El Dilema del Innovador http://www.resumido.com/es/libro.

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EDITORIAL Harvard Business School Press
AÑO PUBLICACION 1997
PÁGINAS 225
The Innovator's Dilemma When New Technologies Cause Great Firms to Fail

By Clayton M. Christensen

Christensen describe en este libro el resultado de su estudio: por qué empresas buenas
perdían su dominio de mercado aún cuando seguían buenas prácticas de negocios -
escuchaban a sus clientes y se enfocaban en sus productos más rentables.

Irónicamente estas buenas prácticas de negocios, que normalmente mejoran los productos
y servicios, llevaron a que las empresas no respondieran ante nuevos productos y
tecnologías. La razón: las nuevas tecnologías disruptivas, que requieren cambios radicales
en producción y mercadeo, y que aún no han encontrado un mercado.

Así, mientras el mercado crece, para el momento en que estas compañías respondan, ya es
muy tarde para beneficiarse - las empresas más pequeñas han respondido primero y han
tomado el liderazgo.

Si las empresas entienden el problema, pueden lidiar con las nuevas tecnologías de forma
productiva. Por ejemplo, pueden establecer empresas aparte (spin-offs) para moverse
dentro de nuevos mercados.

Un dilema que ocurre en todas las industrias

En todo tipo de industrias, las buenas empresas fallan en mantener su participación de mercado, ya que los
mercados y las tecnologías cambian. Le sucede a cualquiera, no importa si las industrias cambian rápida o
lentamente, en cuál tecnología se basan, o si son manufactureras o de servicios.

Las empresas buenas y bien manejadas declinan en muchos campos diferentes. Ejemplos:

1. Sears: fue una vez líder del mercado en ventas al por menor y era considerada una empresa muy bien
administrada. Perdió su posición en el mercado cuando no respondió al aumento de descuentos en
ventas al por menor y tiendas del hogar.

2. IBM: fue una vez la empresa dominante en Mainframes, perdió su posición cuando respondió
lentamente al crecimiento de las minicomputadoras.

Otros ejemplos en tecnología incluyen a Xerox, Apple y Digital Equipment. Sin embargo, este patrón de
respuesta lenta y declive puede ser visto en muchos otros campos.

El patrón descrito ocurre por la diferencia entre la tecnología sustentada y la disruptiva.

Una tecnología sustentada mejora el desempeño del producto o servicio mediante pasos sostenidos y cambios
incrementales.

Por el contrario, la introducción y mercadeo de una tecnología disruptiva requiere un cambio radical. Las
tecnologías de este tipo alteran la relación de una compañía con sus clientes y proveedores, perturban los
arreglos financieros que las empresas han logrado para apoyar su actual mercado y tecnología. Es natural
resistir a tales cambios.

Las tecnologías disruptivas tienen varias desventajas:

 1. A corto plazo, adoptar una tecnología de este tipo resultará en un producto de peor desempeño, no
mejor.

2. Atraen a un mercado mucho más pequeño, hasta que éstas sean ampliamente aceptadas.

3. Ofrecen menos ganancias ya que son más baratas, pequeñas, simples y fáciles de usar.

Por ejemplo, Honda y Yamaha fueron las pioneras en las motos tipo scooter. Harley-Davidson y BMW,
quienes fabricaban motos poderosas, subestimaron a las motoscooters; de este modo estas marcas perdieron su
oportunidad de crecer en un nuevo e importante mercado.

Es racional favorecer las tecnologías sustentadas

Otra barrera para la pronta implementación de una tecnología disruptiva es que su desempeño será incierto,
como con cualquier cosa nueva y no completamente desarrollada. Inicialmente, la base de clientes para el
nuevo producto puede ser pequeña y el producto puede ser muy costoso. El hecho de que estos productos puede
que no se vendan bien al principio hace que las grandes compañías se interesen aún menos en estos. Pero
conforme las nuevas tecnologías mejoran, sus costos caen y los clientes descubren nuevos usos para estos – en
consecuencia, su valor aumenta.

Las empresas que sólo se han enfocado en mejorar sus tecnologías sostenidas de pronto tienen nuevos
competidores - nuevos rivales que ya han desarrollado el conocimiento y los sistemas de mercadeo para
competir en el nuevo y creciente mercado.

Es racional que las grandes empresas que se resistan a adoptar tecnologías disruptivas, ya que inicialmente
estas tecnologías son menos rentables y menos atractivas para el consumidor. Pero esta estrategia facilita el
camino para que la participación de mercado decline mientras que las nuevas tecnologías ganan rentabilidad,
atracción del consumidor y dominio. Una vez que los gerentes están conscientes de estas dinámicas, pueden
aprender a aprovecharlas en vez de rechazarlas. En lugar de pelear contra las tecnologías disruptivas, pueden
prepararse para un futuro de gran éxito.

