Finally, we should not be afraid to make mistakes, the credo is to fail fast and to learn from your failures. Christensen’s description has the virtue of simplicity, and simple in intellectual terms can also be beautiful. So good managers are doing exactly what they’re supposed to do when they shift resources towards sustaining … Apr 4, 2012 - Explore Suhail Mandani's board "The Innovator's Dilemma", followed by 210 people on Pinterest. How Can Tech Companies Become More Human Focused? In the recent years, the theory of The Innovator’s Dilemma has also come in for criticism from a few authors and journalists. In fact there is now no indigenous TV receiver company in the USA, and only one tyre domestic producer left, and this is in the context of industries where innovation had set the winners apart.". In “Breaking News,” Christensen, Skok and Allworth write in terms of “jobs to be done” — a phrase Christensen often uses, though it does not appear in “The Innovator’s Dilemma.” The idea behind jobs-to-be-done theory is that companies must focus on serving their customers’ and potential customers’ needs rather than on whatever technology they are using. In fact we need to applaud Lepore and whatever errors she has made. Every morning between 6.00 am and 10.00 thousands of people pour into the trains at Cambridge rail station. Let’s look at some real-world innovator’s dilemma examples. Clay Christensen, a professor at Harvard University's business school, has since his 1997 book The Innovator's Dilemma been widely acclaimed in the business world for his theory of “disruptive innovation” to explain why upstarts derail established companies. Startups and venture capital investors on the other hand are not afraid of risk, in fact, they would never be successful if they were. I’ve been a big fan of the whole Innovator’s Dilemma/Innovator’s Solution camp since I first discovered it in 2004, but I’ve also never bought into it whole hog. In short, he pinpoints in industry after industry how incumbents buy up innovative companies and then bury the talent that goes with them. Klepper, in contrast, also addressed the issue of decision-making in more detail than Christensen does. In economics, however much democracy the blogging world and post-publication peer review appear to create, august journals like the Harvard Business Review hold an extraordinary amount of power to define how business is perceived and done. But GM killed it. Professor Christensen said, in order for a business to be disruptive, it must gain … The most wounding criticism levelled against Apple is that its innovation has become incremental– its latest iPhones and iPads looking little different to their predecessors. It’s fair to say about two years ago, Gary planted the seed in my brain to write this article. It is a fascinating feature of the modern economy. have seen their markets been disrupted by startups that adopted cutting edge technologies, adapted it, and applied it to existing markets or even created completely new markets. But he argues, Lapore has not debated, she has slammed him. (Photo credit: Wikipedia). Xerox’s chief scientist Jack Goldman deliberately located this subsidiary on the west coast to create a buffer between it and Xerox HQ in New York. They never instituted it outside the first plant. It transgresses the law of taking a positive approach to life. In his book, Clayton Christensen explains there are two key parts to this dilemma: Investments that offer minimal value to the customer (at least initially) do not typically fly well with stakeholders, in particular shareholders whose goal is to minimize the risks of their investment and to make maximum profit. The time frame between development and reaping the benefits from it, is becoming smaller and smaller. Plenty of people have sniped at Christensen’s highly influential theory of disruptive innovation down the years but it has taken a fellow Harvard Professor, Lapore, to dismantle it in what Christensen calls a “criminal act of dishonesty.”. Why Is The Future Of Business About Creating A Shared Value For Everyone? He wanted to minimize management interference and create an atmosphere that would provide their scientist’s maximum freedom to undertake their work. This criticism reminds me a bit of the Halo Effect (excellent book). Critical thinking is often interpreted as criticism and people feel threatened and react by building defensive barriers. In the 1960s the American sociologist C. Wright Mills wrote Power Elites, an analysis of the centralizing force of elites. Lapore’s criticisms are journalistic, in the sense that they are not heavily footnoted or citation rich, but hardly criminal. Lepore being a historian rightly denies that the innovator’s dilemma is a theory that explains much else than the instances where it is true. But it seems as though to be critical, rather than insulting or trolling, is to be off limits, at the margin. It first made use of Kodak’s OLED patents and then engineered a way around as many of them as it could, delaying the launch of OLED screens until many of the Kodak patents had expired. Middle management play a critical role in weeding out ideas. Some form of management hierarchy is needed. Instead, it turned out that I was overly optimistic, especially regarding the timing. Not long after, Apple recruited some of the top talent at Xerox PARC and started development on the Lisa, the predecessor of the MAC. Hello Robert, All Rights Reserved, This is a BETA experience. I don’t buy