Last week, I read "The Innovator's Dilemma."
It's about why successful companies cannot catch up with new innovation.
The main thesis is that a company always needs to create new customers from new technology.
It is unique that he uses a lot of actual examples of the hard disk industry, the excavator industry,
the steel industry and so on to reveal how successful companies lost their outstanding ranking.
According to the author, the better management executives are, the more probable their companies fail
to catch up with the new technology.
He refers to such a new technology as "disruptive technology", because it creates new customers and new markets. It consists of three elements: cheep, plain, and the function not for mainstream customers.
When it comes to disruptive technology, it is fetal to enter the market of this technology. It is too late to
wait for this emerging market to enlarge enough.
However, excellent firms tend to overlook this opportunity though they have sufficient or much better
technology compared with start-ups.
Mainly, there are two reasons.
They're said from the point of view of consultants and of investment bankers.
Firstly, successful companies are inclined to listen to their main customers too carefully.
It is widely believed thought especially in terms of marketing consultants,
but it makes managers blind about step out to create new customers.
They keep inventing additional functions just for their mainstream customers.
The author calls this kind of network as Value Network.
Secondly, the pressure from investors forces managers to concentrate on only big and profitable markets.
This is because they need to retain their growth rate of sales or income to satisfy investors.
However, it makes it hard for them to try new market even if sometimes followed by failure.
At first, the market of disruptive technology is unknown to anybody and it is usually small.
Then, what do they do to keep up with disruptive innovation?
The author introduced RPV model.
RPV represents Resource, Process and Value.
Resource: Human resource, funding resource
Process: How to make a decision
Value: New value network
Then the author says it is appropriate to make suitable organization whose RPV is fitted to the disruptive technology market.
It is paradoxical and interesting.
Especially, I think it is objective that the author just observes a lot of cases of HD companies
and analyze it in a scientific way.
However, in terms of actual strategy, it seems far-fetched because he thinks just in his mind and
he does not introduce other point of view such as engineers, sales person or usual office workers.
Maybe he could not push his boundaries of top-down management of the US.