Las empresas de alto desempeño utilizan sistemas para eliminar las ideas que los consumidores no quieren.
Estas empresas utilizan encuestas y análisis financieros de los nuevos productos, pero algunas veces puede que
sea necesario no escuchar a los deseos inmediatos de los consumidores sino anticipar sus necesidades futuras.

Establezca un negocio independiente

La forma más efectiva de establecer una presencia en los nuevos mercados es creando una organización
autónoma, un negocio nuevo e independiente, que explote la nueva tecnología y desarrolle nuevos clientes en
torno a ella.

Los esfuerzos para nutrir estas nuevas tecnologías dentro de una gran compañía están generalmente condenados
- las presiones institucionales desalientan sus desarrollos.

Establezca una empresa separada lo mas temprano posible, puesto que las tecnologías disruptivas
generalmente abren una puerta para nuevos mercados y desarrollos - las empresas que entran pronto tienen una
clara ventaja.

La estrategia que muchas grandes empresas utilizan, esperar hasta que estos nuevos mercados sean
suficientemente grandes, por lo general no es exitosa - la demora pronostica un futuro declive en el negocio
tradicional cuando la nueva tecnología despega.
Caso de estudio: La industria del Disk Drive
La industria del Disk Drive (Unidad de disco) fue moldeada por cambios rápidos en la tecnología, estructura de
mercado y distribución.

Los primeros drives, desarrollados por la IBM entre 1952 y 1956, eran del tamaño de grandes refrigeradores.
Consistían de 50 discos de 24 pulgadas, cada un podía almacenar hasta cinco megabytes de información.

Los drives se volvieron rápidamente más pequeños y más poderosos. Para 1980, el drive de ocho pulgadas se
había vuelto el estándar micro-computador. Ese año, Seagate Technology introdujo el disk drive de 5.25
pulgadas. Los fabricantes establecidos de drives de 8 pulgadas se resistieron a éste nuevo formato, permitiendo
así que Seagate se volviera el líder del mercado.

En 1984, cuando nuevos competidores empezaron a producir el disk drive, el estándar actual, de 3.5 pulgadas,
Seagate se opuso - no se reajustó a la tecnología disruptiva. ¿Por qué? Porque el mercado inicial para su disk
drive de 5.25 era más grande y podía leer más megabytes que el nuevo más pequeño. Pero con el tiempo, la
tecnología del drive de 3.5 pulgadas mejoró y su mercado creció; las otras firmas tomaron el liderazgo y
Seagate fue eclipsada.

Redes de valor
Toda empresa es parte de una “red de valor”, red que provee el contexto en el cual la compañía “identifica y
responde a las necesidades de los clientes, resuelve problemas, proporciona insumos, reacciona a competidores
y lucha por las ganancias”. En otras palabras, cada empresa forma parte de una “red de productores y
mercados” a través de la cual hace y distribuye sus productos.

En la red de valor de los disk drives, la producción de un disco depende de la arquitectura del disk drive en el
que será usado; el cual a su vez depende de la arquitectura de la computadora; y la computadora depende de la
arquitectura del sistema de información utilizado.

Mientras operan juntos, otros sistemas de proveedores y distribuidores están haciendo y distribuyendo los
mismos productos. Estos sistemas, mutuamente dependientes, hacen que sea difícil para una empresa cambiarse
a una tecnología disruptiva. Un cambio en un componente afectaría toda la red de valor.

El desafío es complicado por los costos: dentro del sistema interdependiente, buscar la manera de mejorar la
tecnología ya existente cuesta menos que cambiar a un nuevo sistema. Por otro lado, las nuevas empresas más
pequeñas que apenas entran en el nuevo mercado no tienen este tipo de costos o restricciones - están en una
mejor posición para explotar las tecnologías disruptivas.

Usted no tiene chance cuando llega tarde

Inicialmente, las empresas establecidas no ven el desarrollo de las nuevas empresas como una amenaza, ya que
los nuevos mercados son muy pequeños. Pero conforme estos mercados crecen y la tecnología mejora, los
consumidores comienzan a cambiarse y abandonan su compromiso con la vieja tecnología. Posteriormente,
aceptar la tecnología disruptiva se hace no sólo deseable, sino en algunos casos, necesario para sobrevivir.

Para el momento que esto ocurre, las firmas emergentes están ya establecidas en la red de valor que rodea a la
nueva tecnología; los sucesores son usualmente excluidos y no pueden ganar una participación significativa en
el mercado.

