Book Review: The Innovator's Dilemma by Clayton M. Christensen

I'll bet The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. Christensen is a fascinating read. I say that because I read the summary courtesy of the getAbstract service, and those 5 pages just flew by. The thesis of this book is that the paradox of failure, the innovator’s dilemma, is that there is a point at which the right things are dead wrong. Innovation comes in two forms. Sustaining innovations improve on existing, established products. Disruptive innovations under-perform existing products but disrupt the value proposition.

The problem arises because successful companies focus on sustaining innovation at the peril of ignoring disruptive innovation. In practice company managers do not really decide where they will allocate investments. Their customers and investors decide. Customers look for improvement to what they are currently using. Investors look for opportunities with the largest return. So new ways of doing things, perhaps with lower returns on investment, get overlooked or shelved. The getAbstract summarizing author recommends that "although any individual disruptive technology may fail, companies that treat disruptive technologies as a portfolio, making small investments and learning from mistakes, can succeed."

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The Take-Aways from the getAbstract summary include:

• "Established, successful companies do all of the important things right.
• Sometimes doing all of the important things right makes these companies fail.
• Disruptive innovations usually start by selling to new - or unprofitable - customers.
• Established companies invest in improving their mainstay products, often to the point where quality outstrips what the market needs or will buy.
• Companies exist in value networks where the members have similar metrics, margins, and motivations.
• Moving from one value network to another is very difficult.
• Established companies' employees often discover or invent disruptive innovations, but the firm's most valuable customers typically have no interest in innovation.
• The pioneering employees often quit to build new firms to market their innovation.
• When disruptive innovators improve the quality of their product, initially uninterested customers may begin to find that it fills a need and it is cheaper.
• When the established company notices the big market for the disruptive innovation, it enters late and typically fails to compete."

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Autodesk Labs tries to strike a healthy balance. Some of the ideas for the technologies we preview come from customers. Some come from employees. The technologies start small so they are allowed to fail. Regardless of where the idea originated, feedback charts its course. Thanks to all of the early adopters out there who shape our technologies.

Sometimes I will post an announcement about a new technology preview in a discussion forum only to be rebuffed as in "I can't believe you are wasting time on trying something new when you haven't fixed my bug in the existing product yet." This is indeed our dilemma - balancing the needs of the existing customers while keeping our eye on where technology is going. We will be happy to serve our customers using desktop applications and cloud-based services for the years ahead, but we can't do that if 3 guys in a garage develop technology that we should have developed ourselves. We have to work on things besides faster horses.

Balance is alive in the lab.