This is highly recommended for Business Management students and corporate people facing ever changing world of business. Christensen brings out fundamental differences between sustaining success technology and disruptive technology. Disruptive technology is usually simpler and has lower performance than established technology at the beginning. This gives impression that the new technology may not be able to serve the current market. But historically, these disruptive technologies develop and catch up the main stream markets as well and by then its too late for incumbents to react. For sustaining technologies, incumbents can take second mover approach but for disruptive technologies there are significant first mover advantages which can't be achieved as a second mover.

The disruptive technologies are usually a marketing problem than a generally thought technology problem. One needs to find market for the initial upcoming technology in its current form rather than waiting for technology maturity to meet demands of customers of current product. It is difficult to manage disruptive technology in the same value network of current technology or market as disruptive technology requires completely different values and processes to succeed. Best way is to build a spin out organisation so that it can manage small initial market available for new technology, build on small wins, go on learning path and don't get stuck due to battle of resources posed by parent organisation.

The book primarily focuses on Disk Drive industry to bring out the conclusions as this industry underwent various technological changes and disruption phases. Although the book becomes repetitive sometimes, these reiterations help to memorize the approach and concepts.

Excellent book, although a really hard read. The book is really dense and it is tiring to go through, but it so much packed with knowledge and valuable learning that it makes up more than for it.

Probably the best book for everyone who wants to understand innovation and how new technologies emerge. What's great about this book is that it's been written in the 90-s, but even in the 2020-s I find it extremely relevant.

A (relatively) old but thorough book with strong evidence which resonates strongly to this day.

Professor Christensen writes this book as a prescriptive guide on how good managers can fend off disruptive technologies which take over the market and overthrow established firms.

However, entrepreneurs seeking to transform existing markets will also find this book's broad exploration of the topic highly insightful.

What's missing from Professor Christensen's work is an exploration of modern case studies and a more thorough examination of the scenarios which (perhaps seemingly) violate the laws outlined in this book.

For instance, the book summarises its findings with the final case study of the electric vehicle industry and an examination of its future (from the early 2000s perspective). Elon Musk's Tesla, which is arguably the most prominent electric vehicle firm today, is headed for a strong path to success in spite of seemingly violating the fundamental laws which make this book shine.

Nevertheless, the evidence outlined in the book is highly convincing and is certainly applicable to many business scenarios to this day, and likely onwards into the future.

This is a great book on innovation and how start-up and entrepreneurs ought to fashion their company to go against entrenched incumbents.

The gist of the book is an interesting trend the author found when analyzing the industry. He found that certain innovations were "disruptive" -- meaning they changed the way a market worked, and some were "sustaining" -- meaning they were really just improvements on existing products.

The author traces disruptive innovations through the steel industry, where it took $100M + to build an integrated steel mill. Someone one day discovered a way to make steel with a much cheaper furnace -- a "mini-mill". This mini-mill made steel that was ugly and weak, compared to the integrated steel mills -- but it was good enough for one type of steel: rebar. It could make rebar about 10x cheaper than the integrated steel mills, and it didn't matter that it was ugly.

The integrated mills could not compete with the mini-mill due to costs. But, more importantly, they did not *want* to compete. Rebar was the lowest quality of steel, the most commoditized, and the customers were the least loyal and most price-sensitive (read: difficult). They were happy to walk away from that business...they really made no money in that market anyway. So the mini-mills experienced almost no competition from the incumbant.

After a few years the mini-mills all experienced decreasing profits due to more mini-mills entering the market. Soon, someone discovered how to make the next level of steel -- I forget what it was, elbow joints or something. The same cycle happened...the integrated mills walked away from a fight and the mini-mills saw huge profits for a few years until they all caught up.

Slowly, innovation after innovation ended up eating away all of the business from the integrated mills -- who never once tried to compete for the business they were losing. Today there are no integrated mills in existence.

This is the gist of the book: if you are going to create a new company, you ought to learn from history and fashion a product that will have the existing leaders gladly walking away from the business you are fighting for.

Anyway, this is a long review. Great book, very thought provoking.

Read this for class. Probably (and by probably I mean never) would not choose to read this book on my own. It was a decently enjoyable book considering I was forced to read it because I generally hate being forced to read something. I feel like it was repetitive and could have been shorter but not a bad read.

