The Innovator's Dilemma Book Summary

Book Summary

15 min

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Brief Summary

Larger firms have a hard time bringing new technology to the market for a number of reasons. Not only does it take longer to get ideas through an organization, but it can be hard to determine what is sustainable technology and what is disruptive technology.

Market research will never work with new technology, as customers cannot judge a product that does not yet exist. And it can take a long time for new technology to be accepted by customers, as they may not even know that they want or need this new innovation.

When employees defect from larger, well-established firms, they can end up challenging their previous company for a place in the market, leading to a loss of customers for the large firms.

About the Author

Clayton M. Christensen is an American academic, business consultant, and religious teacher who currently serves as the Kim B. Clark, Professor of Business Administration at The Harvard Business School. His known for his theory of “disruptive innovation” introduced in his book The Innovator’s Dilemma, one of the most influential business ideas of the early 21st century. He is the co-founder of Rose Park Advisors, a venture capital firm, and Insight, a management consulting and investment firm focused on innovation.

He graduated from Brighman Young University. There he took two years leave of absence to work as a missionary for the LDS Church. He won a Rhodes Scholarship and spent two years studying applied econometrics at the University of Oxford. He graduated Oxford with an MPhil. He pursued an M.B.A at Harvard University, which he earned with high distinction.

He Is the best selling author of ten books. In 2011 and 2013, he was named the world’s most influential business thinker by Thinkers50.

Topics

Entrepreneurship Management & Leadership

The Innovator's Dilemma Book Summary Preview

When faced with new and innovative technology, some firms are unable to maintain their position within their industry.

In The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Clayton Christensen explains the reason why some of the most successful firms lost their position in the market once new challengers stepped up to the plate.

When it comes to innovation, there are some companies that are unable to confront the challenges placed before them in an effective manner. In order for managers to handle competitive innovations, they need more than just suggestions for what to do, they must have an actual framework to manage any impact these new innovations will have on their company.

Typically there are two types of innovations a company must contend with. One is a helpful innovation that helps a business succeed and move forward. The second is a disruptive innovation that can end up transforming an entire industry.

Usually, disruptive innovation is something that initially seems to appeal to only a small audience. However, over time, these innovations gain the audience of the market by offering an alternative that is easier or cheaper (and sometimes both) than the original product it is in competition with.

The Innovator’s Dilemma is a chance to look at the different innovations that can have an impact on a business and how to handle these innovations as they change the way business is done

It is important to be able to recognize a helpful innovation over one that would be considered a disruptive innovation. When dealing with new innovations, a company must look beyond suggestions to a plan of action to actually deal with the impact that these innovations can have on the business.

Even with the importance of market research being well-established, it is nearly impossible to get what you need when it comes to new technology.

New technology is easy to improve at first but gets harder over time

As new technology is created, new improvements and ideas seem to come easy. However, over time, it can be hard to keep improving technology, even with further research.

It is all about that initial breakthrough, which actually leads to the viability of that product on the market. Once a product hits the market, customer feedback can help to make improvements and small tweaks that make the new technology better.

These small changes usually come at a small cost to the company. In some cases, these small changes can lead to continued improvements that give consumers new versions of the technology on a regular schedule.

However, at some point, technology will hit a plateau. At this plateau, it can cost more to make changes that are effective and worthwhile. Plus, it can also be harder to find things to change to improve this technology.

In some cases, once a company gets to a point where it is no longer viable to keep tweaking their technology, it can open a space for a rival company to step in and offer their own product as a competitor.