The book “The Innovator’s Dilemma” written by the famous American management scientist Clayton Christensen is part of his series of works (“The Innovator’s Gene”, “Dilemmas and Solutions”, “The Innovator’s Answer”, “The Innovator’s Prescription”, etc.), and also the most speculative one in his series.
The topics, analytical ideas, and explained phenomena covered in this book not only provide operational guidance to management practitioners, but also provide subtle inspiration for in-depth thinking to theoretical researchers.
A key theme of the book is that the same management practices that propel companies to become mainstream market leaders are also the same management practices that cause them to miss out on the opportunities presented by disruptive technologies. That is, well-managed businesses fail precisely because they are well-managed. This unavoidable contradiction and unavoidable dilemma is actually a true portrayal of management reality. The author takes this fact as the research object and discusses the rights and wrongs, causes and consequences, showing a profound theoretical foundation and practical experience.
First of all, the practical significance of this theme is clear and real, because every manager engaged in management practice activities is in a state of anxiety almost every day, and the focus of anxiety is mostly about how to avoid being attacked at any time. new products and new technologies. Therefore, the speed of new technology and new product development, investment in R&D funds, and whether it has the most cutting-edge R&D personnel… have become important indicators to measure the level of an enterprise. Through careful elaboration, the author enlightens practical managers who are experiencing anxiety that management reality has the following basic characteristics, and you should understand and be clear about your own situation. First, technology is divided into two types, sustaining technology and destructive technology. The so-called sustaining technology and destructive technology are compared with the original mainstream technology of the industry. Sustaining technology is a technical path that continues the mainstream technology in the industry, while destructive technology takes a technical path that is different from the mainstream technology in the industry. Second, disruptive technologies usually start from the low end. When they first appear, they are not as good as mainstream technologies in the industry in some major performance aspects, but they are more cost-effective and can satisfy some consumers who do not have high performance requirements. At the same time, they are destructive. The early appeals of technology developers are limited. Even if it is only a narrow market and a small return, it can inspire great entrepreneurial enthusiasm, which lays the foundation for subsequent improvements in product performance, product quality, and technical level. Third, in contrast, the excitement of innovation in large companies (referred to as mainstream companies in the book) is more focused on sustainable technologies on the mainstream technology track. At the same time, mainstream technologies and products that have only a small market are not mainstream. Enterprises usually have varying degrees of contempt from top to bottom (management to technical levels), which is the so-called arrogance of bureaucratic organizations.
When the author presents the above-mentioned management reality through conceptual analysis and case verification, I believe that every business management practitioner in an objective situation will have more or less experience with such issues, and thus have feelings that touch themselves. associations and insinuations. Then the question arises, why is this so? What are the mechanisms and internal logic behind it? For mainstream companies, dimensionality reduction is such an easy task, but why are so few companies implementing it? Answering these questions naturally involves the theoretical contribution of the book.
The correct approach is to depend on the time
The theoretical contribution of “The Innovator’s Dilemma” is that it proposes important concepts such as sustainable innovation, destructive innovation, S-shaped curve, value network, and institutional capability framework (RPV, Resource-Procedure-Value). These concepts are proposed in sequence. , which helps clarify the issue of why mainstream companies are disrupted by disruptive innovative companies. Among them, the most important part involves the two concepts of “value network” and “institutional capabilities”, and these two concepts represent the internal and external levels of the enterprise respectively.
First, from the external level of the enterprise, it proposes and explains the intrinsic relationship between the value network and mainstream enterprises that may be subverted.
This is also what the author considers to be an important innovation of the book, because it proposes this concept on the basis of comparing previous theories, and the objects it compares with – theories from an organizational perspective and theories from a capability perspective, both belong to Business interior concept. While acknowledging the value and contribution of the above theory, the author believes that it does not involve a broader perspective, so he proposes the concept of value network from the perspective of corporate ecology.
As for why mainstream companies fail, the theoretical explanation from an organizational perspective is: the organizational structure of the company can usually promote innovation at the component level, because most product R&D institutions are composed of product component R&D teams. When the basic structure of the product remains unchanged, This is a structural system that has proven effective, but when the basic structure of the product changes fundamentally, this structural system becomes an obstacle to innovation. This is called organizational inertia. The theoretical explanation from the capability perspective is: Enterprises generally build the technical capabilities of a certain product based on experience and levels. Regarding the technical problems that should be solved and avoided, the historical choices of the enterprise determine the types of skills and knowledge it has accumulated. When When the best solution to a problem requires knowledge that is significantly different from the company’s accumulated experience, the company is likely to fail.
