New Technology Lecture L09 The Innovator's Dilemma
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New Technology Lecture L09 The Innovator's Dilemma

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One of the great irony of successful companies is how easily they can fail. New companies are founded to take advantage of some new technology. They become highly successful and but when the ...

One of the great irony of successful companies is how easily they can fail. New companies are founded to take advantage of some new technology. They become highly successful and but when the technology shifts, something new comes along, they are unable to adapt and fail. This is the innovator’s dilemma.

Then there are companies that manage to survive. For example, Kodak survived two platform shift, only til fail the third. IBM has survived over 100 years. What do successful companies do differently?

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    New Technology Lecture L09 The Innovator's Dilemma New Technology Lecture L09 The Innovator's Dilemma Presentation Transcript

    • Lecture L09 THE INNOVATOR’S DILEMMA
    • NMENT NG ASSIG READI Economist article: The last Kodak moment? ! Kodak is at death’s door; Fujifilm, its old rival, is thriving. Why?
    • Founded in 1880 Noted for their 
 pioneering technology “You press the button,
 we do the rest” By 1975 they had 90% of firm and 85% of 
 camera sales in US
    • Technology is one of the major factors in change
    • The Innovators Dilemma Firms that 
 s u c c e e d in one generation of innovation almost inevitable become hamstrung by their own success and thus doomed to 
 l o s e o u t in the next wave of innovation Source:  (Christensen,  2000)  
    • Surviving Technological Change What is it that kills successful
 companies?
    • Understanding the Job Clayton Christensen professor at Harvard Business School
    • Reason for Failure? If you become wildly successful 
 because you do everything right, 
 you're doomed
    • Traditional Concept of 
 Good Management Focus on your best customers Focus on your highest margin products Source:  Yang,  Harvard
    • The RPV Theory Resources, Processes and Values Theory   R e s o u r c e s (what a firm has), 
 p r o c e s s e s (how a firm does it´s work), and 
 v a l u e s (what a firm wants to do) 
 
 collectively defines an organisation’s strengths as well as weaknesses and blind spots Source:  (Christensen,  2000)  
    • WHEN P L AT F O R M S H I F T HAPPEN, COMPANIES FIND IT HARD TO MOVE TO NEW GENERATION OF TECHNOLOGY
    • Only ONE established firm managed the transition from one generation to the next Image  Source  Page:  http://www.teach-­‐ict.com/wp/archives/264
    • Why did they fail?
    • They listened to their customers
    • Case Study Betware transformed from custom software development to product development – from technology to service
    • If I’d asked my customers what they wanted, they’d have said a faster horse - Henry Ford
    • We tend to view technology based on 
 past usages 
 but not the future potential
    • The hardest things when you are trying to affect change ! Steve Jobs Insult Response, WWDC 1997
    • Traditional Concept of 
 Good Management Leads successful companies to ignore disruptive innovations with deadly consequences Source:  Yang,  Harvard
    • The Innovation Trap “We listen to our best customers”
    • The Innovation Trap “Our customer is asking for the new product, but we don’t have it and its to late the enter the market”
    • The Innovation Trap “Our customer are starting to ask for our new product.”
    • It is very difficult for incumbent companies to disrupt themselves, so usually others will do it
    • Markets that do not exist cannot be analysed   ! - Clayton Christensen