3 main findings from research
* Sustaining technologies are different than disruptive technologies
* The pace of progress often precedes the market’s awareness of the need
* Structures of companies color the choices and investments they make
Five Principles of Disruptive Technologies:
1. Companies depend on customers and investors for resources. Customers drive internal decision-making because companies are resource-dependent.
2. Small markets don’t solve the growth needs of large companies. Large companies are not interested in small emerging markets, and they wait too long.
3. Markets that don’t exist cannot be analyzed.
4. An organization’s capabilities define its disabilities.
5. Technology supply may NOT equal market demand.
Successful Innovation Managers
* Embedded projects in an organization that found customers
* Embedded project in small organizations that sought small wins.
* Planned to fail early and inexpensively: trial and error.
* Used resources of the larger organization, but not the company’s values or cost structure.
* Marketed to new customers and markets. Did NOT search for technology breakthroughs.
An organization is defined by it resources (people), processes, and values (RPV). New organizations spawn new processes aligned to new requirements. When integrated into the larger organization, these processes are subsumed. New resources, especially people, plugged into old processes and values, do NOT constitute a change-capable organization.
Seven Innovation Dilemmas
First: Market progress is separate from technology progress. Customers do not always know what they need.
Second: Innovation requires resource allocation which is extraordinarily difficult for disruptive technologies.
Third: Disruptive technology needs a new market. Old customers are less relevant. Disruptive technology is a marketing problem, not a technological one.
Fourth: Organizations have narrow capabilities. New markets enabled by disruptive technologies require very different capabilities.
Fifth: Information required to make investment decisions does not exist. Failure and iterative learning are required.
Sixth: It is not wise to always be a leader or always a follower. Disruptive innovations reward leaders.
Seventh: Small entrant firms enjoy protection because they are doing things that do not make sense to the industry leaders.