The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail
Why this book?
In this book, Professor Clayton Christensen explores the puzzle of why seemingly well-run companies fail. He shares many examples of companies that are well-managed, listen to their customers, act on market trends, and invest in R&D – i.e. appear to do all the right things – and yet fail. The Innovator’s Dilemma lays out why established companies often fail at disruptive technologies and how to tackle the inherent challenges. Disruptive technologies are technologies that underperform existing products in mainstream markets and have features that a few fringe customers value. They are often ignored by well-run companies precisely because their customers don’t care for them. But these technologies can improve quite dramatically and catch these companies off guard.
The author backs his theory with several examples of technologies that meet his definition of disruptive technologies (digital photography, PCs, etc.). While other theorists have pushed back on Christensen’s theory in recent years, I still consider the book as a must-read for anyone trying to understand innovation strategy.