Is Technology Disruption due to bad management?

Blockbuster and Kodak are the classic examples of companies displaced by Disruptive Technology.

In many cases, you hear that the reason for this are bad management.

 "They were arrogant,"

"They couldn't keep up with the new technology,"

 "They weren't aware of the competition"

 "They ignored the new technology."

 "Just plain old bad management."

 It's QUITE THE OPPOSITE

 In the book classic, The Innovator's Dilemma, Clayton Christensen (Professor at Harvard) demonstrated that, while some of these statements may have been partially true, companies can get displaced when Disruptive Technology solves a problem for a portion of the market that they are not servicing, and then the company with the disruptive technology is able to enter and take over the larger market.

In many cases, the disruptive technology actually originates or at least is present in the larger, original company! As an example, Kodak had digital cameras.

So what happens?

According to Christensen, many of the companies that are displaced are actually demonstrating good management, by staying close to their customer base and continuing to innovate for those very customers!

The problem is that their customers support their margins, so they MUST continue to support those customers.

The customers that THEY serve, don't want the new technology - yet.

This leaves the door open for start ups to FIND markets with other customers.

And that's the Dilemma. If you follow classic good management by listening to and supporting your current customers, you may face the brunt of disruptive technology displacement in the future. 

So how do you overcome this? 

Christensen suggested a number of strategies, which I'll highlight in an upcoming post.

In the meantime, highly recommend this book!

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