The Innovation Dilemma

The Innovation Dilemma

Even companies that have good management but always seek to innovate their products within the same standards can fail precisely because they do not innovate outside the standards. If the industry had focused solely on developing VHS technology, it would never have come to DVD. This is the core concept of Harvard Professor Clayton Christensen’s book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, published in 1997. According to Professor Christensen, not investing in disruptive technology (one that breaks the current paradigm ) can be the differential between the failure and future success of the Organization.

Disruptive technology operates in unfamiliar markets and undiscovered customers, and this can cause organizations to fear that they will invest resources that would not initially yield big profits and whose future is uncertain. However, new players can appear in the market, doing just that, and leading big corporations to failure. Some known examples are: landline phone and mobile phone; combustion cars and electric cars; photographic film and digital photography; mobile phones and smartphones; tube TVs and lcd TVs; incandescent, fluorescent and LED lamps. Another interesting example comes from Apple itself, a company synonymous of innovation, that ended the market of its own bestseller product (Ipod) when lauched the Iphone. The advent of drones has also created new markets in the film industry, agriculture, surveillance, photography, logistics, etc.

To avoid failure, organizations must pursue the development of their current products while investing in disruptive technologies.