Otros casos de estudio

El proceso descrito ocurrió en muchas industrias; algunos ejemplos:

Excavación: en la industria de excavación mecánica, una nueva tecnología, la excavación hidráulica, fue
introducida entre 1947 y 1965. Para ese entonces, los fabricantes de palas mecánicas usaban una tecnología
basada en cables. Las empresas estables se resistieron a la nueva tecnología. Dos docenas de nuevas empresas
introdujeron productos con la nueva tecnología y llegaron a dominar el mercado. El antiguo líder del mercado
anterior - Bucryus Erie - terminó por caerse.

Acero: Un proceso similar ocurrió en la industria integrada de acero a mediados de los sesenta, cuando la
fabricación mediante minimills (minifábricas o molinillos) se hizo comercialmente viable. Empresas como
Nucor Steel, lograron producir acero tipo Molten a partir de pedazos de desecho en forma mucho mas efectiva
que las grandes fábricas de acero integradas. Las grandes compañías como U.S. Steel y Bethlehem Steel,
dueñas de las fábricas de acero integradas - no construían fábricas con nueva tecnología porque sus recursos
estaban invertidos en la vieja tecnología. Como resultado, por los años ochenta, sus fábricas integradas fueron
sacadas del mercado y Nucor Steel tomó el liderazgo.

Ventas al detal: las tiendas de descuento se apropiaron del mercado de ventas al detal, arrebatando
participación a las tiendas tradicionales y a las tiendas de variedad. Las viejas empresas ofrecían servicio a altos
precios, mientras que las nuevas ofrecían menos servicio a menor precio - esa era su tecnología disruptiva. En
este caso, S.S. Kresge, la segunda cadena de tiendas de variedad más grande del mundo, compitió exitosamente
creando una empresa aparte llamada K-mart, la cual se volvió una tienda de descuento muy exitosa.

Las lecciones
Estos ejemplos de declive y surgimiento nos enseñan una lección: las empresas deben ser capaces de responder
ante las tecnologías disruptivas - deben tomar los pasos necesarios para anticipar los desarrollos tecnológicos.

Los gerentes o dueños de compañías, deben darse cuenta que a veces son presionados para no incursionar
tecnologías disruptivas, ya que después de todo, las empresas exitosas quieren que sus recursos se enfoquen en
“actividades dirigidas a las necesidades de los consumidores, que prometen ganancias más altas, que son
tecnológicamente posibles, y que las ayudan a competir en los mercados sustanciales”.

De esta forma, para aceptar y nutrir estas tecnologías, en las etapas de inicio, usted luchará contra creencias
fundamentales y sostenidas durante mucho tiempo acerca de cómo las organizaciones deberían funcionar para
tener éxito. Esto desafía las medidas generales de cómo evaluar el desempeño.

Algunos principios que usted tendrá que combatir incluyen:

1. Hacer caso a lo que los consumidores desean, en cuanto a cómo utilizar sus recursos.

2. Los pequeños mercados no son importantes.

3. Usted no conoce de antemano sobre los últimos usos o aplicaciones de las tecnologías disruptivas.

4. Puede que no haya suficiente demanda para la nueva tecnología.

Todos estos principios son ciertos; motivo por el cual mejorar la tecnología sostenida parece costo-efectiva y
popular con los clientes. Sin embargo, preste atención al potencial futuro de la nueva tecnología para atraer una
nueva y creciente base de consumidores. Si usted tiene que entrar en un campo emergente, hágalo pronto.

Las grandes empresas que utilizaron las tecnologías disruptivas siguieron estos cuatro pasos esenciales:

1. Asigne el trabajo de desarrollo y comercialización de las nuevas tecnologías a una empresa que esté
 interesada en hacerlo. Puede adquirir, por ejemplo, una empresa pequeña que esté comenzando en el
nuevo campo.

2. Asigne el proyecto en una organización “suficientemente pequeña como para entusiasmarse con
pequeñas oportunidades y triunfos”. De hecho, su empresa podría establecer una pequeña unidad de
trabajo interna o una empresa pequeña separada para que explore las opciones.

3. Reconozca la posibilidad de fracaso. Esté preparado para “fallar pronto y de una forma poco costosa”
a lo largo de repetidas pruebas de ensayo y error, mientras busca un mercado para estas nuevas
tecnologías.

4. Busque maneras de identificar o desarrollar nuevos mercados que valoren los productos basados en
estas tecnologías disruptivas.

Resumen ejecutivo de La solución del innovador

En su aclamado libro “El dilema del innovador”, Christensen explicaba cómo los
líderes de una industria son cegados por innovaciones disruptivas, ya que se
enfocan demasiado en sus clientes más rentables. Ahora, se ocupa de mostrar como
las empresas pueden llegar al lado opuesto del dilema - crear disrupciones, en lugar
de ser destruidas por ellas.

