The Innovator's Dilemma tries to explain why great companies fail, how successful companies innovate, and what the differences are between innovating sustaining technologies versus disruptive technologies. One of the reasons why companies fail is because they are held captive by their customers. It is possible for customers to continually ask for the same product they have been using for ages, but with bigger, faster, better features.... however, they might not be aware of or willing to use something that is different and potentially better. This can prevent a company from creating technologies that will be useful to the customer in the future or for entering a new growth market.

Organizations need more than capable employees to innovate. The organization needs to provide resources, processes, and values that support innovation of disruptive technologies. This can be difficult for some companies because small markets don't solve the growth needs of large companies. Management does not want to invest in markets that don't exist because they can't be analyzed. The tolerance for failure can be high in some organizations too. Smaller companies, on the other hand, are able to compete in small markets and markets with smaller margins and still create growth for the company.

Matching markets to disruptive technologies can be difficult to do. Organizations can be more specialized than they think, which can make it more difficult to innovate new technologies. Leadership in disruptive technologies can create enormous value. Established companies may not have leadership values within its organization since it is less important in creating sustaining technologies. ( )

A classic book that explains why some new ideas, "disruptive innovation" as the author calls them, can cause great companies to fail. With this type of innovation, the exact behaviors that allow a great company to stay ahead of their competition sow the seeds of the company's fall.

I first read this book about eight years ago, when I worked for a major high-tech company. After reading The Innovator's Dilemma I could clearly see many signs that my employer was facing exactly this type of "dilemma." Over the subsequent years, I saw it play out as company went from a market leader to a shrinking company that seems to only be able to balance their books by laying off employees. [They're still around---in diminished form---but I've moved on to greener pastures.:]

Christensen draws on examples from a wide range of industries, including hard disk drives, excavators, motorcycles, transistor radios, and many others. The book is applicable well beyond the high-tech industry, although the faster pace of change in technology-driven fields probably makes these changes happen on shorter time scales.

I found the book a fascinating and enjoyable read. But Christensen is an academic, so this is a book that builds theories and marshals evidence to support them. To me, that makes his conclusions all the more convincing, but some of my acquaintances have found it somewhat dry.

Overhyped. Techno-babble analysis of the hard drive market comes across as something of a procrustean bed. ( )

Some good ideas.

Like alot of the business books I've read, it advocates that a large company should be an 'incubator' for a bunch of small ideas.

This may be the first book to advocate such a position, though. (At least it's cited so much that I think it's the first). ( )