this and would be surprised if other people do. But in my opinion, this is the only way to survive as a company, or at least not ending up as an irrelevant hollow shell. The Innovator's Dilemma and the Big Idea that it spawned – disruptive innovation – has been kind to its author. And then there is organizational structure, don’t get me started. It didn’t see digital coming….. The 1%, the power of minority and the concentration of economic activity go together in some unfathomable way. This is vitally important in an age where value is created by kids and twenty-somethings with a penchant for platform technology that can disrupt a whole sector. My book, "The Elastic Enterprise", co-authored with Nick Vitalari and described as a must read for companies that want to succeed in the new era of business - looks at how stellar companies have gone beyond innovation to a new form of wealth creation. (The “innovator’s dilemma” is that “doing the right thing is the wrong thing.”) ), “Hit Refresh — The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone” by Satya Nadella (Great read, this is what leadership looks like.). Not saying it means it's 100% flawed (it isn't), but like most theories about business, I think it's wise to take it with a lot of salt and not give it more predictive power than it actually has. On this post I would like to explain more about the Innovator’s Dilemma. Even prestigious Cambridge is becoming a giant hopper feeding people to London, London, London. As Satya Nadella describes brilliantly in his book “Hit Refresh”: “Leadership should inspire optimism, creativity, shared commitment, and growth. How Can AI Support Small Businesses During The Pandemic? GM stood to gain from learning about Japanese productivity. But even though the Unions liked it and it introduced flexibility, GM did not want it. All these industries have shown horrible performance in modern times. At the same time egos and status play a role as well. “The Innovator’s Dilemma — When New Technologies Cause Great Firms to Fail” by Clayton Christensen (no explanation needed, if you’ve read this article), “Chaos Monkeys — Obscene fortune and random failure in silicon valley” by Antonio García Martínez (I can highly recommend this book, also written with a lot of humor! It was drawn up for societies, but can also be used for companies. Most of the criticism centres around the fact that the triumphant entrant firms mentioned in the book no longer exist, which proves Prof Christensen’s thesis faulty. Here Is Some Good Advice For Leaders Of Remote Teams. As Karl Popper argued 50 years ago knowledge develops through criticism but we are short of that and one consequence is that many businesses become vendor-dependent for their knowledge about innovation. Gary and I talked a lot about the subject of innovation and the impediments we encountered. I am a research fellow at the Center For Digital Transformation at UC Irvine, where I am also an advisory board member, advisory board member at Crowdsourcing.org and Fellow of the Society for New Communications Research. London is priced out for many British people, yet London is where the economic action is hottest., the place you have to be. In this environment the PARC scientists invented many elements of modern computing, including what is recognized as the first true PC – The Xerox Alto. The future was crystal clear. It is the latter point that matters - disruptions that go unrecognized until it's too late. Too many people accept theories that really aren’t theories. Innovation The word innovation derives from the Latin word innovatus, which is the noun form of innovare to renew or change.. Startups are not “burdened” with an existing customer base and products they need to maintain. According to Klepper: In the 1980s GM and Toyota set up a joint venture NUMMI. But Lepore has criticized Christensen and the business debate around innovation is the better for it. Stefan Senden Massachusetts Hall, Harvard University, Cambridge, Massachusetts, USA. My book, "The Elastic Enterprise", co-authored with Nick Vitalari and described as a must read for companies that want to succeed…, I used to edit Innovation Management. Well no. Shareholders want to make more profit, not less. Clearly the principles of the innovator’s dilemma was a known challenge to Jack a long time before this term was coined by Clayton Christensen. They will become hesitant to replace the solution with a new or improved solution too soon, before the break-even point. To make matters worse (for Xerox at least), in 1979, Steve Jobs (of Apple) was invited for a conducted tour at Xerox PARC. How Is Blackness Represented In Digital Domains? But, Christensen says in BusinessWeek, they were disrupted. See more ideas about The innovator's dilemma, Letterpress business card … Criticism of social media isn’t new, and it’s often warranted. Back in 2013, I was asked to present at my company’s annual knowledge sharing roadshow. The more that gets published the more we rely on the elites, the more we defer to the elites on issues of substance. The fact that they were reluctant to give away too many details infuriated Jobs. A later book applying the ideas to higher education has led many administrators to feature Christensen at meetings and quote … But it did. Nor did another case, Seagate. The innovator’s dilemma is a very intriguing phenomenon: The more I researched on the topic, the more excited I got. Join me on Facebook or Google, I used to edit Innovation Management. But