The Innovator's Dilemma
Successful firms can miss disruptive changes because their established customers and financial criteria make unfamiliar markets unattractive.
Sustaining innovations improve performance valued by existing customers.
Listening carefully to present customers can still make a firm miss a future market. Christensen's dilemma is unsettling because the failure can grow from decisions that originally looked sensible.
Disruptive approaches initially serve different or less demanding needs.
Early markets can look small and financially unattractive.
Incumbents rationally allocate resources toward established profitable demands.
New approaches improve and can later challenge the incumbent.
The distinction is not simply old businesses resisting new ideas. Different opportunities need different measures of success, and an organisation can reject one because its existing standards make it look unpromising.
The problem therefore need not originate in incompetent management.
Organisational processes and values shape what opportunities receive support.
Separate arrangements may help develop businesses requiring different criteria.
The framework does not make every new technology disruptive.
Its central tension concerns success making certain forms of adaptation difficult.
Its central tension concerns success making certain forms of adaptation difficult.
How can listening to profitable customers and making sensible investments cause a successful firm to miss its next market?