Clayton Christensen admits that there is profound truth in the above explanation, but combined with the relationship between technological changes and changes in market structure, he believes that the more essential reason lies in the value network. The so-called value network refers to the mutual relationships formed by relevant stakeholders (customers, products, technologies and organizations). Today’s enterprises, without exception, are in the value network, also known as being in a large organizational ecology. According to the concept of ecology, the behavioral choices of biological species in the ecosystem depend more on the behavior of other species. Choose behavior. Mainstream companies tend to engage in sustainable technological innovation. Rather than saying that mainstream companies have innate advantages in these technologies and can easily achieve results, it is better to say that mainstream companies have to consider the relationship between other stakeholders in the value network and sustainable technological innovation. relation. Moreover, the longer a mainstream enterprise exists and the larger the scale of the enterprise, the denser and more compact its value network will inevitably be, making it an inseparable whole from the value network. Therefore, its possibilities to turn to the development of disruptive technologies are deeply limited by the already structured system. For example, customers’ usage habits, suppliers’ ability and willingness to provide accessory support, cooperation and connection of assistive technologies, understanding and support of internal employees, etc. It can be said that the existence of the value network restricts the enthusiasm and possibility of mainstream enterprises in adopting disruptive technologies, making them more inclined to adopt sustainable technologies, and may eventually be adopted as destructive technologies as the industry develops. Disrupted by new companies in technology.
Second, from the internal level of the enterprise, it proposes and explains the internal relationship between the institutional capability framework of Resource-Procedure-Value (RPV) and the possible subversion of mainstream enterprises.
The author explains that an organization’s capabilities are affected by three factors: resources, processes, and values. Resources include people, equipment, technology, product design, branding, information, cash, and relationships with suppliers, distributors, and customers. Resources are only the basic conditions for institutional capabilities. The process of converting institutional capabilities into value-added products and services is ultimately determined by processes and values. Process refers to the mode of interaction, coordination, communication and decision-making adopted by people in the process from resource investment to product and service transformation. Process includes the entire process of enterprise value creation activities. Processes are built to allow employees to continuously complete tasks repeatedly, which implies that the mechanisms used by organizations to create value are inherently resistant to change. Corporate values refer to the standards by which employees make priority decisions. For a large enterprise, a key measure of good management is whether such clear, unified values are pervasive throughout the organization. In short, once an institutional capability based on resources, processes, and values is formed, it is extremely difficult to change it. Especially when this internalized institutional capability becomes part of the organizational culture, change is extremely difficult.
So far, the author has presented readers with an irreversible fate of mainstream enterprises: the objective pressure from the external value network and the subjective will of internal institutional capabilities will eventually make mainstream enterprises incapable of defeating destructive innovations, even if they are not mainstream. of new ventures.
At first glance, this is a book about how mainstream companies deal with the challenges of disruptive innovation. Through a series of real business cases and rational academic analysis, the author not only depicts how seamlessly mainstream companies carry out management activities, It is impeccable, but ends up in the funny situation of being subverted by destructive technology innovators and leading to failure. Moreover, the author also gives some countermeasures and suggestions on how some mainstream companies can avoid such a situation. After reading this book, those management practitioners who are facing the challenge of being chased and are anxious, if they really regard the author’s suggestions as a treasure and adopt them, new problems may arise. This is where the speculative nature of the book lies.
The so-called “dilemma” is actually a state and scene from which we cannot move forward, retreat, and cannot get rid of. Therefore, there is no so-called coping strategy, only current choices based on the actual situation. The author carefully describes the objective existence of real enterprises to illustrate the dilemma that management activities can never escape. The correct approach of all enterprises depends on the environment at that time. This is the unique heterogeneous characteristic of management activities and the best illustration of the integration of science and artistry in management.
In the last part of the book (Chapter 11), the author summarizes the central idea and essential points, and clearly expresses the true intention of writing the book with the finishing touch. “Some exceptionally successful companies have failed because some very capable managers used the best management techniques, but companies should not fail just because these management techniques were incapable of dealing with the threats posed by disruptive technologies. And give up the capabilities, organizational structures and decision-making processes that once made them shine in the mainstream market. Most of the innovation challenges faced by enterprises are sustaining innovations in nature, and to deal with such innovation challenges is to cultivate these innovations. The original intention of capabilities. Managers of these companies simply need to realize that these capabilities, culture and methods are only valuable under certain conditions.”