The_Innovators_Dilemma__Clayton

We need a strong motivation to accelerate through the trials and errors inherent in cultivating a new
market.
Of course, the danger in making this unequivocal call for spinning out an independent company is that
some managers might apply this remedy indiscriminately, viewing skunkworks and spinoffs as a
blanket solution—an industrial-strength aspirin that cures all sorts of problems. In reality, spinning out
is an appropriate step only when confronting disruptive innovation. The evidence is very strong that
large, mainstream organizations can be extremely creative in developing and implementing sustaining
innovations. 21 In other words, the degree of disruptiveness inherent in an innovation provides a fairly
clear indication of when a mainstream organization might be capable of succeeding with it and when it
might be expected to fail.
In this context, the electric vehicle is not only a disruptive innovation, but it involves massive
architectural reconfiguration as well, a reconfiguration that must occur not only within the product
itself but across the entire value chain. From procurement through distribution, functional groups will
have to interface differently than they have ever before. Hence, my project would need to be managed
as a heavyweight team in an organization independent of the mainstream company. This organizational
structure cannot guarantee the success of our electric vehicle program, but it would at least allow my
team to work in an environment that accounts for, rather than fights, the principles of disruptive
innovation.
NOTES
1. In 1996, the state government delayed implementation of this requirement until the year 2002, in
response to motor vehicle manufacturers’ protests that, given the performance and cost of the vehicles
they had been able to design, there was no demand for electric vehicles.
2. An excellent study on this subject is summarized in Dorothy Leonard-Barton, Wellsprings of
Knowledge (Boston: Harvard Business School Press, 1995).
3. This information was taken from an October 1994 survey conducted by The Dohring Company and
quoted by the Toyota Motor Sales Company at the CARB (California Air Resources Board) Workshop
on Electric Vehicle Consumer Marketability held in El Monte, California, on June 28, 1995.
4. This information was provided by Dr. Paul J. Miller, Senior Energy Fellow, W. Alton Jones
Foundation, Inc., Charlottesville, Virginia. It was augmented with information from the following
sources: Frank Keith, Paul Norton, and Dana Sue Potestio, Electric Vehicles: Promise and Reality
(California State Legislative Report [19], No. 10, July, 1994); W. P. Egan, Electric Cars (Canberra,
Australia: Bureau of Transport Economics, 1974); Daniel Sperling, Future Drive: Electric Vehicles and
Sustainable Transportation (Washington, D.C.: Island Press, 1995); and William Hamilton, Electric
Automobiles (New York: McGraw Hill Company, 1980).
5. Based on the graphs in Figure 10.1, it will take a long time for disruptive electric vehicle technology
to become competitive in mainstream markets if future rates of improvement resemble those of the
past. The historical rate of performance improvement is, of course, no guarantee that the future rate can
be maintained. Technologists very well might run into insurmountable technological barriers. What we
can say for sure, however, is that the incentive of disruptive technologists to find some way to engineer
around such barriers will be just as strong as the disincentive that established car makers will feel to
move down-market. If present rates of improvement continue, however, we would expect the cruising
range of electric cars, for example, to intersect with the average range demanded in the mainstream
market by 2015, and electric vehicle acceleration to intersect with mainstream demands by 2020.
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