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The Innovator's Dilemma
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The Innovator's Dilemma (1997) (edit title/settings)

When New Technologies Cause Great Firms to Fail

by Clayton M. Christensen (Author) (edit contributors)

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Description edit see section history

In this revolutionary bestseller, Harvard professor Clayton M. Christensen says outstanding companies can do everything right and still lose their market leadership, or worse, disappear completely. And he not only proves what he says, he tells others how to avoid a similar fate. Focusing on... read more

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Quotes edit see section history

  • “Established firms step up the pace of sustaining technological development”
  • “New companies were formed, and markets for the disruptive technologies were found by trial and error”
  • “They planned to fail early and inexpensively in the search for the market for a disruptive technology”
  • “When commercializing disruptive technologies, they found or developed new markets that valued the attributes of the disruptive products, rather than search for a technological breakthrough so that the disruptive product could compete as a sustaining technology in mainstream markets”
  • “Disruptive Technologies are Typically Simpler, Cheaper, and More Reliable and Convenient than Established Technologies”
  • “Most executives would like to believe that they're in charge of their organizations, that they make the crucial decisions and that when they decide that something should be done everyone snaps to and executes.”
  • Popular Highlights from Kindle Customers
  • There are times at which it is right not to listen to customers, right to invest in developing lower-performance products that promise lower margins, and right to aggressively pursue small, rather than substantial, markets.
    Highlighted by 297 Kindle customers
  • Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheaper, simpler, smaller, and, frequently, more convenient to use.
    Highlighted by 262 Kindle customers
  • First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.
    Highlighted by 254 Kindle customers
  • It is in disruptive innovations, where we know least about the market, that there are such strong first-mover advantages. This is the innovator’s dilemma.
    Highlighted by 239 Kindle customers
  • By and large, a disruptive technology is initially embraced by the least profitable customers in a market. Hence, most companies with a practiced discipline of listening to their best customers and identifying new products that promise greater profitability and growth are rarely able to build a case for investing in disruptive technologies until it is too late.
    Highlighted by 218 Kindle customers
  • the only instances in which mainstream firms have successfully established a timely position in a disruptive technology were those in which the firms’ managers set up an autonomous organization charged with building a new and independent business around the disruptive technology.
    Highlighted by 203 Kindle customers
  • This is one of the innovator’s dilemmas: Blindly following the maxim that good managers should keep close to their customers can sometimes be a fatal mistake.
    Highlighted by 193 Kindle customers
  • When the performance of two or more competing products has improved beyond what the market demands, customers can no longer base their choice upon which is the higher performing product. The basis of product choice often evolves from functionality to reliability, then to convenience, and, ultimately, to price.
    Highlighted by 191 Kindle customers
  • in their efforts to provide better products than their competitors and earn higher prices and margins, suppliers often “overshoot” their market: They give customers more than they need or ultimately are willing to pay for.
    Highlighted by 190 Kindle customers
  • Creating an independent organization, with a cost structure honed to achieve profitability at the low margins characteristic of most disruptive technologies, is the only viable way for established firms to harness this principle.
    Highlighted by 185 Kindle customers
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Organizations edit see section history

  • Innosight: Clayton Christensen's strategy consulting firm, focusing on disruptive innovation.

First Sentence edit see section history

WHEN I BEGAN my search for an answer to the puzzle of why the best firms can fail, a friend offered some sage advice.

Table of Contents edit see section history

I. In Gratitude

II. Introduction

III. Part One: Why Great Companies Can Fail
1. How Can Great Firms Fail? Insights from the Hard Disk Drive Industry
2. Value Networks and the Impetus to Innovate
3. Disruptive Technological Change in the Mechanical Excavator Industry
4. What Goes Up, Can't Go Down

IV. Part Two: Managing Disruptive Technological Change
5. Give Responsibility for Disruptive Technologies to Organizations Whose Customers Need Them
6. Match the Size of the Organization to the Size of the Market
7. Discovering New and Emerging Markets
8. How to Appraise Your Organization's Capabilities and Disabilities
9. Performance Provided, Market Demand, and the Product Life Cycle
10. Managing Disruptive Technological Change: A Case Study
11. The Dilemmas of Innovation: A Summary

V. The Innovator's Dilemma Book Group Guide

VI. Index

VII. About the Author

Glossary edit see section history

  • Disruptive Innovation: A kind of innovation that improves a product or service in ways that the market does not expect, typically by lowering price or designing for a different set of consumers. Disruptive technologies are "innovations that result in worse product performance, at least in the near term." They are generally "cheaper, simpler, smaller, and, frequently, more convenient to use." Disruptive technologies occur less frequently, but when they do, they can cause the failure of highly successful companies who are only prepared for sustaining technologies.
  • Sustaining Innovation: A kind of innovation that does not have an effect on existing markets. Sustaining innovations may be either "discontinuous" ("transformational") or "continuous" ("evolutionary"). Sustaining technologies are technologies that improve product performance. These are technologies that most large companies are familiar with; technologies that involve improving a product that has an established role in the market. Most large companies are adept at turning sustaining technology challenges into achievements.

Series & Lists edit see section history

This book is in Harvard Business School. (community list)
This is book 2 of 64 in Stanford GSB. (community list)

Preceded by Understanding Silicon Valley, and followed by Competitive Strategy.

This book is in MIT Sloan School. (community list)

Authors & Contributors edit see section history

  1. Clayton M. Christensen (Author)

First Edition edit see section history

Original Language: English
Publisher: Harvard Business School Press
Country: Boston, Mass., USA
Publication Date: 1997
ISBN: 9780875845852
Page Count: 252

Classification edit see section history

  • Library of Congress: HD53 .C49 1997
  • Dewey: 658 20

Links to Supplemental Material edit see section history

Books Influenced by This Book edit see section history

   
  • The Innovator's Solution: Creating and Sustaining Successful Growth

Books That Cite This Book edit see section history

   
  • Reference Renaissance

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