Introducir innovaciones disruptivas constituye el modo más eficaz de mantener el

crecimiento de una organización. Sin embargo, buena parte de las empresas no
consigue tales resultados porque ni sus estructuras organizacionales ni el segmento
del mercado que suelen considerar más rentable responden a la innovación de un
modo deseable.

Así pues, es preciso que las compañías entiendan la naturaleza de los fenómenos y
procesos ligados a la innovación, y que aprendan tanto a identificar como a aplicar
el potencial disruptivo de las ideas innovadoras, cualquiera sea su origen en la
empresa.

Los autores presentan nueve preguntas fundamentales, relacionadas con el tema de

la innovación, que debe formular y responder cualquier organización resuelta a
crecer de un modo rentable a través del tiempo. Asimismo, presentan un esquema
general que deben seguir los innovadores al momento de plantear la creación de un
nuevo negocio.

Las 9 preguntas de la solución del innovador

 Hay nueve decisiones importantes que los gerentes deben tomar para generar crecimiento exitosamente.

Cómo derrotar a nuestros más poderosos competidores y sacarles ventaja?

Es posible dividir la innovación en dos categorías:

1. Innovaciones sostenidas: productos que se van mejorando con el tiempo para satisfacer las
demandas de los clientes de alta categoría dispuestos a pagar más por un mejor producto.

2. Innovaciones disruptivas: productos que no son tan buenos como los que ya están disponibles,
pero que ofrecen otros beneficios (simplicidad, conveniencia, más barato) y que llaman la atención
de nuevos clientes.

En términos generales, el líder del mercado prevalecerá mientras se introduzcan “innovaciones sostenidas”.
Pero en circunstancias disruptivas, el líder siempre será superado por los nuevos participantes del mercado,
puesto que su modelo de negocios cobra un mayor sentido.

Para determinar si una idea es o no [...]

El patrón de la innovación
Independientemente de cuál sea la tendencia industrial o comercial, la innovación de productos
disruptivos sigue un patrón consistente. Con el fin de desarrollar sus propias soluciones al dilema del
innovador, y propiciar el crecimiento:

1. Busque un producto que sea disruptivo: [...]

Disruptive technology From Wikipedia, the free encyclopedia

 Types of Innovation[1]

Sustaining
Revolutionary or discontinuous
An innovation that creates a new market by allowing customers to solve a
problem in a radically new way. (E.g., the automobile)
Evolutionary
An innovation that improves a product in an existing market in ways that
customers are expecting. (E.g., fuel injection)
Disruptive
An innovation that creates a new (and unexpected) market by applying a
different set of values. (E.g., the lower priced Ford Model T)

A disruptive innovation is an innovation that disrupts an existing market. The term is used in
business and technology literature to describe innovations that improve a product or service in
ways that the market does not expect, typically by lowering price or designing for a different set
of consumers.

In contrast to "disruptive" innovation, a "sustaining" innovation does not have an effect on

existing markets. Sustaining innovations may be either "discontinuous"[1] (i.e.
"transformational") or "continuous" (i.e. "evolutionary"). Transformational innovations are not
always disruptive. Although the automobile was a transformational innovation, it was not a
disruptive innovation, because early automobiles were expensive luxury items that did not
disrupt the market for horse-drawn vehicles. The market for transportation essentially remained
intact until the debut of the lower priced Ford Model T in 1908 by making higher speed,
motorized transportation available to the masses.[2]

• History and usage of the term

The term disruptive technologies was coined by Clayton M. Christensen and introduced in his 1995 article
Disruptive Technologies: Catching the Wave[3], which he co-wrote with Joseph Bower. The article is aimed at
managing executives who make the funding/purchasing decisions in companies rather than the research
community. He describes the term further in his book The Innovator's Dilemma. (1997) In his sequel, The
Innovator's Solution, (2003) Christensen replaced disruptive technology with the term disruptive innovation
because he recognized that few technologies are intrinsically disruptive or sustaining in character. It is the strategy
or business model that the technology enables that creates the disruptive impact. The concept of disruptive
technology continues a long tradition of the identification of radical technical change in the study of innovation by
economists, and the development of tools for its management at a firm or policy level. However, Christensen's
evolution from a technological focus to a business modelling focus is central to understanding the evolution of
business at the market or industry level. For example, Christensen's contemporary emphasis on the applied business
model rather than the technology itself was developed by Henry Chesbrough's pioneering notion of Open
Innovation.

The theory
Christensen defines a disruptive innovation as a product or service designed for a new set of customers.

