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Named one of 100 Leadership & Success Books to Read in a Lifetime by Amazon Editors
A Wall Street Journal and Businessweek bestseller. Named by Fast Company as one of the most influential leadership books in its Leadership Hall of Fame. An innovation classic. From Steve Jobs to Jeff Bezos, Clay Christensen’s work continues to underpin today’s most innovative leaders and organizations.
The bestselling classic on disruptive innovation, by renowned author Clayton M. Christensen.
His work is cited by the world’s best-known thought leaders, from Steve Jobs to Malcolm Gladwell. In this classic bestseller—one of the most influential business books of all time—innovation expert Clayton Christensen shows how even the most outstanding companies can do everything right—yet still lose market leadership.
Christensen explains why most companies miss out on new waves of innovation. No matter the industry, he says, a successful company with established products will get pushed aside unless managers know how and when to abandon traditional business practices.
Offering both successes and failures from leading companies as a guide, The Innovator’s Dilemma gives you a set of rules for capitalizing on the phenomenon of disruptive innovation.
Sharp, cogent, and provocative—and consistently noted as one of the most valuable business ideas of all time—The Innovator’s Dilemma is the book no manager, leader, or entrepreneur should be without.
- Sales Rank: #14736 in Books
- Published on: 2016-01-05
- Original language: English
- Number of items: 1
- Dimensions: 8.20" h x .90" w x 5.40" l, .65 pounds
- Binding: Paperback
- 288 pages
Amazon.com Review
What do the Honda Supercub, Intel's 8088 processor, and hydraulic excavators have in common? They are all examples of disruptive technologies that helped to redefine the competitive landscape of their respective markets. These products did not come about as the result of successful companies carrying out sound business practices in established markets. In The Innovator's Dilemma, author Clayton M. Christensen shows how these and other products cut into the low end of the marketplace and eventually evolved to displace high-end competitors and their reigning technologies.
At the heart of The Innovator's Dilemma is how a successful company with established products keeps from being pushed aside by newer, cheaper products that will, over time, get better and become a serious threat. Christensen writes that even the best-managed companies, in spite of their attention to customers and continual investment in new technology, are susceptible to failure no matter what the industry, be it hard drives or consumer retailing. Succinct and clearly written, The Innovator's Dilemma is an important book that belongs on every manager's bookshelf. Highly recommended. --Harry C. Edwards
From Booklist
The author, an associate professor at Harvard Business School, asks why some well-managed companies that stay on top of new technology and practice quality customer service can still falter. His own research brought a surprising answer to that question. Christensen suggests that by placing too great an emphasis on satisfying customers' current needs, companies fail to adapt or adopt new technology that will meet customers' unstated or future needs, and he argues that such companies will eventually fall behind. Christensen calls this phenomenon "disruptive technology" and demonstrates its effects in industries as diverse as the manufacture of hard-disk drives and mass retailing. He goes on to offer solutions by providing strategies for anticipating changes in markets. This book is another in the publisher's Management of Innovation and Change series. David Rouse
Review
“This is an important read, even if you’re at the very early stages of growing a startup.” — Drew Houston, CEO, Dropbox
Praise for The Innovator’s Dilemma and Clayton M. Christensen:
Forbes
“[Clayton Christensen is] one of the most influential business theorists of the last fifty years.”
The Financial Times
“The Innovator’s Dilemma achieves a rare feat: It is at once a satisfying intellectual solution to a long-standing business puzzle and a practical guide for executives and investors.”
Wired
“. . . Required reading in Silicon Valley, where it has been championed by the likes of Steve Jobs, George Gilder, and Andy Grove.”
The Huffington Post
“A seminal book.”
Bloomberg Businessweek
“A holy book for entrepreneurs in Silicon Valley . . .”
Fortune
“The notion of ‘disruptive technology’ is one of the timeliest ideas of the Internet age. Coined by Harvard Business School professor Clayton Christensen, it’s at the heart of his influential book The Innovator’s Dilemma.”
Most helpful customer reviews
356 of 371 people found the following review helpful.
