How can I make more money? is a question all company managers ask themselves. One they don't understand themselves enough is: 'Have I missed out on a new development?' So argues Harvard Economist Clayton Christensen, who investigated by industry leaders usually miss the boat when it comes to developing groundbreaking innovations. His work is considered a milestone in economic research Christensen distinguishes between s'ustainable innovation' the improvement of existing products that are designed to keep prices and margins high and 'disruptive innovation', the lauching of new products and typically simpler, faster, cheaper. In most cases established companies trying to improve successful products that already meet more than the customers needs. Christensen calls it 'overshooting': the managers of a company producing a product have no idea why their product is so popular and ignore what customers really want in favour of adding yet more non essential features. For eample, who ever never uses all the features in Microsoft Word?
Because these companies focus on their existing markets rather than developing new products they don't see the threat of disruptive innovations coming from below. As a result they overlook disruptive innovation ganes a share of the market and eventually end up replacing the previously leading product.
I don't know if it gets better or if it's different. But it has to be different to be good
Georg Christoph Lichtenberg
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