"Generally, disruptive innovations were technologically straightforward, consisting of off-the-shelf components put
together in a product architecture that was often simpler than prior approaches. They offered less of what customers
in established markets wanted and so could rarely be initially employed there. They offered a different package of
attributes valued only in emerging markets remote from, and unimportant to, the mainstream."[4]
Christensen argues that disruptive innovations can hurt successful, well managed companies that are responsive to
their customers and have excellent research and development. These companies tend to ignore the markets most
susceptible to disruptive innovations, because the markets have very tight profit margins and are too small to
represent significant growth.[5]

How low-end disruption occurs over time.

Christensen distinguishes between "low-end disruption" which targets customers who do not need the full
performance valued by customers at the high end of the market and "new-market disruption" which targets
customers who have needs that were previously unserved by existing incumbents.[6]

"Low-end disruption" occurs when the rate at which products improve exceeds the rate at which customers can
adopt the new performance. Therefore, at some point the performance of the product overshoots the needs of
certain customer segments. At this point, a disruptive technology may enter the market and provide a product
which has lower performance than the incumbent but which exceeds the requirements of certain segments, thereby
gaining a foothold in the market.

In low-end disruption, the disruptor is focused initially on serving the least profitable customer, who is happy with
a good enough product. This type of customer is not willing to pay premium for enhancements in product
functionality. Once the disruptor has gained foot hold in this customer segment, it seeks to improve its profit
margin. To get higher profit margins, the disruptor needs to enter the segment where the customer is willing to pay
a little more for higher quality. To ensure this quality in its product, the disruptor needs to innovate. The incumbent
will not do much to retain its share in a not so profitable segment, and will move up-market and focus on its more
attractive customers. After a number of such encounters, the incumbent is squeezed into smaller markets than it
was previously serving. And then finally the disruptive technology meets the demands of the most profitable
segment and drives the established company out of the market.

"New market disruption" occurs when a product fits a new or emerging market segment that is not being served by
existing incumbents in the industry. The Linux operating system (OS) when introduced was inferior in performance
to other server operating systems like Unix and Windows NT. But the Linux OS is inexpensive compared to other
server operating systems. After years of improvements Linux is now installed in 87.8% of the worlds 500 fastest
supercomputers.[7]

Examples of disruptive innovations

Innovation Disrupted market Notes
With the advent of podcasting, broadcast radio and television have seen a decline in
their listeners/viewers. Broadcasting companies have had to look for innovative ways to
Podcasting Broadcast Radio & TV
"time-shift" their content so that consumers can watch or view media when an where
they desire.
8 inch hard disk The hard disk drive market has had unusually large changes in market share over the
14 inch hard disk drive
drive past fifty years. According to Clayton M. Christensen's research, the cause of this
5.25 inch hard instability was a repeating pattern of disruptive innovations.[8] For example, in 1981,
8 inch hard disk drive 8 inch drives (used in mini computers) were "vastly superior" to 5.25 inch drives (used
disk drive
in desktop computers).[4] However, 8 inch drives were not affordable for the new
desktop machines. The simple 5.25 inch drive, assembled from technologically inferior
3.5 inch hard disk "off-the-shelf" components,[4] was an "innovation" only in the sense that it was new.
5.25 inch hard disk drive However, as this market grew and the drives improved, the companies that
drive
manufactured them eventually triumphed while many of the existing manufacturers of
eight inch drives fell behind.[8]
 In the 1990s, the music industry phased out the single. This left consumers with no
means to purchase individual songs. This market was filled by peer-to-peer file sharing
Downloadable
CDs, DVDs technologies, which were initially free, and then by online retailers such as the iTunes
Digital Media
music store and Amazon.com. This low end disruption eventually undermined the sales
of physical, high-cost CDs.[9]
Hydraulic excavators were clearly innovative at the time of introduction but they gain
Hydraulic Cable-operated
widespread use only decades after. However, cable-operated excavators are still used
excavators excavators
in some cases, mainly for large excavations.[10]
vertically integrated steel By using mostly locally available scrap and power sources these mills can be cost
Mini steel mills
mills effective even though not large.[11]
Minicomputers Mainframes Minicomputers were originally presented as an inexpensive alternative to mainframes
and mainframe manufacturers did not consider them a serious threat in their market.
Minicomputers, Eventually, the market for minicomputers became much larger than the market for
Personal Workstations. Word mainframes. Similarly, the market for main frames and mini-computers was seriously
computers processors, Lisp disrupted by personal computers. Although they were not at all competitive at the time
machines of their introduction in the 1970s, by the mid 1980s they had improved exponentially
and could compete directly with the more expensive machines.[citation needed]
Early desktop-publishing systems could not match high-end professional systems in
Desktop either features or quality. Nevertheless, they lowered the cost of entry to the publishing
Traditional publishing
publishing business, and economies of scale eventually enabled them to match, and then
surpass, the functionality of the older dedicated publishing systems.[citation needed]
Offset printing has a high overhead cost, but very low unit cost compared to computer
printers, and superior quality. But as printers, especially laser printers, have improved
Computer printers Offset printing
in speed and quality, they have become increasingly useful for creating documents in
limited issues.[citation needed]
Early digital cameras suffered from low picture quality and resolution and long shutter
lag. Quality and resolution are no longer major issues and shutter lag is much less than
it used to be. The convenience of small memory cards and portable hard drives that
Originally, instant
hold hundreds or thousands of pictures, as well as the lack of the need to develop
Digital photography, now
these pictures, also helped. Digital cameras have a high power consumption (but
photography increasingly all chemical
several lightweight battery packs can provide enough power for thousands of pictures).
photography
Cameras for classic photography are stand-alone devices. In the same manner, high-
resolution digital video recording has replaced film stock, except for high-budget motion
pictures.[citation needed]
When first introduced, high speed CMOS sensors were less sensitive, had lower
resolution, and cameras based on them had less duration (record time). The advantage
High speed of rapid setup time, editing in the camera, and nearly-instantaneous review quickly
CMOS video Photographic film eliminated 16 mm high speed film systems. CMOS-based cameras also require less
sensors power (single phase 110 V AC and a few amps for CMOS, vs. 240 V single- or three-
phase at 20-50 A for film cameras). Continuing advances have overtaken 35 mm film
and are challenging 70 mm film applications.[citation needed]
The first steamships were deployed on inland waters where sailing ships were less
Steamships Sailing ships effective, instead of on the higher profit margin seagoing routes. Hence steamships
originally only competed in traditional shipping lines' "worst" markets.[citation needed]
When Western Union infamously declined to purchase Alexander Graham Bell's
telephone patents for $100,000, their highest-profit market was long-distance
Telephones Telegraphy telegraphy. Telephones were only useful for very local calls. Short-distance telegraphy
barely existed as a market segment, which explains Western Union's decision.[citation
needed]