Disruptive technologies create a threat to large companies
By Coert Visser
This is a book is about successful, well-led companies -often market leaders- that carefully pay attention to what customers need and that invest heavily in new technologies, but still loose their market leadership suddenly. This can happen when disruptive technologies enter the stage. Most technologies improve the performance of existing products in relation to the criteria which existing customers have always used. These technologies are called sustaining technologies. Disruptive technologies do something different. They create an entirely new value proposition. They improve the performance of the product in relation to new performance criteria. Products which are based on disruptive technologies are often smaller, cheaper, simpler, and easier to use. However, the moment they are introduced, they can not at once compete against the traditional products and so they cannot directly reach a big market. Christensen researched how disruptive technologies have developed in the computer disk industry, an extremely rapid evolving industry. He identified six steps in the emergence of disruptive technologies:
1. Disruptive technologies often are invented in traditional large companies. Example: at Seagate Technology, the biggest producer of 5,25 disks, engineers in 1985 designed the first 3,5 disk.
2. The marketing department examines first reactions from important customers to the new technology. Then they notice that existing customers are not very interested and they conclude that not a lot of money can be made with the new product. Example: this is what happened at Seagate. The 3,5 disk's were put upon the shelf.
3. The company keeps on investing in the traditional technology. Performance improvement of the traditional technology is highly appreciated by existing customers and a lot of money is being made. Example: Seagate invested in the 5,25 disk technology. This led to considerable improvement of the technology and to a considerable improvement of sales.
4. New companies are started up (by ex-employees of the traditional companies) and markets for the new technology emerge by trial and error. Example: ex-Seagate people started up Corner Peripherals. This company focused on the small emerging market for 3,5 inch disks. In the beginning this was only for the laptop market.
5. The new players move up in the market. The performance of the new technologies gets better after some time, enabling them to compete better and better with the traditional companies and products. Example: the performance of the 3,5 disks improved drastically. The 3,5 inch disk moved up in the market, to the personal computer market. Corner pushed Seagate out of the PC market for 3,5 inch disk drives.
6. Traditional companies try to defend their market position and to get along in the new market. Often they notice that they have fallen behind so far, that they cannot keep up. Example: Seagate did not succeed in capturing a significant part of the new market for 3,5 inch disk drives for PC's.
The events described above can be understood by the four principles of disruptive technologies which Christensen formulates:
1. In well-led companies it is customers, not managers, who actually determine resources allocation. This is a proposition of the resources dependence theory (Pfeffer & Salancik, 1978) which is supported strongly by the research of Christensen. In essence: middle managers will not tend to invest in technologies that are not directly appreciated by important (large) clients, because they will not be able to get quick financial gains by doing this.
2. Small markets can not fulfil the growth need of large companies. For several reasons, growth is important for companies. Unfortunately, the bigger the company, the harder it is to continue growth. A small company (40 million sales) with a growth target of 20%, must achieve 8 million extra sales. A large company (4 billion sales), has to achieve 800 million of extra sales! Emerging markets often simply are not large enough to fulfil such growth needs. They can, however, fulfil the growth needs of new small companies.
3. Markets that do not exist can not be analysed. The ultimate applications of disruptive technologies can not be foreseen on forehand. Failure is an intrinsic unavoidable step to success.
4. Technology supply does not always equal the market demand. The speed of technological progress is often bigger than the speed with which the customer demand develops. By improving the performance of the disruptive technologies (for instance the 3,5 inch disks, first only used in the laptop market), they became suitable for the larger PC-market.
These steps explain why traditional companies are often not capable of applying disruptive technologies. Christensen argues that you can not resist these four principles. What you can do however, is use them to your advantage. For instance: in a large company you can create an 'island' where the new technology is developed for the new market. Also it is possible get an ownership in emerging companies which develop the new technologies (several companies have done this successfully).
I think the innovator's Dilemma is an excellent book. The ideas are empirically foudend and together they form a coherent theoretical framework. The examples from the computer disk industry, the steel industry and others, are very well-documented and interesting. The book is logically structured and reads easily.
148 of 160 people found the following review helpful.
