59 pages • 1 hour read
Clayton M. ChristensenThe Innovator's Dilemma: When New Technologies Cause Great Firms to Fail
Nonfiction | Book | Adult | Published in 1997A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Key Figures
Clayton M. Christensen
Clayton M. Christensen is the author of The Innovator’s Dilemma. He distilled the book’s relevant concepts from research that he conducted as a doctoral student at Harvard Business School in the early 1990s. Before beginning his doctoral research, Christensen worked as a strategist for Boston Consulting Group, one of the world’s most successful management consulting firms. He also founded an advanced-materials technology firm with laboratory researchers from the Massachusetts Institute of Technology. Before penning The Innovators Dilemma, Christensen first published many of his ideas in a 1995 article in the Harvard Business Review. The article is entitled “Disruptive Technologies: Catching the Wave.”
Christensen’s doctoral research led to his installment in the Harvard Business School faculty. As a full professor, he taught courses on enterprise building and business transformation while also contributing to Harvard’s executive education offerings. He continued his entrepreneurial work as the founder of the management consulting firm Innosight LLC and two investment firms. One of them, Rose Park Advisors LLC, utilized his research insights in their investment strategy.
In 2011, Forbes hailed Christensen as one of the most influential thinkers in business theory. He also ranked multiple times on the Thinkers50 Innovation Award, which is given biannually to prominent management theorists around the world. The Innovator’s Dilemma continues to be credited as a groundbreaking text in management, having popularized the concept of disruptive innovation. Following the book’s publication in 1997, Christensen wrote further books elaborating on his ideas, such as The Innovator’s Solution: Creating and Sustaining Successful Growth (2003) and Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns (2008). His other books, such as The Innovator’s Prescription: A Disruptive Solution for Health Care (2009) investigate systemic issues in social industries. Christensen passed away in January 2020 at the age of 67.
The Disk Drive Industry
The disk drive industry is the primary subject of the research that informs Christensen’s book. Disk drives function as components in computers, which is why the customers of this industry were usually made up of manufacturing companies like IBM. In Chapter 1, Christensen explains that he examines the disk drive industry because the rapid pace of change in market hierarchy makes it the perfect venue for observing patterns of change and organizational behavior. Using his study of disk drive firms, Christensen distinguishes between two types of technology: sustaining innovations and disruptive technology.
The disk drive industry is marked by the recurring dichotomy of two general forces—the established firms that have been instrumental in ushering the commercialization of disk drive technology and the entrant firms that challenge established firms with disruptive technologies. This dichotomy is recurring, because after the first market upheaval caused by the introduction of the 5.25-inch drive, the established firms are replaced by the entrant firms, who in turn become the new market leaders. Occupying the same position, they become the established firms for another generation of entrant firms that work to leverage 3.5-inch disk drive products.
The common element that Christensen observes among the various iterations of established firms is that once they become market leaders, they all prioritize the development of innovations that sustain the improvement of their own products. Once they become performance-competitive, their passive approach to innovation hinders them from defending themselves against the entrant firms. Upon comparing the full range of disk drive companies between 1976 and 1993, Christensen found that the subset of companies that commercialized disruptive products far exceeded the subset of companies that were participating in established markets. Throughout the rest of the text, the concepts of established firms and entrant firms become helpful keywords for describing companies that experience upheavals in other industries.
The Automotive Industry
The automotive industry is a secondary subject in Christensen’s book, and it broadly includes any company that produces automated vehicles. This industry is initially discussed in Chapter 7 in the context of Honda’s entry into the North American market. Christensen’s discussion of Honda’s impact on the motorcycle sector proves to be especially relevant to the central ideas of the book, as the company’s decisions demonstrate a concrete example in which an entrant firm (Honda) creates a new value network that the established firms (Harley-Davidson and BMW) are unable to breach.
However, the more significant discussion of the automotive industry comes in Chapter 10, when Christensen decides to apply the overarching framework of his book to the automobile segment of the industry. Specifically, he explores the question of whether the electric vehicle can qualify as a disruptive technology, analyzing the threat it poses to the dominant firms that manufacture gasoline-powered vehicles. This is a helpful case study that consolidates the insights from the previous 10 chapters. Christensen methodically assesses the technology according to the criteria outlined in the first part of the book and uses his own suggestions in the second part to develop and commercialize the technology as a product. He also identifies potential value networks within the industry, thoughtfully discussing their needs and the possible trajectories of performance by which the product may be measured. In doing so, he shows that his theory of disruptive innovation is externally valid and is applicable to contexts beyond the one in which he discovered it.
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