At the beginning of the 20th century, rail (including streetcars) was the fastest and most
cost-efficient means of land transportation for goods and passengers in industrialized
countries. The first cars, buses and trucks were used for local transportation in
suburban areas, where they often replaced streetcars and industrial tracks. As
highways expanded, medium- and later long-distance transports were relocated to road
traffic, and some railways closed down. As rail traffic has a lower ton-kilometer cost,
Automobiles Rail transport
but a higher investment and operating cost than road traffic, rail is still preferred for
large-scale bulk cargo (such as minerals). Since rail has always been faster than
contemporary road vehicles[citation needed], it is viable for passengers in populated regions
like Western Europe, south and east Asia and the Northeast Corridor. When urban
density increases, rail systems often become more attractive and make a comeback.
[citation needed]

The Concorde aircraft has so far been the only supersonic airliner in extensive
commercial traffic. However, it catered to a small customer segment, which could later
Private jet Supersonic transport afford small private sub-sonic jets. The loss of speed was compensated by flexibility.
Supersonic flight is also banned above inhabited land, due to sonic booms. The
Concorde service was withdrawn in 2003.[citation needed]
Bakelite and other early plastics had very limited use - their main advantages were
electric insulation and low cost. New forms had advantages such as transparency,
Plastic Metal, wood, glass etc
elasticity and combustibility. In the early 21st century, plastics can be used for nearly all
household items previously made of metal, wood and glass.[citation needed]
Light-emitting Light bulbs A LED is significantly smaller and less power-consuming than a light bulb. The first
diodes optical LEDs were weak, and only useful as indicator lights. Later models could be
used for indoor lighting, and future ones will probably be strong enough to serve as
 street lights. Classical light bulbs for lower light indoor use remain, possible mainly
because of sentimental and aesthetic value, although some lamps using other
technologies have designs resembling light bulbs. Incandescent light bulbs are being
phased out in many countries.[citation needed]
Synthesizers were initially low-cost, low-weight alternatives to electronic organs and
Electronic organ and
Digital synthesizer acoustic pianos. Today's synthesizers feature many automated functions and have
piano
replaced them for home and hobby users.[citation needed]
Mobile Discount / No Frills Operators (MDOs aka. MVNOs) first focused on a low-
distribution-cost-through-internet sales model. In later times, innovations like low-priced
Mobile Discount mobile-internet tariffs were brought to market. This tripped the development of a new
Mobile Telephony
Operators discount category in the market which was later entered by the large discount retail
chains with own branded offerings leveraging their distribution power in the lower tier of
the market.[citation needed]
The first liquid crystal displays (LCD) were monochromatic and had low resolution.
They were used in watches and other handheld devices, but during the early 2000s
these (and other planar technologies) largely replaced the dominant cathode ray tube
LCD CRT
(CRT) technology for computer displays and television sets, although CRT
technologies have improved with advances like true-flat panels and digital controls only
recently.[citation needed]
Facit AB used to dominate the European market for calculators, but did not adapt
Digital calculator Mechanical calculator
digital technology, and failed to compete with digital competitors. [12]

