Book Reviews

The Innovator's Dilemma: 
When New Technologies Cause Great Firms To Fail

Clayton M. Christensen
Harvard Business School Press, $27.50 (available in paperback)

One of our members brought this book to the roundtable meeting in Colorado Springs. He held it up and said: "This is a good book, I recommend it." He then talked about the disk drive industry and its development of miniaturization. He passed the book around and everyone had a look.

Well, I looked at it and decided to get a copy. I read it. This is my recommendation: Read this book! The disk drive industry is only a vehicle to illustrate the author's analysis of how great companies, well entrenched in an industry, managed by well trained, well motivated, intelligent managers can fail miserably when faced with a certain type of new technology.
Do you know the difference between sustaining technology and disruptive technology? No? Well you ought to. It's in the introduction, and it's an eye opener.

Do you know what a value network is? No? Well you ought to. It's the subject of chapter two. Do you know what the technology "S" curve looks like? That's in chapter two also. If this seems a bit heavy and overly complex for you, go read a comic book; this is a serious scholarly treatment of corporate failure. But if you're serious about being an entrepreneur, read and digest this book.

A few topics I found compelling:

How the earthmoving equipment industry went from cables, pulleys, and clutches (steam shovels) to hydraulics (backhoes and front-end loaders), and almost all of the industry leaders fell by the wayside. Why? as the author explains (convincingly) because they listened to their customers! Don't believe it? Read chapter three.

How Bethlehem Steel and U.S. Steel missed the boat when mini-mills came into existence. And when they (Bethlehem and U.S.S) did start building mini-mills, they were too late! They took a bath in red ink! The mini-mills had taken all of their best customers.

Why did Sears, Woolworth, and Montgomery Ward lose out to Wal-Mart, Target and K-Mart? The old-timers put too much emphasis on profit percentage and not enough on inventory turns. The discounters take a smaller percentage of a larger gross and not only capture market share, they increase the bottom line! This discussion is in chapter five.

Is it better to be first in a market with new technology, or is it better to be second or third and work for a competitive advantage? It depends on whether it's a sustaining technology or a disruptive technology. See chapter seven.

The author relates how Honda broke into the automobile market with an inferior product (at the beginning) and is now challenging the upscale Cadillac and Lincoln for dominance in the luxury car market, how IBM survived the desktop computer revolution by spinning off a separate division with a different culture�and a different customer base. How Hewlett Packard let the laserjet cannibalize its ink-jet business,�and survived!

Chapter ten is the best one: a summary of the findings with recommendations by the author. It is well researched, intelligently presented, and very persuasive! You must Read this book!!!

F.O. (Frank) Armbruster

Please help us out by writing a brief review of one of the above books or another that you think would be of benefit to inventors, also let the webmaster know if there is a book review that should be updated or fixed (i.e. typos, etc.). 


More Book Reviews:

The Innovator's Dilemma: 
When New Technologies Cause Great Firms To Fail

Bringing Your Product to Market
by Don Debelak

Html 4 For the World Wide Web
by Elizabeth Castro

Patent It Yourself
by David Pressman

Inventions and Patents
by Steve Barbarich 

The 22 Immutable Laws of Marketing
by Al Ries & Jack Trout

Stand Alone Inventor!
by Robert G. Merrick

Will It Sell?
by James E. White