The Innovator's Dilemma

The dilemmas posed to innovators by the conflicting demands of sustaining and disruptive technologies can be resolved. Managers must first understand what these intrinsic conflicts are. They then need to create a context in which each organization’s market position, economic structure, developmental capabilities, and values are sufficiently aligned

Disruptive technologies bring to a market a very different value proposition than had been available previously. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheap

Guessing the right strategy at the outset isn’t nearly as important to success as conserving enough resources (or having the relationships with trusting backers or investors) so that new business initiatives get a second or third stab at getting it right. Those that run out of resources or credibility before they can iterate toward a viable strateg

Companies stumble for many reasons, of course, among them bureaucracy, arrogance, tired executive blood, poor planning, short-term investment horizons, inadequate skills and resources, and just plain bad luck.

If the acquiree’s processes and values were the reason for its historical success, a better strategy is to let the business stand alone, and for the parent to infuse its resources into the acquired firm’s processes and values. This strategy, in essence, truly constitutes the acquisition of new capabilities.

The HP project managers concede in retrospect that their most serious mistake in managing the Kittyhawk initiative was to act as if their forecasts about the market were right, rather than as if they were wrong.

This means that the very mechanisms through which organizations create value are intrinsically inimical to change.

The highest-performing companies, in fact, are those that are the best at this, that is, they have well-developed systems for killing ideas that their customers don’t want.

Huge size constitutes a very real disability in managing innovation.