Last Thursday I spoke with the board of NPR about what I had learned from 10 months of conversation with hundreds of people in Public Radio.
On eof my points that I made was that the new had to be carefully nurtured and that the old would do its best to kill it. As I was questioned about this statement, I cited Claton Christenson's advice. In the interests of more clarity - here is a summary of his key learning.Solving the Innovator's Dilemma.
Identification of these disruptive technologies can be a daunting mission because, as Christensen states, “markets that do not exist cannot be analyzed." One cannot predict what the market or probability of success will be for these emerging technologies.
Therefore, managers need to engage in discovery-driven planning, in which they operate on the assumption that new markets can not be analyzed and instead rely on learning by doing and real-time adjustment of strategy and planning.
The key obstacle to success with this approach is the stigma of failure in many firms. In trying to solve the Innovator’s Dilemma, managers should leave room for failure in their planning, and be willing to invest in what may be a potentially disruptive technology. This requires that the firm itself be willing to leave room from failure, and should failure occur, wrap the lessons from the experience back into the firm as preparation for the next opportunity.
Even after correctly identifying potentially disruptive technologies, firms still must circumvent its hierarchy and bureaucracy that can stifle the free pursuit of creative ideas.
Christensen suggests that firms need to provide experimental groups within the company a freer rein. “With a few exceptions, the only instances in which mainstream firms have successfully established a timely position in a disruptive technology were those in which the firms’ managers set up an autonomous organization charged with building a new and independent business around the disruptive technology.”
This autonomous organization will then be able to choose the customers it answers to, choose how much profit it needs to make, and how to run its business.
Furthermore, the firm must quickly develop the new technology to compete with smaller, more mobile firms while maintaining its core business.
Finally, even if engineers successfully develop a working product, they must find an appropriate market to target, a difficult task given the unpredictable nature of markets. In short, there are many variables involved in solving the Innovator’s Dilemma with few lifelines along the way.
"Discovering markets for emerging technologies inherently involves failure, and most individual decision makers find it very difficult to risk backing a project that might fail because the market is not there." -Clayton Christensen, The Innovator's Dilemma.
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