Identifying the horns of the dilemma.
By Dave Kinnear
Prior to reading this book, I chalked up the misfortunes of the well run companies of our time to the vagaries of the market place and put them in the same shoulder shrugging category of "bad things happen to good people." But now I have a new way of looking at success and failure due to disruptive technology. I better understand my own frustrations of trying to do new things in a large corporation given the further insight from Christensen that assets are really managed by customers, not our own managers. That is what makes this book scary. There seems little hope of any large corporation staying on top of disruptive technology unless they follow the prescription of segregating those innovations from the usual corporate overhead structure. That means spinning off groups, taking equity positions in start-up firms, and/or completely funding start-ups to grow the new markets. The writing is clear, the data gathered is thorough and fully documented with ample notes, the logic is concise, and the conclusions are entirely logical. Christensen gives us formulas for success including agnostic marketing to help us recognize emerging markets. The case studies are at once interesting and compelling. This is a must read for managers in any industry. Dr. Andrew S. Grove, Chairman and CEO of Intel Corporation had this to say, "This book addresses a tough problem that most successful companies will face eventually. It's lucid, analytical-and scary."
48 of 49 people found the following review helpful.
What is the Innovator's Dilemma?
By Amazon Customer
In The Innovator's dilemma, Clayton Christensen describes the dynamics by which some of the largest, most successful companies in America fail due to "good" management. In his analysis, firms that dedicate themselves to listening to and serving their customers the best, place themselves most at risk for future failures as they are overtaken by smaller upstart competitors with innovative technologies.
The Innovator's Dilemma makes a compelling argument based on the author's study of the computer disk drive industry. Disk drive manufacturing was chosen for its frequent turnover of technology and competitors in a relatively short timespan.
Cristensen places technological innovations in two categories: sustaining and disruptive. Sustaining innovations are those that help sustain an organization's existing customer base by improving the performance, capacity, reliability, or value of an existing product technology. Disruptive innovations produce products that are technologically inferior from the perspective of a firm's existing customer base. Disruptive products, however, may include improvements that, while unimportant to the existing market, hold potential for new and emerging markets. Christensen uses the example of the introduction of small 50cc Honda motorcycles in the late 1950's. From the perspective of the existing motorcycle market at the time, the Honda was inferior compared to larger, more powerful motorcycles such as Harley Davidson and BMW. Honda found a niche, however, as a dirt bike - an emerging market that had not been explored by other manufacturers but was ideally suited for a small, inexpensive motorcycle.
Once a market is established for a disruptive technology, it can then evolve into the mainstream and become technologically improved to the point of competing with and eventually overtaking existing mainstream technologies. In the case of Honda, once a market was established, small motorcycles were technologically improved to the point of appealing to a mass market rather than just dirt bike enthusiasts.
Organizations overlook disruptive technologies for a variety of reasons. Often, larger organizations listen to their existing customers and what is important to them, overlooking small, emerging markets. The innovator's dilemma is that at the time disruptive technologies are introduced, mainstream companies are often wildly successful marketing their sustaining technology to existing customers. Investing in disruptive technology necessitates a diversion of resources away from the organization's most profitable activities that its customers are asking for, toward an unproven technology with a small, uncertain market. Disruptive technologies are often not as cost effective to manufacture or sell when they are viewed from the perspective of existing markets. Small 3.5 inch disk drives, for example, initially cost more per megabyte of capacity compared to larger 5.25 inch drives while, and they had less overall capacity Although they were not attractive to desktop computer manufactures, they represented a cost effective solution to the needs of the emerging mobile computer market where size was more important than large capacity.
Citing examples from a number of industries, Christensen makes the point that traditional business planning works well for established markets and sustaining technologies. In the case of disruptive technologies, however, he argues that strategy should be based on discovery of new opportunities and that individuals working on the development and marketing of disruptive technologies should be organizationally separate.
Overall, the Innovator's Dilemma is a concise, well written book in which the author is able to effectively convey a technically complex study on a technically complex industry. Overall, the Innovator's Dilemma should be required reading for anyone in an business planning role.
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