The Innovator’s Dilemma by C. Christensen. Book review.
Well-managed companies fail because they are well-managed.
Intro
It was one of podcasts held by Arman Suleimenov interviewing Amit Singhal, where I got this indirect book recommendation from. Although the audience for this content is suitable for everyone, I think it may greatly be of use to startups, and/or big company managers on the path to utilize so-called disruptive technologies. The author provides foundational basis: terminology, reasons, consequences and guidance on potential solutions to resolve Innovator’s dilemma. Throughout chapters I was driven by historical episodes of success/failure stories of known companies, lessons learnt and case studies with necessary charts that illustrate concepts related to disruptive technologies.
Main contents:
The title of the book is pretty interesting to think about. It is called The Innovator’s Dilemma, since there is a point at company’s growth where the businesses must put on the scale at one hand the customers’ current needs, and on the other — adopting new innovations and technologies which will answer customers’ future needs. Disruptive technology is the response to customers’ future needs.
Author focuses on 4 principles of disruptive technology:
- Companies depend on customers and investors for resources
- Small markets don’t solve the growth needs of large companies
- Markets that don’t exist can’t be analyzed
- Technology supply may not be equal market demand
Large tech usually companies have difficulties for utilizing disruptive tech. So, here is the recommendation for managers author provides that face disruptive technologies:
- Give responsibility for disruptive technologies to organizations whose customers need them so that resources will flow them
- Set up a separate organization small enough to get excited by small gains
- Plan for failure. Don’t bet all your resources on being right the first time. Think of your initial efforts at commercializing a disruptive technology as learning opportunities. Make revisions as you gather data.
- Don’t count on breakthroughs. Move ahead early and find the market for the current attributes of the technology.
My top 5 highlights from this book:
“Those who study genetics avoid studying humans. Because new generations come along only every thirty thirty years or so, it takes a long time to understand the cause and effect of any changes. Instead, they study fruit flies, because they are conceived, born, mature, and die all within a single day.”
“Entrant firms have an attacker’s advantage over established firms in disruptive technology innovations.”
“The average company that led in disruptive technology exchanged a market risk, the risk that an emerging market for the disruptive technology might not develop after all, for a competitive risk, the risk of entering markets against entrenched competition.”
“Amid all the uncertainty surrounding disruptive technologies, managers can always count on one anchor: Experts’ forecasts will always be wrong.”
“Well-managed companies fail because they are well-managed.”
Bonus:
“You can always tell who the pioneers were. They are the ones with the arrows in their backs.”
Thing(s) that I love this book for:
At the end of each chapter, author provides extensive notes and references to each of important statements discussed. Reader can deepen into further readings and learn on the topic with the directions given from the author’s side, be it a reference to an academic article, short historical excerpts or notes from personal experience or interviewing experts’ opinions on the field.
My final thought
This is just a first start for active reading and reviewing books on technology, business and science related topics, but I already feel I would recommend this book to everyone looking to get the grasp of fine read on innovations, disruptive technologies and those planning to start a business in tech.
P.S.
I am going to put short reviews on the books read periodically and share my fresh insights and highlights. Feel free to comment, I would love to hear back.
