The development of the modern business raises a number of difficulties because the development of the modern society and technologies contributes to consistent changes and business has to adapt to the changing environment. In this respect, companies should focus on the development and introduction of innovations, which can facilitate their business development and put them into an advantageous position in the market. At this point, it is possible to refer to Christensen’s The Innovator’s Dilemma, which reveals the complexity of the development of the modern business and introduction of innovations in organizations.
At this point, it is worth mentioning the fact that one interesting concept is that organizations can be held captive by their best customers. By focusing on exploiting and serving those customers, organizations can miss opportunities to jump into the next big thing. The customer is not always right – the trick is to know when to stick close to their needs and when to jump ahead of them. (Christensen, 3-4, 19). In such a way, companies should introduce innovations and attract customers. In this regard, successful organizations operate within “value networks” – the larger market context within which they operate and use their internal resources to provide value to their customers. It’s often new entrants to a market that are best able to transform those value networks with disruptive technologies. (Christensen, 36, 61-63).
In such a situation, managers have the most incentive to back projects within the existing value network. Sound, tactical managerial decisions can be at the root of failure (Christensen, 94-5, 108). Managers should develop and introduce innovations taking into consideration the existing facilities and capabilities of the organization. In this regard, the established organizations can take advantage of disruptive technologies, but initially the cost structures and revenue streams mean it’ll be best to spin off those units into independent organizations (Christensen, 127, 132). In such a way, companies should be very careful, while introducing innovations and adapting them to their organizational structure and internal business operations.
In such a situation, modern companies have to match the size of the organization to the size of the market. Leadership in disruptive technologies is what creates value & opportunities (Christensen, 138, 142, 158). Companies should develop innovations and adapt them to needs of customers to improve their organizational performance. At the same time, Christensen argues that markets that do not exist cannot be analysed. In other words, the potential for disruptive technologies cannot be evaluated and assessed in the same way as for sustaining technologies in already established markets (Christensen, 165). Therefore, companies should conduct the detailed marketing analysis before introduction of innovations. Otherwise, innovations may fail to bring positive results to companies.
At the same time, Christensen argues that exploiting potentially disruptive technologies is more likely to lead to failure and miscalculation than sustaining technologies. It is usually necessary to act before careful plans are made to be able to seize the opportunity. There is a huge first-mover advantage (Christensen, 180, 182). In such a situation, the “killer app” of a disruptive technologies is not always immediately obvious — either to the organization developing or to the early adopter customers who start using it (Christensen, 182). The introduction of efficient technologies is essential and companies should be very careful while introducing new technologies.
In fact, new technologies should contribute to the improvement of internal processes that favour sustaining technologies are hard to change, both because the organization is structured to favour the existing and because there will be resistance to changing what is perceived as not being broken (Christensen, 201). Moreover, taking advantage of a disruptive technology isn’t so much about the technology itself as how the market for it is developed, built and exploited. It’s about where the customers’ needs intersect what the technology can do (Christensen, 220-21, 230). In such a way, companies can benefit from the introduction of new technologies and gain a competitive advantage in the market.
In such a context, a serious question arises. In fact, the big question is, of course, how do you tell if a technology is disruptive rather than just interesting but not very useful? First, it can be useful to watch how customers actually use a product rather than how they say they might use it or rely on how you think they should use it. You also need to judge whether or not the product will one day move from a niche market to a mass market. This often means finding the market where the product really belongs, learning from how the customers use the product (Christensen, 236-42). Companies should develop introductions and improve their organizational performance. On the other hand, the introduction of innovations may raise a number of problems but companies should come prepared to the introduction of innovations.
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that the introduction of innovations may be effective but needs an effective strategy that can facilitate the introduction of innovations and maximize their effectiveness.
Christensen, Clayton. The Innovator’s Dilemma. Harper Paperbacks, 2006.
Peters, T. J. In search of excellence: Lessons from America’s best-run companies. New York: Harper & Row, 2007.
Schein, E. H. Organizational culture and leadership. San Francisco: Jossey-Bass, 1999.