new technology lecture l09 the innovator's dilemma
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One of the great irony of successful companies is how easily they can fail. New companies are founded to take advantage of some new technology. They become highly successful and but when the technology shifts, something new comes along, they are unable to adapt and fail. This is the innovator’s dilemma. Then there are companies that manage to survive. For example, Kodak survived two platform shift, only til fail the third. IBM has survived over 100 years. What do successful companies do differently?TRANSCRIPT
Lecture L09 THE INNOVATOR’S DILEMMA
Economist article: The last Kodak moment? !
Kodak is at death’s door; Fujifilm, its old rival, is thriving. Why?
READING ASSIGNMENT
Founded in 1880 Noted for their pioneering technology
“You press the button,we do the rest”
By 1975 they had 90% of firm and 85% of
camera sales in US
Technology is one of the
major factors in change
Firms that succeed in one generation of innovation almost inevitable become hamstrung by their own success and thus doomed to lose out in the next wave of innovation
Source: (Christensen, 2000)
The Innovators Dilemma
Surviving Technological Change
What is it that kills successfulcompanies?
Understanding the Job Clayton Christensen
professor at Harvard Business School
Reason for Failure?
If you become wildly successful because you do everything right,
you're doomed
Source: Yang, Harvard
Traditional Concept of Good Management
Focus on your best customers Focus on your highest margin products
Resources, Processes and Values Theory R e s o u r c e s (what a firm has), p r o c e s s e s (how a firm does it´s work), and v a l u e s (what a firm wants to do) collectively defines an organisation’s strengths as well as weaknesses and blind spots
Source: (Christensen, 2000)
The RPV Theory
WHEN P L AT F O R M
S H I F T HAPPEN, COMPANIES FIND IT HARD TO MOVE
TO NEW GENERATION OF
TECHNOLOGY
Image Source Page: http://www.teach-‐ict.com/wp/archives/264
Only ONE established firm managed the transition from one
generation to the next
Why did they fail?
They listened to their
customers
Case StudyBetware transformed from custom software development to product development – from technology to service
If I’d asked my customers what
they wanted, they’d have said a
faster horse - Henry Ford
We tend to view technology based on
past usages but not the future potential
The hardest things when you are trying to affect change !
Steve Jobs Insult Response, WWDC 1997
Source: Yang, Harvard
Traditional Concept of Good Management
Leads successful companies to ignore disruptive innovations with deadly consequences
“We listen to our best customers”
The Innovation Trap
“Our customer is asking for the new product, but we don’t have it and its to late the enter the market”
The Innovation Trap
“Our customer are starting to ask for our new product.”
The Innovation Trap
It is very difficult for incumbent companies to disrupt themselves,
so usually others will do it
Markets that do not exist cannot be
analysed !
- Clayton Christensen