Tuesday, March 21, 2006

The Innovator's Dilemma

So, I ran into this book on someone's site and I thought it looked like something I should read. Now, it is almost 10 years old, and since many of the examples Christensen uses to illustrate his points are now in the realm of the historical--and since the book goes into fairly great technical detail about the affected industries, the book doesn't read as easily as it might have once.

However, the book is still really relevant because of the principles it uncovers. For one thing, Christensen coined the term "disruptive technology," which has become a very common way of speaking about the topic. Quoted below, from the oracle of wiki:
a disruptive technology is a new technological innovation, product, or service that eventually overturns the existing dominant technology in the market, despite the fact that the disruptive technology is both radically different from the leading technology and that it often initially performs worse than the leading technology according to existing measures of performance.
So the point of the book is simple. Big companies, by being good at what big companies do best (think process optimization, good controls, etc.) put themselves at risk for being overturned by the latest and greatest "disruptive technology." Basically, the company gives others the tools to compete effectively and beat them at their own game (or at least knock the wind out of them). In a nutshell that's it.

Clayton makes this argument in The Innovator's Dilemma, but then I need to read the next book, The Innovator's Solution, to figure out what one is supposed to do in these situations.

Update: Here's a great link from CIO that has an interview with Christensen.

Another update: Upon further questioning of the wiki oracle, I found this to be quotable--which treats what to do if you find yourself being disrupted:
Christensen recommends that existing firms watch for these technologies, invest in small firms that might produce them, and continue to push technological demands in their core market so that performance stays above what disruptive technologies can achieve.
Okay, sorry, one more update: Just came across this relevant tidbit from the New York Times via Signal vs Noise, where they're talking about Craigslist "underdoing" Microsoft.

The Innovator's Dilemma, by Clayton Christensen
ISBN # 0875845851