The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

Part 2 shows how companies have historically embraced new management paradigms to harness disruptive innovation. Christensen reiterates the five general insights that he previously discussed in the Introduction to the book. He reminds readers that customers influence resource allocation, that large companies cannot find growth solutions in small markets, and that disruptive innovation applications are inherently unpredictable. Additionally, he reviews the idea that organizational capabilities are defined by the companies’ processes and values, and that technology supply will not always meet a market’s performance requirements.

Christensen briefly explains how managers have leveraged these insights in the context of disruptive technology. For resource dependence and small-market growth, managers commercialize the technology in an organization that meets relevant customer needs and is sized to benefit from small-market opportunities. For application unpredictability, such managers accepted failure as a given and planned around this inevitability to minimize its expense impact. For organizational capability, they leveraged a portion of their resources toward a subsidiary whose processes and values could better harness the disruptive technology.