The_Innovators_Dilemma__Clayton

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Clearly, as will be discussed below, it will be crucial for electric vehicle innovators to find markets thatvalue the attributes of the technology as it currently is capable, rather than waiting until the technologyimproves to the point that it can be used in the mainstream market.6. This statement was made by John R. Wallace, Director of Electric Vehicle Programs, Ford MotorCompany, at the CARB Workshop on Electric Vehicle Consumer Marketability held at El Monte,California, on June 28, 1995.7. It is remarkable how instinctively and consistently good companies try to force innovations towardtheir existing base of customers, regardless of whether they are sustaining or disruptive in character.We have seen this several times in this book: for example, in mechanical excavators, where BucyrusErie tried with its “Hydrohoe” to make hydraulic excavation technology work for mainstreamexcavation contractors; in motorcycles, where Harley-Davidson tried to launch low-end brand namebikes through its dealer network; and in the electric vehicle case described here, in which Chryslerpacked nearly a ton of batteries into a minivan. Charles Ferguson and Charles Morris, in their bookComputer Wars, recount a similar story about IBM’s efforts to commercialize Reduced Instruction SetComputing (RISC) microprocessor technology. RISC was invented at IBM, and its inventors builtcomputers with RISC chips that were “screamingly fast.” IBM subsequently spent massive amounts oftime, money, and manpower trying to make the RISC chip work in its main line of minicomputers. Thisrequired so many design compromises, however, that the program was never successful. Several keymembers of IBM’s RISC team left in frustration, subsequently playing key roles in establishing theRISC chipmaker MIPS and Hewlett-Packard’s RISC chip business. These efforts were successfulbecause, having accepted the attributes of the product for what they were, they found a market, inengineering workstations, that valued those attributes. IBM failed because it tried to force thetechnology into a market it had already found. Interestingly, IBM ultimately built a successful businessaround a RISC-architecture chip when it launched its own engineering workstation. See CharlesFerguson and Charles Morris, Computer Wars (New York: Time Books, 1994).8. The notion that non-existent markets are best researched through action, rather than through passiveobservation, is explored in Gary Hamel and C. K. Prahalad, “Corporate Imagination and ExpeditionaryMarketing,” Harvard Business Review, July–August, 1991, 81–92.9. The concept that business plans dealing with disruptive innovations should be plans for learningrather than plans for executing a preconceived strategy is taught clearly by Rita G. McGrath and IanMacMillan in “Discovery-Driven Planning,” Harvard Business Review, July–August, 1995, 44–54.10. Jeffrey Thoresen Severts, “Managing Innovation: Electric Vehicle Development at Chrysler,”Harvard Business School MBA student paper, 1996. A copy of this paper is available on request fromClayton Christensen, Harvard Business School.11. Glaub’s remarks were made in the context of the California Air Resources Board mandate that by1998 all companies selling gasoline-powered vehicles in the state must, in order to sell any cars at all,sell enough electric-powered vehicles to constitute 2 percent of their total vehicle unit sales in the state.As already noted, the state government, in 1996, delayed implementation of that requirement until2002.12. This statement was made by William Glaub, General Sales Manager, Field Sales Operations,Chrysler Corporation, at the CARB Workshop on Electric Vehicle Consumer Marketability held in ElMonte, California, on June 28, 1995; see p. 5 of the company’s press release about the workshop.13. Ibid.14. It is important to note that these statistics for Chrysler’s offering were determined by Chrysler’sefforts to commercialize the disruptive technology; they are not intrinsic to electrically poweredvehicles per se. Electric vehicles designed for different, lighter-duty applications, such as one byGeneral Motors, have driving ranges of up to 100 miles. (See Jeffrey Thoresen Severts, “ManagingInnovation: Electric Vehicle Development at Chrysler,” Harvard Business School student paper, 1996.)15. See, for example, Gabriella Stern and Rebecca Blumenstein, “GM Is Expected to Back Proposal forMidsize Version of Saturn Car,” The Wall Street Journal, May 24, 1996, B4.170
16. This list of smaller, simpler, more convenient disruptive technologies could be extended to includea host of others whose histories could not be squeezed into this book: tabletop photocopiers; surgicalstaplers; portable, transistorized radios and televisions; helican scan VCRs; microwave ovens; bubblejet printers. Each of these disruptive technologies has grown to dominate both its initial and itsmainstream markets, having begun with simplicity and convenience as their primary valuepropositions.17. The notion that it takes time, experimentation, and trial and error to achieve a dominant productdesign, a very common pattern with disruptive technologies, is discussed later in this chapter.18. This statement was made by John R. Wallace, of Ford, at the CARB Workshop on Electric VehicleConsumer Marketability held in El Monte, California, on June 28, 1995; see p. 5 of the company’spress release.19. Glaub, statement made at the CARB Workshop.20. Two excellent articles in which the relative roles of product development and incremental versusradical technology development are researched and discussed are Ralph E. Gomory, “From the ‘Ladderof Science’ to the Product Development Cycle,” Harvard Business Review, November-December,1989, 99–105, and Lowell Steele, “Managers’ Misconceptions About Technology,” Harvard BusinessReview, 1983, 733–740.21. In addition to the findings from the disk drive study summarized in chapters 1 and 2 thatestablished firms were able to muster the wherewithal to lead in extraordinarily complex and riskysustaining innovations, there is similar evidence from other industries; see, for example, Marco Iansiti,“Technology Integration: Managing Technological Evolution in a Complex Environment,” ResearchPolicy 24, 1995, 521–542.171
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Copyright © 1997 by the President
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In GratitudeAlthough this book list
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IntroductionThis book is about the
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There are two ways to resolve this
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Most new technologies foster improv
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Chapter 6 examines the emerging per
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To maintain their share prices and
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another—changes. When the perform
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published has been the number of pe
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HOW DISK DRIVES WORKDisk drives wri
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Some have attributed the high morta
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SUSTAINING TECHNOLOGICAL CHANGESIn
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The same pattern was apparent in th
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The trajectory map in Figure 1.7 sh
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with increased capacity at a lower
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commercially mature in its new appl
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entrant firms to topple the incumbe
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technology disk drives.11. This sta
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In assessing blame for the failure
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Source: Reprinted from Research Pol
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with its own value chain, 10 is ass
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Source: Data are from company annua
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Figures 2.5 and 2.6 illustrate clea
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analysts, therefore, joined their m
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engineering workstation, and mainfr
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procure the component flash chips;
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Figure 2.8 Comparison of Disk Drive
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in commercializing such technologie
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products can be interactively devel
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Source: Osgood General photo in Her
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mechanical excavators by their reac
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Source: Brochure from Sherman Produ
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Bucyrus Erie was the only maker of
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equipment on which had longer reach
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11. Makers of early hybrid ocean tr
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Source: Data are from various issue
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Source: Data are from various issue
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Compare that conversation to the ma
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employees, there was nothing about
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more than 93,000 in 1980 to fewer t
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Another analyst made similar observ
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1970).3. The use of the term system
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Part Two of this book is built upon
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CHAPTER FIVEGive Responsibility for
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career trajectories within the comp
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its major customers and replace the
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DEC didn’t stumble for lack of tr
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Figure 5.2 Gains in Discount Retail
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Woolworth’s organizational strate
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(2), 1991, 239-262, as essentially
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fifteen year expense of developing
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Source: Clayton M. Christensen, “
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was a start-up or a diversified fir
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A decade after the release of the A
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offering. By 1991, however, even th
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General Electric and Westinghouse h
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the competition were able to prospe
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CHAPTER SEVENDiscovering New andEme
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