Disruptive Innovation



how do disruptive technologies cause market leaders to fail even when they seem to do everything right everybody knows why badly managed businesses fail but what's more interesting is how companies like Kodak are Nortel Networks seem to do everything right and still didn't survive in the 1990s professor Clayton Christensen from the Harvard Business School put forward a theory of disruptive technology to explain this in every market there is a trajectory of performance improvement that customers are able to make use of but where this trajectory lies is different from one customer to the next some customers can be satisfied with very basic levels of performance some others are very demanding and will only feel satisfied by very high levels of performance from a technology disruptive technologies enter the market offering very low performance but their performance steadily improves so in the early days of a disruptive technology the new innovation is considered to be not good enough by most of the market but it seems perfectly acceptable to those customers that never really asked for more this small group of customers might be attracted by the fact that this barely good enough technology is less expensive or offers them a bit of new functionality that the old technology simply didn't provide the problems often begin for industry incumbents when they are first assessing a potentially disruptive innovation entering their sector the company's biggest customers are telling it at that point that the new technology simply doesn't meet their needs so they apply the usual business logic and very rationally conclude that they should stick with the technology that they already have but here's the thing the new technology that started out as low quality still gets adopted in an undemanding corner of the market and steadily improves until it is good enough to meet the performance expectations of even the most demanding customers by this time however it's usually too late for the incumbent to do much about it because they fail to develop the required capabilities and linkages to leverage the new technology Christensen frequently uses the advent of the word processor as an example many people who use them in the 1980s probably remember being frustrated by the fact that the computer sometimes straw to keep up with your fingers as you were typing demanding customers like professional secretaries would have been horrified by the new technology and a typewriter company would have rationally listened to these customers and decided that they should continue to stay focused on improving typewriters despite their imperfect performance however these early word processors had tremendous appeal for one group of customers people who didn't type very well and who loved being able to easily fix their mistakes this group was willing to forgive the lack of speed in exchange for this new functionality but as computers got better and faster word processors steadily improved until even the fastest most demanding typist were satisfied with the new technology now think about technologies that are unfolding their disruptive potential right now like 3d printing at the moment 3d printers for home use produce relatively low resolution fused deposition modeling compound artifacts but give it a few years and think about the number of objects you would love to print lost a rook in a chess game forgot a present it's 10:00 p.m. and the shops are closed when affordable 3d printing can service more sophisticated ends of the market retail manufacturing and logistics won't be the same anymore one of the interesting things about disruptive innovations is that they tend to have almost nothing to do with how radical the new technology is instead what makes a technology disruptive is the fact that it isn't sustaining which basically means that it isn't based on the same markets and value networks as what's already available in that regard the emergence of disruptive innovations is really almost as much of a management phenomenon as it is about the technology in and of itself disruptive innovations get a lot of attention of the business press because of the seismic shifts that they can deliver it in industries in this way disruptive innovations are sometimes a force for renewal in the marketplace and while they are responsible for failures of large companies every one of these fatalities in the business world tends to be a new entrepreneurs success story you

15 Comments

  1. Deependra Patel said:

    This is among the best video explaining Disruption , after Mr. Clayton's own talks, on Youtube.

    May 23, 2019
    Reply
  2. StoryShots Read Bestsellers in Minutes. For FREE. said:

    This is very well-done. Do you have any plans for any more animations like this?

    May 23, 2019
    Reply
  3. Saeeda Dilawar said:

    Thank u❤️

    May 23, 2019
    Reply
  4. Steven Sherman said:

    Tesla.
    Can’t wait until that is the new example of disruptive innovation. We’re not far from it!

    May 23, 2019
    Reply
  5. Some Curiosities said:

    He's dead Jim..?

    May 23, 2019
    Reply
  6. Eric M said:

    so like the steemit blockchain platform and its built on apps like Dtube and Dlive disrupting the YouTube/reddit/Facebook model

    May 23, 2019
    Reply
  7. Tasri Jatnika said:

    simple, clear, its really help…thanks for shared

    May 23, 2019
    Reply
  8. serenesista said:

    The boss looking from the window made me sad.

    May 23, 2019
    Reply
  9. Kedrick Mushayuma said:

    Very helpful, thank you

    May 23, 2019
    Reply
  10. Hussain Dashti said:

    Good presentation

    May 23, 2019
    Reply
  11. throwmain said:

    Hello! Have you considered – Zammu Amazing Cash Crop (should be on google have a look)? Ive heard some great things about it and my father got cool results with it.

    May 23, 2019
    Reply
  12. Shine Gopal said:

    nice video

    May 23, 2019
    Reply
  13. Luke Doody said:

    Great video, very helpful!

    May 23, 2019
    Reply
  14. In Between Time said:

    so helpful! thank you

    May 23, 2019
    Reply
  15. Elías Manuel Sánchez Castañeda said:

    “Summary: Disruptive Innovation: Why market leaders fail. In this animated video Prof. Robert Perrons explains Prof. Clayton Christensen´s Theory of Disruptive Technologies an d how such phenomena can cause market leaders to fail (even when they seem to do everything rigth).”
    Some people may think that the "Disruptive Innovation" is an issue that must be alert to prevent companies as in the case of Kodak and other companies, they were taken off the market. But it is not so, if for example if you were the best operator in the world, when telephone operators needed to make long distance calls, and you realized that was developing a technology that would replace you surely could have done something to make this "Innovation disruptive "wont take you by surprise.

    May 23, 2019
    Reply

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