Clayton Christensen is to the study of innovation what Thomas S. Kuhn is to science. Kuhn's "normal science" is analogous to Christensen's "sustaining innovation", and "scientific revolutions" is like "disruptive innovations". Kuhn sees progress in science not as the discovery of new phenomena, but as fitting existing "anomalies" into a new "paradigm". Christensen too sees disruptive innovation as finding new markets for existing technologies. I'm sure the analogy can be taken further, but in short, both will change the way you think about how innovation progresses.

Just as with Kuhn's book The Structure of Scientific Revolutions, I felt that Christiensen belabours his point a little too much, yet each chapter adds a few good points - like the Resource/Process/Values framework, or watching your customers rather than listening to them, and many others I cannot recall.

If you like business books, this one is a classic. It does feel outdated at times until you think about how its lessons are still applicable today yet so frequently neglected.

The concepts in this book are interesting and explain a lot about why my previous company struggled to produce successful technology. The book itself was unbelievably dry. The summary is that it takes different skills, risk tolerance and management to be successful at innovating, than it does to maintain an existing business.

I finally got around to reading this book which is highly recommended in the world of business and technology. It's worth the time. The central question the book tries to address is why great, well-managed companies fail. The main thesis of the book is that a firm is beholden to resource, process, and value constraints that are both the cause of its success and downfall. When a company builds a great technology, it then devotes resources to improving its performance. Such improvements are what Christensen coins "sustaining technologies," or roughly incremental improvements to performance capability that makes a technology more useful to its existing customer base. However, when a "disruptive technology" arises that captures a different portion (often lower-end) of a market, it's very difficult for a large successful firm to devote resources to that technology. Therein lies the innovator's dilemma:

"That’s why we call it the innovator’s dilemma: doing the right thing is the wrong thing. This dilemma rears its head when a type of innovation that we’ve termed disruptive technology arises at the low end of the market, in the simplest, most unassuming applications."

Crucially, Christensen's focus is on successful companies that are well-managed, rather than firms that fell by the wayside due to unforced errors. An interesting point that Christensen emphasizes throughout the book is that the companies that ultimately fail were often some of the first to pioneer the very disruptive technologies that disrupted them:

"Sears was praised as one of the best-managed companies in the world at the very time It let Visa and MasterCard usurp the enormous lead it had established in the use of credit cards In retailing."

"One theme common to all of these failures, however, is that the decisions that led to failure were made when the leaders in question were widely regarded as among the best companies in the world."

"there is something about the way decisions get made in successful organizations that sows the seeds of eventual failure."

This is because the value of disruptive technologies is not obvious at first, and such technologies often have no use to a firm's existing customer base. The result of this is that for a firm that has a dominant market position, it doesn't make sense to throw resources at a disruptive technology because it's often lower margin and takes focus away from the "crown jewel" business.

"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 cheaper, simpler, smaller, and, frequently, more convenient to use. There are many examples in addition to the personal desktop computer and discount retailing examples cited above."

"First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies."

"while managers may think they control the flow of resources in their firms, in the end it is really customers and investors who dictate how money will be spent because companies with investment patterns that don’t satisfy their customers and investors don’t survive. 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. As a result, these companies find it very difficult to invest adequate resources in disruptive technologies—lower-margin opportunities that their customers don’t want—until their customers want them. And by then it is too late."

"But while a $40 million company needs to find just $8 million in revenues to grow at 20 percent in the subsequent year, a $4 billion company needs to find $800 million in new sales. No new markets are that large. As a consequence, the larger and more successful an organization becomes, the weaker the argument that emerging markets can remain useful engines for growth."

Christensen then goes on to elaborate on these concepts by looking at the disk drive space. This space is instructive because the product cycles are so short; Christensen analogizes studying disk drives versus studying other businesses to studying fruit flies (2 week lifecycles) as a geneticist versus studying humans (70 year lifecycles).

Over and over, incumbent firms failed to recognize the value of disruptive technologies because they served different markets, from mainframes to mini-processors to desktop computers to non-computing applications, each evolution of disruptive technology provided different values (portability, durability) outside of the previous generation's performance specifications. Over time, such performance specifications also improved to meet market demand for specific applications. Indeed, the introduction of a new product may CREATE a market. For instance, although Honda was attempting to capture the American motorcycle market by building large powerful motorcycles, it instead created and captured a much bigger market: that of dirt biking. The existing customers who bought motorcycles had no interest in such an application at the time.

