Sunday, June 18, 2017

Incremental Disruption

Technology disruption is a double-edged sword.  Companies need to continue to evolve otherwise they will become irrelevant and left behind.  However, companies need to be careful about chasing the next best thing.  People can take the innovators dilemma to heart without understanding that like other books it is writing for a specific aspect given the time period it is reviewing.

Comparing the innovators dilemma examples to the time period shows that the innovators dilemma selected companies that would benefit the statements.  According to the New Yorker, Seagate didn’t feel impact of technology disruption.  In contrast Seagate survived and actually doubled sales when a large number of potential “disrupters” entered the market.  These new entrants didn’t survive and Seagate is still a major seller of disk drives.

There are other examples from the book that when reviewing in more details, the technology isn’t as disruptive as it is made out to be and instead majority of the companies referenced made incremental improvements that allowed the companies to maintain their market dominance.
The author of the innovators dilemma also started their own stock fund in an effort to show his theories could be utilized to buy stocks that are considered disruptors.  The fund didn’t last a year before it was liquidated.

Technology disruption is key for organizations to stay current and stay ahead of new entrants, however they need to be cautious and not buy into technology hype if it is not in their company’s best interests.  Companies need to continually look to evolve and adapt to new technology and listening to their customers is a major advantage.  Their customers have their ear to the market that will help their companies evolve, so suppliers need to continue to listen and adapt their company’s strategy as needed. They need to do this cautiously with incremental improvements and not bet the entire company without understanding the risks/rewards for the strategy change that is being proposed.

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