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The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials)

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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 "disruptive technology" of the Honda Supercub, Intel's 8088 processor, and the hydraulic excavator, Christensen shows why most companies miss "the next great wave." Whether in electronics or retailing, a successful company with established products will get pushed aside unless managers know when to abandon traditional business practices. Using the lessons of successes and failures from leading companies, The Innovator's Dilemma presents a set of rules for capitalizing on the phenomenon of disruptive innovation.

Grow or Die -
The great irony here is the astonishing failure rate of apparently successful incumbents.

These so-called great companies do an excellent job responding to their customers' needs. They invest heavily in new technology. They employ the smartest executives. And yet they still get wiped out by upstarts.

That the Innovator's Dilemma is a business book is purely incidental. While the business-related insights in the book are extraordinary, they don't account for its real value.

This book is actually a commentary on human nature itself. It is a case study that affirms the following idea: "success is the mother of complacency," while it utterly explodes the old myth: "if it ain't broke, don't fix it."

This excellent book is a reminder that human beings essentially have two options in life: grow or die. I think Lao Tzu summed it up best when he wrote in the Tao Te Ching, "the hard, the unyielding are death's companion. The weak and pliant belong to life."

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Why Big Companies Miss Opportunities -
This book starts by looking at why leading, well-run companies miss the boat when it comes to certain types of key innovations. The author shares 5 principles that are largely responsible-

1. Companies depend on customers and investors for resources
2. Small markets don't solve growth needs of large companies
3. Markets that don't exist can't be analyzed
4. An organization's capabilities define its disabilities
5. Technology supply may not equal market demand

Each of these is a fascinating topic, on which the author provides actionable information. Some may seem somewhat obvious, but the author goes below the surface to illustrate these carefully, even going as far as introducing an organizational capabilities framework to help assess capabilities and hence disabilities.

The author makes the case that the above principles are only indirectly responsible for the stumblings of the large companies. The direct cause was managers not heeding these principles. This is likened to the first aviators not understanding the principles of drag and lift. Once understood and obeyed, those principles allowed for flight.

The book begins with a twenty page introduction that gives many examples of leading firms stumbling badly, and then outlines the basic premise of the book. The first four chapters then show examples with much more details, as well as showing how other theories fail to explain the results. The next five chapters focus individually on each of the principles listed above. That is followed by a case study, applying the principles to how the author would assess and deal with electric vehicles. Finally, the book ends with a summary tying it all together. The book is very clear and well written.

every product manager must read this -
OK, I admit, some of it can be a bit boring, especially the first couple of chapters. But the premise and his argument are great.

A product manager who has not read this book is not a product manager at all!

unconvincing -
This book analyzes why established successful companies repeatedly miss "less sensible" (to their own value network) innovations in the low-end "emerging" market and how products in the low end market eventually displace existing products in the entire market. The book does a comprehensive analysis of the phenomena.

However, I am not convinced with the analysis. People make wrong forecasts of trends and miss emerging markets for many reasons. New entrants fail in trial and error with this extremely high risk game. Does it make sense for an established company to maintain an independent unit for playing this high risk game at a considerable expense? Or should they be the follower and let small companies bear the initial high cost ? I don't think there is a clear answer like what the author has suggested.

There are some uncommon and incorrect use of technology terms (e.g. Java "protocol",computer "automated "design), which let you doubt the credibility and seriousness of the author. The writing is in fairly academic style with great clarity. But it can be repetitive in many places, revisiting the same materials.

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Disrupt your competitors, not your customers! -
With the Innovator's Dilemma, Clayton Christensen delivers a very powerful analysis of the role of innovation in gaining market leadership. The question raised is whether market leadership can be sustained through innovation alone. Indeed, the core of the Innovator's Dilemma illustrates how successful companies with established solutions, marquee customers and a valued brand keep being threatened and at time vanquished by start-ups. A recent example would be how established enterprise software vendors have been shaken up by disruptive startups: Remember Salesforce.com vs. Siebel Systems? Christensen addresses a difficult problem that most successful customer focused companies face. Precisely, because it is a formidable challenge for an established company to bring disrupting technology to its own installed base of customers.