An interesting summary of the key takeaways from the famous innovation management book "The innovator's dilemma". The book won Global Business Book Award and was the best business book of the year in 1997.

1. The innovator’s dilemmaWhen New TechnologiesCause Great Firms to Fail

2. Clayton M.Christensen
Professorof BusinessAdministration
HarvardBusinessSchool
About theAuthor:
GlobalBusinessBook Award
Thebest businessbook oftheyear (1997)
The Innovator’sDilemma

3. Li Wei
Technology commercialization manager
Exploit Technologies PteLtd (ETPL)
Agency for Science,Technology and Research (A*STAR, Singapore)
Summary andpresentationby
B. Eng&Ph.d (Engineering)
Nanyang Technological University
Singapore
M.B.A.
INSEAD
Fontainebleau, France

4. This is John

5. Say ”Hi”, John
Hi˜

6. John is a product engineer ina well
established technology company

7. Hiscompany has been the leader in
this market for decades

8. But one day ...

9. John’s company wentout of
business, and he losthis job

10. In thepast one year,his
company lost almost all their
customers toacompetitor
withadisruptive innovation

11. John is really sad because hiscompany
didn’t do anything wrong,somehow,
they lost the competitionso badly

12. But John doesn’t know that his
company failed because
THEYDIDEVERYTHINGRIGHT

13. To understand thereason, John must know
twotypesof innovation
Sustaining
Innovation
Disruptive
InnovationVS

14. improves product’s performance based
on the features valued by mainstream
customers
SustainingInnovation

15. It is aiming at moving upward along
certain performance metrics
Speed
power

16. often involvedlower performance
inmany product features
Disruptiveinnovation

17. born inthe niche market that’s neglected
by current market offering
Itisfor
nichemarket

18. Sustaining innovation
is drivenby existing
market demand
But it can
ultimately fail
the company

19. Disruptive innovation
is an unproven
opportunity
But it can be the
future of the
company

20. This is the core of
the innovator’sdilemma

21. Why didJohn’s company, themarket
leader, miss the opportunity for the
disruptive innovation?

22. Let’s findout what happened to
John’s company

23. John had many ideas for new products and
improvements

24. With the marketing department, the project team
gathered feedback from their lead customers and
didthe market analysis

25. They chose the best project for the product or
improvement their leader customers want
Bigmarketsize
Bestprofitmargin
Customervalidation
best
project

26. They dideverything right

27. Meanwhile, the competitor withdisruptive
innovation …

28. Their product was not valued by main
stream market,but they found a niche
market by trial and error

29. As their product improving,the competitor
managed to growtheniche market and
encroach the customer base of John’s company

30. John’s company belatedly jumped on the
bandwagon todefend customer base

31. However,inthe newly developed market,
John’s company hadn’t developed any
competitiveadvantage and they are too late

32. In thehistory, thesame story happened to
many great companies

33. They failedbecause the very
management practices that
made them market leader
also make itextremely
difficultfor them to develop
the disruptive innovation

34. To understand thedifficulties, weneed to
firstly understand theconcept of Value
Network

35. The context within whicha organization
is established to get what itvalues
Value Network
revenuefrom
Theleadcustomers
Fora established
company,thisisthe
valuetheyareafter

36. The highest performing company hasa well-developed system
tailoredtocapture thevalue fromitsleadcustomers
Structure Capability
Operation
Culture
Partnership Management Theleadcustomers
Valuenetwork

37. Withina valuenetwork, the systemanditspast
choices of markets,determines itsperceptions of the
valueof aninnovation

38. It drives resource allocation towards sustaining
innovation that isvalued by the current lead customers
Funding
Manpower

39. And, it isextremely difficultto keep resources fora
disruptive innovation fora unproven market
? Funding
Manpower

40. Thispatternof resource allocationaccountsfor the well-run
companies’ leadershipinthe sustaininginnovationandtheir
dismalperformance inthe disruptiveone
sustaininginnovation disruptiveinnovation

41. If we can turn the time backwards, can John’s
company do something different to better
manage the disruptive innovation?

42. There are fiveprinciples of
disruptive innovation

43. The managers can harness these
principleto their advantage

44. 1Customers effectively control the patterns of
resource allocation in well-runcompanies
Lead
customers
Well-run
company

45. Lead
customers
Well-run
company
Aspin-off
organization
niche
market
Giveresponsibility for disruptiveinnovation to
organizations whose customers need them
disruptive
innovation

46. 2Small markets don’t solve the growthneeds of
largecompanies
Large
company
Largerandlarger
andlarger

47. Place disruptiveinnovation projects inorganizations
small enough toget excited about small market
Small
organization
disruptive
innovation
Small
market
Thisis good
enoughforme

48. 3Markets of disruptive innovation may not exist
and can’t beanalyzed
Dothesebeforeyou
talktomeagain

49. Plan tofail early and inexpensively in thesearch
for the market for disruptive innovation

50. 4The existing process and values define the
organizations’ disabilities when confronted
withdisruption

51. Utilizetheresources of themainstream
organizationto address disruption, but not its
processes and values
Idon’tneedaoiltruck,but
Ineedthepetrolinitstank

52. 5Technology supply may not equal market
demand Itis notgood enough,Let’s
improve its technology
When disruptive
innovation is presented
Establishedfirms takeitas
a technicalchallenge

53. Disruptive innovation isa marketing challenge
When disruptive
innovation is presented
Disruption companytakeit
as a marketingchallenge
Itisn’tvaluedbymainstream,
Let’sfindpeople who likeit

54. Hi,John. Couldyou please giveus a
summary?

55. Hi,John. Couldyou please giveus a
summary?
OK!

56. Why great company can fail
Thebusiness existsinavaluenetwork
thatshapes leaders’decisions. It could
blindthemtothe disruptiveinnovation
andlosethefuture opportunity

57. To manage thedisruptive innovation
1. Haveaspin-off
2. Matchitssize withitsmarket
3. Plantofailure
4. Use theresourceonly
5. It isamarketingchallenge

58. Although John’s company failed,he is
not such aperson whogivesup easily.

59. Hejoins a start-up witha disruptive
innovation

60. In aniche market, they don’t need toworry
too muchabout their larger competitors

61. This givesthem moretime tofinetune
their technology and develop afuture
mass market

62. Likemany other start-ups and
entrepreneurs, they will
surprise the much larger
competitors indifference

63. More presentationsat
www.innodiary.org