Reminder From The Innovator's Dilemma: Markets Change Whether You Like It Or Not
from the deny-at-your-own-risk dept
The management trap of disruptive technology is insidious because, like all good traps, it doesn't look like one at first. It looks prudent and fits a corporate culture of conservative, data-driven management. But incumbents can't recommend change because it would mean recommending something less profitable, less accepted, and less proven than what they're already doing.This is the key point, and while I'm not going to talk about what that post is actually discussing (the failure of some companies to be able to innovate due to this issue), I am going to use it to try to make a particular point, and hopefully clear up a misperception. There are two points that we're often trying to make around here, and the problem is that those two points often get conflated.
And that's the trap.
Disruptors have no such inhibitions.
- What's happening in the market is going to happen anyway.
- The end result will actually be better for everyone, which is why it's important to embrace the innovation
But, the second point is also important. Historically, pretty much every disruptive innovation has followed Christensen's curve, meaning that the eventual outcome really is a better overall solution for the market, and thus makes the market much bigger, even if it doesn't look that way at first. But, the problem is that it's difficult to see that. So, when we get industry defenders (whether it's the recording industry, the movie industry, the newspaper industry or others) insisting that it doesn't make sense to jump off that cliff and embrace these new offerings, because the market just isn't big enough (or, as short-sighted Hollywood execs have taken to saying: "turning analog dollars into digital dimes"), we note that they're absolutely making the management trap described above.
They're refusing to make the leap because of a misunderstanding of both of those points -- but they're often focusing too much on arguing against point two, that they ignore point one. If you want to believe that point two isn't true, that's fine (even if you turn out to be wrong). That doesn't excuse not being able to respond to point one. If you really think that the market is turning into digital dimes, you at least need to do something about point 1: what are you going to do about it. Because, for the most part, it seems like those legacy industry's aren't doing a hell of a lot, other than complaining about what's happening, and then confusing that with point number 2.
They're refusing to do anything because they think that the new market is too small -- not realizing that the existing market is going to zero anyway. So even if you believe that the new market isn't going to be as big (on which point you're almost certainly wrong), you're making a mistake in thinking you can just do nothing. What's happening is you're comparing the new market to the old market -- which no longer exists.