Summary

The Innovator’s Dilemma by Clayton M. Christensen explains why successful companies often fail despite excellent management. Established firms excel at ‘sustaining innovations’-incremental improvements requested by current customers-but they are structurally unable to pursue ‘disruptive technologies.’ These disruptive innovations often perform worse initially according to traditional metrics but introduce new attributes like simplicity and affordability. They find success in niche markets that incumbents ignore. By the time the disruptive technology improves enough to meet mainstream needs, the incumbent is entrenched in outdated processes and values, making reaction too late. To survive, companies must create autonomous organizations with the right processes to nurture these small markets.