So how should firms respond? Christensen offers a focus on flexibility and organizational independence:

"Markets that do not exist cannot be analyzed: Suppliers and customers must discover them together. Not only are the market applications for disruptive technologies unknown at the time of their development, they are unknowable. The strategies and plans that managers formulate for confronting disruptive technological change, therefore, should be plans for learning and discovery rather than plans for execution."

"The dominant difference between successful ventures and failed ones, generally, is not the astuteness of their original strategy. 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."

Ultimately, I think this book is worth the hype. It provides some very counterintuitive insights on why well-managed firms fail (the same reasons why they succeed), and has convincing examples and data to back up its main claims. Definitely give it a read.

Although a classic, it was a bit repetitive and hard to get through. The first and last last chapters give a good summary as one of the reviews said.

This is one of those books that so many people mention/name drop that I just had to read it to see what it was all about. (Next on the list: Game of Thrones). It was well worth the read.

In the Innovator's Dilemma, Christensen argues that in some cases the reason why good, solid companies fail to stay ahead of the competition is not because they are incompetent, but because their structures/ processes/ incentives are all geared towards managing "sustaining technological change", as opposed to "disruptive technological change". When disruptive technologies emerge, the market for them is often not clear. The performance specs of these disruptive technologies do not meet the needs of companies' existing customers (e.g. in terms of capacity for disk drives) but have other attributes (e.g. physical size) that could potentially be of value to other (as yet undefined) markets. But in good companies, their processes are geared towards developing products that will meet the needs of their existing customers. Moreover, these firms are embedded in a larger "value network" that encompasses both customers and suppliers geared towards meeting the needs of existing customers. Small emerging markets also do not address the "near-term growth and profit requirements of large companies". These companies are therefore great at managing sustaining technological changes but poor at handling disruptive technological change.

To manage disruptive technological change, therefore, Christensen asserts that managers need a fundamentally different approach - "discovery-driven planning", i.e. planning to learn vs planning to execute. Assume you don’t know anything for certain. Be clear what are the assumptions upon which your plans or objectives are based. Test these assumptions. This requires you to ensure that your strategy will allow you to make shifts and adjustments as necessary and that these shifts are not costly.

The most insightful chapters for me were Chapt 8 on "How to Appraise Your Organisation's Capabilities and Disabilities" and Chapt 10 on "Managing Disruptive Change: A Case Study". In Chapt 8, Christensen breaks down how managers can assess the ability of their organisation to manage different kinds of innovation by looking at (i) the kind of resources it has; (ii) the mechanisms/processes by which the organisation creates value, which is "intrinsically inimical to change" in order to ensure consistency; and (iii) the values of the organisation that employees use to make prioritisation decisions. Christensen notes that "the larger and more complex a company becomes, the more important it is for senior managers to make independent decisions about priorities that are consistent with the strategic direction and the business model of the company....[but these] clear, consistent and broadly understood values, however, also define what an organisation cannot do." Dealing with disruptive change therefore requires managers to create new capabilities, whether by acquiring an organisation whose processes and values match the new task (and keeping them separate from the existing organisation) or separating out an independent organisation and developing within it the new processes and values required.

In Chapt 10, Christensen takes us through a step-by-step guide of how he might hypothetically think about managing the potential disruption posed by electric vehicles, if he were a manager of an auto maker. First, assessing whether electric vehicles represent a disruptive change, based on whether their trajectory of improvement might some day make them a viable option for the mainstream market, i.e. will the trajectory intersect the trajectory of market demands. Second, finding a potential market for the vehicles, by getting out there and trying to sell the product to different kinds of customers to see what hooks. Third, having a strategy to learn (or rather, to fail, fail fast and try again). This entails conserving resources for multiple iterations, rather than putting all of one’s resources in designing the perfect product the first time round.

Although Christensen’s book looks at the commercial sector, you can apply the insights from the book to other domains, including the public sector. What might it mean for the public sector to manage disruptive change, in the way organisations and teams are set up and resourced? What might a strategy for learning mean in the context of designing public services and infrastructure? In IT for instance, might it entail a shift away from the “waterfall” method of designing infrastructure towards the agile methodology?

Interesting idea. Not particularly worth reading the whole book. A summary would be fine.