Business implications
Disruptive technologies are not always disruptive to customers, and often take a long time before they
are significantly disruptive to established companies. They are often difficult to recognize. Indeed, as
Christensen points out and studies have shown, it is often entirely rational for incumbent companies to
ignore disruptive innovations, since they compare so badly with existing technologies or products, and
the deceptively small market available for a disruptive innovation is often very small compared to the
market for the established technology.

Even if a disruptive innovation is recognized, existing businesses are often reluctant to take advantage of
it, since it would involve competing with their existing (and more profitable) technological approach.
Christensen recommends that existing firms watch for these innovations, invest in small firms that might
adopt these innovations, and continue to push technological demands in their core market so that
performance stays above what disruptive technologies can achieve.

Disruptive technologies, too, can be subtly disruptive, rather than prominently so. Examples include
digital photography (the sharp decline in consumer demand for common 35 mm print film has had a
deleterious effect on free-riders such as slide and infrared film stocks, which are now more expensive to
produce) and IP/Internet telephony, where the replacement technology does not, and sometimes cannot
practically replace all of the non-obvious attributes of the older system (sustained operation through
municipal power outages, national security priority access, the higher degree of obviousness that the
service may be life-safety critical or deserving of higher restoration priority in catastrophes, etc).

http://www.ucalgary.ca/iejll/angus

Review Essay--The Innovator's Dilemma: When New Technologies

Cause Great Firms to Fail by Clayton M. Christensen., 3(25)
Catherine L. Angus angus@wmc.ca

Western Management Consultants

Christensen, Clayton M., The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. (Book).
Harvard Business School Press, 1997, 225 pages, $43.95 (Cdn.) ISBN 0875845851

This book presents a somewhat radical proposition by suggesting that well managed and successful companies are
failing because of the things they are doing right in confronting new markets and technological change. The author,
Clayton M. Christensen, considers the possible explanation that these failing firms, although as well run as one
could expect, may be faulted in their method of decision-making, thus resulting in their eventual demise. In
assessing this proposition as it applies to a corporation, a parallel can be made to an educational environment. The
question that must be asked is whether schools are also failing because of the decisions they are making with
regard to technology adoption?

Christensen's radical stance suggests that because firms choose to listen to their customers' demands, to invest
aggressively in new technologies, to carefully study market trends and to systematically allocate investment capital
that promises the best return, they lose their position of leadership. Is this plausible?

On a superficial level, the business community would aggressively argue against Christensen's view since current
business theory suggests that the customer is "king", and all decision-making should be aimed at meeting the
customers' needs. On a deeper level, Christensen counters this argument by suggesting that the customer does not
always know what he / she wants or needs, and therefore it is the responsibility of the organization to pursue the
development of new technologies (disruptive technologies) that will meet their needs, and the needs of others, in the
future.

Christensen defends his argument by identifying two types of technologies, sustaining and disruptive, both of which
can impact on a company's success. Sustaining technologies are new technologies that companies adopt to
improve product performance. These are characterized as tools that serve to improve the performance of
established products, which mainstream customers in major markets value. One cannot dispute the value of
sustaining technologies, given that they meet the customers' needs, increase revenue and improve customer loyalty.
However, the purpose of new technology is to create business opportunity, not to improve the level of automation of
existing products, services and processes. Technologies which serve to create business opportunity are described
as disruptive technologies.

Disruptive technologies emerge less frequently, and they are recognized as tools that result in worse product
performance in the short-term, but ultimately bring more value to the customer and the market in the long-term.
Disruptive technologies, however, are difficult to embrace given that they are first commercialized in emerging or
insignificant markets, and typically are not (at least, initially) desired by a firm's most profitable customers. A
disruptive technology is embraced initially by the least profitable customer in a market-the innovator. This makes it
highly unlikely that companies focusing on high return products and high customer value will invest in disruptive
technologies that may be value-added in the future. Nonetheless, the notion of the disruptive technology suggests
that firms must be willing to take the risk of pursuing breakthrough innovations in order to gain strategic dominance
in fast moving industries and markets.

