Jumia Books The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

The Innovator’s Dilemma

The dilemma arises when a company’s strong focus on sustaining innovations, driven by its success and customer loyalty, hinders its ability to recognize and invest in disruptive innovations. This is because:

• Good management practices allocate resources to sustaining innovations, which enhance current products’ performance and support upmarket mobility.
• Customer feedback and market research prioritize sustaining innovations, as they are based on existing customer needs and preferences.
• Innovation metrics focus on sustaining innovations, measuring success by incremental improvements rather than radical changes.

Consequences

As a result, great firms may:

• Miss opportunities to develop disruptive innovations, allowing new entrants to seize the market.
• Invest too late or inefficiently in disruptive technologies, leading to costly and ineffective adaptations.
• Fail to abandon unprofitable or declining businesses, perpetuating losses and distracting from new opportunities.

Key Takeaways

1. Fail fast: Embrace experimentation and rapid iteration when developing disruptive technologies.
2. Resource allocation: Balance investments between sustaining and disruptive innovations.
3. Adapt to changing markets: Recognize and respond to emerging trends and technologies.

By understanding the Innovator’s Dilemma, companies can develop strategies to navigate this paradox and capitalize on disruptive innovations, ensuring their continued success and relevance in a rapidly changing business landscape.