The_Innovators_Dilemma__Clayton

sets built with vacuum tubes) to volume-oriented, low-overhead discount retailers. Honda’s disruptive
motorbikes were rejected by mainstream motorcycle dealers, forcing the company to create a new
channel among sporting goods retailers. We saw, in fact, that a major reason why Harley-Davidson’s
small-bike initiative failed is that its dealers rejected it: The image and economics of the small Italian
bikes Harley had acquired did not fit its dealer network.
The reason disruptive technologies and new distribution channels frequently go hand-in-hand is, in
fact, an economic one. Retailers and distributors tend to have very clear formulas for making money, as
the histories of Kresge and Woolworth in chapter 4 showed. Some make money by selling low volumes
of big-ticket products at high margins; others make money by selling large volumes at razor-thin
margins that cover minimal operating overheads; still others make their money servicing products
already sold. Just as disruptive technologies don’t fit the models of established firms for improving
profits, they often don’t fit the models of their distributors, either.
My electric vehicle program would, therefore, have as a basic strategic premise the need to find or
create new distribution channels for electric vehicles. Unless proven otherwise, I’d bet that mainstream
dealers of gasoline-powered automobiles would not view the sorts of disruptive electric vehicles we
have in mind as critical to their success.
WHAT ORGANIZATION BEST SERVES DISRUPTIVE INNOVATIONS?
After identifying the electric vehicle as a potentially disruptive technology; setting realistic bearings for
finding its potential markets; and establishing strategic parameters for the product’s design, technology,
and distribution network, as program manager I would next turn to organization. Creating an
organizational context in which this effort can prosper will be crucial, because rational resource
allocation processes in established companies consistently deny disruptive technologies the resources
they need to survive, regardless of the commitment senior management may ostensibly have made to
the program.
Spinning Off an Independent Organization
As we saw in the discussion of resource dependence in chapter 5, established firms that successfully
built a strong market position in a disruptive technology were those that spun off from the mainstream
company an independent, autonomously operated organization. Quantum, Control Data, IBM’s PC
Division, Allen Bradley, and Hewlett-Packard’s desk-jet initiative all succeeded because they created
organizations whose survival was predicated upon successful commercialization of the disruptive
technology: These firms embedded a dedicated organization squarely within the emerging value
network.
As program manager, therefore, I would strongly urge corporate management to create an independent
organization to commercialize electric vehicle technology, either an autonomous business unit, such as
GM’s Saturn Division or the IBM PC Division, or an independent company whose stock is largely
owned by the corporation. In an independent organization, my best employees would be able to focus
on electric vehicles without being repeatedly withdrawn from the project to solve pressing problems for
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