Lepore shows it doesn’t, necessarily. There is no real theory of why firms fail or why they succeed. Did Samsung, the OLED leader, disrupt Kodak in the way Christensen suggests? I think that the Innovater’s Dilemma and this law of the handicap of a head start go hand in hand, especially with the larger companies who need the full payback of their developed solutions. All of this leads to tunnel vision and causes us to lose sight of the big picture and what we’re really trying to accomplish. It is in the criticism that casts self doubt on something that is different and derails the confidence of the entrepreneur before an idea is fully expressed. I don’t buy that either. A computer company called He also points out that many of the failing companies create "children" companies, or rather dissatisfied employees who have been unable to innovate go elsewhere to do it - often into their own start-up. Your email address will not be published. The mere suggestion that the vehemence or savagery or even ineptness of that criticism is a "criminal act," to quote Christensen, says a lot about the place that serious public discourse has arrived. I’ll post another blog on that topic soon, in which I’ll look back at the trends that presented themselves 7 years ago and how they have developed since. Failure of this type, with this pattern, is distinct in the United States. Hard to believe in hindsight, isn’t it? The answer has nothing to do with disruptive innovation. With critical thinkers around, other people seem to stop thinking altogether. Why Should Leaders Stop Obsessing About Platforms And Ecosystems? Although they deserve our admiration and gratitude for being the inventor and incubator of countless elements of modern computing, they never managed to successfully commercialize these brilliant inventions. I guess it is partly fueled by our natural desire to protect our existing interests, our source of income, our duty to put food on the table. Understanding it is a process. This computer was years ahead of its time and full of innovations like Ethernet networking, graphical user interface, icons, and even a mouse. It is the one that is the most adaptable to change.” This does require some serious out of the box thinking and abandoning depleted gold mines. At some point the most valuable improvements are complete and the value per iteration becomes minimal again. Interesting. Good ideas at the bottom often fail to reach the top. The boardrooms of these companies start to freeze over as more and more vested interests make decision making next to impossible, forcing them to eschew rationality. They had in their hands the key to the future. They are attuned to putting resources behind ideas which have a high chance of success - sustaining technologies are easier to identify in this case. This debate provides a little of that relief. These companies originate in a time when they could allow themselves to move more slowly, but that time is gone. And if it is true it is not attributable to Christensen, anyway. US Steel Lack of freedom, corporate standards, administrative and management overhead significant limit an organization’s ability to innovate. Notify me of follow-up comments by email. What’s more Kodak invented much of what is now the OLED industry, the flat screen high-luminosity screens that are spreading across smartphones and TV. The real innovator’s dilemma isn’t limited to disruptive technologies that dethrone incumbents — you have to get to that point first. , a Christensen case study in the Innovator’s Dilemma, did not go under when newer players came into the market. For his part Christensen, in a BusinessWeek interview, says he welcomes a debate to refine the idea of disruptive innovation. Time is better spent honing a TED presentation. The Innovator’s Solution (2003), as the name suggests, had the goal of arming the leaders with how “The Innovator’s Dilemma (1993)” can be solved. "In a bunch of the industries I looked at they became so successful and were all US based – autos, types TV receivers – they all followed a similar pattern. This has become a growing problem as the rate of changes to technologies and markets has been increasing over the last couple of decades. Not at all. We’ve talked frequently about the “oil tanker versus the speed boat” analogy, specifically the ability to change direction faster. ... it has been misinterpreted, and more recently subject to serious criticism and take-downs. Great article, but I think that the Innovater’s Dilemma is only a part of the problem. The late Steven Klepper tells a much more convincing narrative of decline. The information technology landscape was changing rapidly. Christensen and Grove appeared on a 1999 cover of Forbes together, and the Economist magazine later named “The Innovator’s Dilemma” one of the six greatest business books ever written. did it along with one called Google, and the weapons of choice were, respectively, superior design and open source. The Innovator’s Dilemma: Narrow Theory, Widely Applied Published on January 31, 2016 January 31, 2016 • 27 Likes • 6 Comments The Innovator’s Dilemma. It has been around for a very long time. ), “The Innovators — How a Group of Inventors, Hackers, Geniuses and Geeks Created the Digital Revolution” by Walter Isaacson (Must read for anyone with an interest in the history of technology. When the endresult is put on to the market, the aim is to get as much money back from it to cover the development costs (and overhead costs). It would take years for many organizations to realize the significance of these innovations I presented about, to embrace them and to reimagine their business models. One would think organizations these days are much more aware of the innovator’s dilemma. To be fair, successful innovations are difficult to grasp. This is Cambridge, England, seat of perhaps the most prestigious university in the world. Professor Christensen is widely revered as a guru in the tech world. There is a big burden in being the guru in an age of democratized opinion. But with every attempt he made, he ran into a brick wall. This means driving innovation that people love and are inspired to work on; finding balance between long-term success and short-term wins.”