The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail by Harvard Business School Press
My rating: 5 of 5 stars
This is deservedly a classic work in the business and technology area because it highlights an interesting problem: When disruptive innovation occurs, the best management practices are likely to cause your company to fail. Christensen uses several industries, such as hard disk drive manufacturing and excavation equipment to make his point.
He first distinguishes between two types of innovation, sustaining and disruptive. In short, sustaining innovation is making incremental improvements in the existing technology, such as adding more capacity to existing disk drives. And in those cases firms can do well using standard management practices, by evaluating the cost of innovation versus the return on the investment, and choosing any innovation where the metrics are favorable.
In contrast, a disruptive innovation frequently looks like a development no one needs, and possibly even a step backwards. But it can lay the groundwork for overturning the established dominant firms and remaking the industry. And the dilemma is that in the vast majority of cases, the existing dominant companies will be incapable of even following, let alone leading, in the new technology.
One reason I was eager to read this book is the Eric S. Raymond has been making the argument that Apple is vulnerable to disruption from below in the mobile market, and that interests me. I don’t know that I am entirely ready to buy Eric’s argument yet, though I will note that his forecasts have so far been pretty accurate.
One last note: I read this on my phone using the Kindle app. I do not recommend this to anyone else. The book uses a number of graphs and charts that are rendered unreadable on a small screen. I suspect this sort of thing will get better, but for now I would get the paper book or use a larger screen
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