The Innovator's Dilemma When New Technologies Cause Great Firms to Fail

This book made me realize why most business books these days are full of anecdotes. This is super insightful and short, but also dry and hard to get through. Glad I read it, but took several small sittings.

At this point, most people are aware of the concept popularized by Christensen of disruption from below - which made the book not all that mind blowing. Nevertheless, it was a good reminder of pitfalls companies of past did and how winners such as IBM and Seagate emerged. This was my second time reading, and the message is still very relevant.

** spoiler alert ** Book sounds more profound for decision managers at bigger companies and advise them how not to be wiped out from markets by disruptive innovation by small emerging markets and what's they should try and be open to ever incoming novelty to keep their business sustainable. Definitely interesting read if you want to be aware or setting up your r&d in mid size company and which steps you should take. >Disruptive technologies usually foster the development of new markets. Successful companies are reluctant to enter small markets and miss the moment to become prominent and influential >Initially, innovations were the target of small markets. But gradually, they developed and became competitors to the products of the main markets. >While leaders were great at analyzing their market, they forgot to consider the possibilities of others. Large companies are often afraid that new products will drop sales of existing ones. Therefore, these “big fish” wait for the latest technology to become commercially viable. >Newcomers, not industry leaders, often introduce disruptive, market-changing technologies. >In explaining the failure of industry leaders, there are usually two types of innovation. The first requires new technological capabilities, whereas the second needs existing ones. Therefore, large companies are better at improving what they are already doing, and newcomers are more successful at radically new products. >When companies decide how sustaining or disruptive innovation can benefit them, they create value networks. Within their framework, companies assess the economic attractiveness of new technology. Large companies tend to allocate resources towards sustaining technologies. It may explain the outstanding accomplishments of leaders at the mass markets and their modest results in innovation. >In the hard drive industry, young companies failed to become leaders; their development vector was fundamentally new, proving innovation cannot be introduced into established value networks and new ones should be created. >New companies are finding markets for disruptive technology and often employ engineers from large companies. For example, Conner Peripherals, a leading manufacturer of 3.5-inch drives, was founded by ex-employees of Seagate and Miniscribe, the largest manufacturers of 5.25-inch drives. >5. Newcomers become market leaders. 6. Large companies enter new markets, but it is too late. Control Data Corp., the leader in the 14-inch drive market, did not gain even 1% of the mini-computer market. >When innovation emerges, industry leaders usually do very well, so they don't take it seriously. >Therefore, in the resource allocation debate, “disruptive” projects tend to lose to sustaining and standard technologies. Sometimes it's for the best, but sometimes it costs companies their existence. >So why have many strong companies failed? The first reason, oddly enough, is good management. Companies try too hard to please customers and are afraid of taking risks. According to the theory of resource dependence, investors and consumers often limit the company's freedom of action. >Being the leader in disruptive technology is more profitable than being the first in supportive technology. >Think about resources, procedures, and values required for innovations and how they can become part of your business. Resources are people, equipment, technology, products, brands and information, relationships with suppliers, distributors, and consumers. Procedures mean workflow, and values ​​are the standards by which employees set their priorities. >Do not be afraid to make mistakes — they mean that you are developing. >As a manager, reserve the right to try and learn. Study consumers, markets, and technologies to better understand their characteristics and not get confused when innovation looms. Don't decide whether your company will be an innovator or a manufacturer of sustaining technologies; you should create different strategies for different products.

Absolutely incredible insight. This book was a big revelation for me.

A good book, but a bit disappointing because totally centred upon business managing. I would like to see the discussion occurring at a lower level, the creative moment, before management decisions. Leave here the five principles stated by Clayton in the book. I generally agree with all of them, being the fifth one the most subjective. "Principle #1: Companies Depend on Customers and Investors for Resources Principle #2: Small Markets Don’t Solve the Growth Needs of Large Companies Principle #3: Markets that Don’t Exist Can’t Be Analyzed Principle #4: An Organization’s Capabilities Define Its Disabilities Principle #5: Technology Supply May Not Equal Market Demand"

Author in detail describes the history of fails of big companies and wins of small disrupting companies, leading us through samples of disk drives, excavation machines and few other industries. I shows how unforeseen results could be predicted and they tries to predict he electric vehicles market. And by what we see now, fails completely. Still a very interesting read, but a bit of a slow one.

In the majority of the text, the author explains in great detail how the disk drive industry changed throughout the years. And though no one uses floppy disks anymore (except for the Save icon) it’s a great way to understand how being stuck in the now prevents you from becoming great in the future. To some, the research in The Innovator’s Dilemma might seem dated, but what professor Christensen was able to package in the book is more than just case studies of long-gone firms. He trains our minds to spot new opportunities and gives us a new perspective to have in mind for the future development of our business. If you have an existing business this book will help you understand what you’re doing wrong and show you how you can adjust your future strategy. If you’re still hesitant about starting something new because you think everything is already created, this book will surely motivate you. There are plenty of examples in the pages where start-ups were able to crush big corporations. My key takeaway from the book is the following: Watch carefully what customers do. Don’t listen to what they say. Customers don’t really know what they want. Read more: https://durmonski.com/book-summaries/...