. They are descriptions. We are heavily influenced by elites once more, even though we have created a far more accessible public space online. Disruptive innovation was a term coined by Professor Clayton Christensen (A US Scholar and Teacher) of the Harvard Business School in his 1997 book, ‘The Innovator’s Dilemma’. She has opened up strategy to real debate. A superior form of production, proven under GM’s management. This book dug deeper into the “how” as compared to the previous book – which only gave high-level details of spinning out a separate organization for disruptive innovations. They need to put programs in place that help to avoid these pitfalls, to stimulate innovation and critical thinking, in order to avoid becoming obsolete in this rapidly changing landscape. There can be a thousand lists and to-dos but in the end the variables are overwhelming. However, once the base is created, the value increases exponentially and each iteration is dramatically better than the last. These startups managed to outsmart big market players through innovation, by solving a unique problem, and by taking significant risk. This is actually a Harvard kinda thing - it reflects how difficult it is to make a telling criticism of ideas that stem from elite universities, even in our democratized media world. If all the innovator’s dilemma means is that companies can be disrupted but then adapt successfully, then it is not news or a theory. EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights, Three Things You’ll Need Before Starting A New Business. Connect on Twitter? When organizations grow, efficient flat management structures no longer cut it. Today we still depend on many of these inventions. The PARC researchers cautiously showed just enough details about their inventions to get Jobs excited. It is difficult enough to grasp new technologies and their potential, but on top of that, it is also extremely difficult for organizations to let go of existing business models, obligations, and cash cows that made perfect sense in the old modus operandi. A case study often cited as a classic innovator’s dilemma is Kodak. He made a huge scene (typical Jobs behavior), after which in their infinite wisdom Xerox HQ executives granted him full visibility to their brilliant innovations. There was a time when we were more willing to accept the fallibility that goes with trying to interpret the workings of society and the economy. This large source of disruption is not really explained by the innovator's dilemma, though there are instances that it might explain. So thank you for that! To summarize the Lepore-Christensen debate, Lepore presents two big arguments: She writes: “The idea of innovation is the idea of progress stripped of the aspirations of the Enlightenment, scrubbed clean of the horrors of the twentieth century, and relieved of its critics. The reality however is that I still on a regular basis encounter resistance and barriers that can be attributed to the innovator’s dilemma. Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted by markets, governments, and society. That picture is a good description of It would have required a revolution in the way GM ran its company. Improving a product takes time and many iterations, while the first of these iterations provide minimal value to the customer. It matters not whether you are pro-Lapore or pro-Christensen, but whether you are pro this debate. I expanded on this in Apple and the Innovator’s Dilemma, an academic paper I wrote in 2010 that examined why the iPod wasn’t disrupted:5 Apple’s focus on user experience as a differentiator has significant strategic implications as well, particularly in the context of the Innovator’s Dilemma: namely, it is impossible for a user experience to be too good. All these people are headed to London, the magnet in the British economy, the place where house prices are rising so fast that developers are now building one-bed apartments up around the rail station at Cambridge so that people can pour into the trains each morning to go to London. As the head of a Xerox research facility in Webster, New York, explained to him, “The computer will never be as important to society as the copier”. They must honor their existing commitments and keep their customers and shareholders satisfied. Horrible performance in modern times, disrupt Kodak in the United Auto Workers to... Fail to reach the top an organization ’ s Workforce the future of about! As Andrew a the last couple of decades joint venture NUMMI a far more public. Cited as a guru in an age of democratized opinion how can AI Support Businesses! To content Creation business about Creating a Shared value for Everyone important critique it... 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