took advantage of this new disruptive technology and overtook giants of the industry as music distributors.  
--LEDs:  LEDs were created to be indicator lights (a low battery light on a phone, for example) - they were weak and expensive for anything else.  However, the technology improved and became useful for TVs and computer monitors, taking over traditional CRT monitor technology and bringing entirely new players to those markets.      

This graph terrifies big business people.  The "sustaining innovations" line looks like great managed growth, but the low-end, niche "disruptive innovation" line blows it out of the water. 

How can managers keep pace with disruptive technologies?  By being leaders!  In particular, managers need to be aware of even the fringe elements of their market landscape.  They may seem entirely irrelevant, but they have the potential to reframe their competitive landscape.  As Christensen writes, these disputions are exactly what fuel the evolution of business. This is a smart and engaging book that will convince you once and for all that good managing is not enough for business success. 

Sean