Christensen suggests that the pursuit of short-term objectives at the expense of more strategic and forward thinking
long-term objectives results in a company losing the competitive advantage. Though simple in principle, the practice
of pursuing more long-term objectives for future competitive advantage is quite difficult to adopt because it requires
a higher degree of risk tolerance than most firms feel comfortable with.

Does it make sense that firms present a low risk tolerance in the pursuit of new technologies? With companies like
Microsoft, Intel, Apple and multiple Silicon Valley start-ups making the headlines due to their successful pursuit of
new technologies, it would seem to make sense that companies that are innovative and pioneer new technologies
will pave the path to corporate success. However, many companies will continue to be risk adverse when it comes to
Information Technology (IT), especially when Canadian research shows 30% of all IT projects in Canada fail (Anne
McKague, 1998). These failures include projects that are cancelled or run grossly over budget. Inevitably, it is the
research and development technologies (or disruptive technologies) that present more risk. Without the ability to
project market acceptance for these technologies, or to even identify which market should receive these
technologies, it becomes increasingly difficult to gain senior management support for an innovative project. As well,
difficulty arises in planning and budgeting for these projects given the amount of uncertainty surrounding their ability
to help companies increase profitability.

Given this high failure rate with IT projects, one must question which firms will be willing to keep up with the fast rate
of technological change and invest in disruptive technologies. In the past, firms have been focused on pursuing IT
projects that lower costs, which has made it more challenging for firms to be forward looking and focus on
innovations that will be long-term revenue generators. This can be partially explained by the fact that the ultimate
uses for disruptive technologies cannot be known in advance, as well as the fact that with disruptive technologies,
small markets don't solve the growth needs of large, established companies.

With the existence of these challenges, how do firms manage to harness the value of investing in disruptive
technologies? Christensen recommends a series of four key strategies in order to enable a successful pursuit of
innovation in new technology:

1. Small sub-organizations should be given the autonomy to pilot disruptive technologies, rather than focusing the
entire organization's efforts on new and uncertain projects.
2. Disruptive technologies should be matched with a customer base that wants them (no matter how small).
Aligning disruptive innovation with the "right" customer, enables increased customer demand, eliciting resource
allocation to the product.
3. Companies should plan to fail early and inexpensively in the search for a market for disruptive technologies
4. Companies look for new markets to adopt a disruptive technology, rather than trying to fit the disruptive
technology into the sustaining technology market.

In assessing the set of rules or strategies Christensen suggests for capitalizing on the phenomenon of disruptive
innovation, one must question whether it is feasible for organizations to act outside the traditional model of listening
to customers, pursuing large markets, and investing exclusively in high performance / high margin products. I
believe Christensen is asking for management teams to shift their paradigm of success to a more strategic and long-
term focus, rather than operating based on an operational and short-term focus.

Achieving this end depends on the vision of leaders in an organization. Will the leaders in a company be proactive
rather than reactive to innovation? Will they search out opportunities and take responsibility for the investment, and
challenge it along the way? With the pace of change in technology, speeding along faster than anyone can plan for
it, companies need to create alignment between their vision for the future and their short-term decision-making
processes. This alignment process applies equally to corporations as well as educational institutions. I believe
Christensen has laid out a suitable framework to follow in an effort to catch the wave of innovation. The critical
variable, however, in successfully implementing this framework is establishing buy-in for the vision across the
organization. The success of a new strategy as radical as the one suggested by Christensen is dependent upon the
individuals within the organization internalizing and promoting this new vision.

From an educational perspective, how is the pursuit of innovative technology successfully implemented in schools
where barriers exist such as restrained budgets, resistance to change among staff, and a low tolerance for risk?
Given that the critical variable in successfully executing Christensen's framework is buy-in, how is this generated
within the schools? How can proactive technology leaders have an impact in their schools? Should their efforts to
generate buy-in be targeted at the teaching staff or the administration? How can the trend of low risk tolerance and
resistance to change be reversed to promote new vision within a school?

The need to develop buy-in and promote a new technology vision in a school may require leadership from "within"
rather than leadership from "above." Because schools often rely on the principal and administration to spearhead
new initiatives and directions of growth, the opportunity for innovative technology may be limited if the administrators
are not technology-focused. With the technology experts advancing from within the ranks, a new method of
promoting organizational change must be pursued. Stakeholders must be willing to adapt to change, buy-in to new
initiatives and be willing to adopt a new vision for innovative technology in the classroom.

References

Christensen, Clayton M. (1997). The Innovator's Dilemma: When New Technologies Cause Great Firms
to Fail. Harvard Business School Press.

McKague, Anne. (1998, December). Commentary - Results of studies are in and the results are all bad.
Computing Canada.