I'm currently reading a book called The Innovator's Dilemma by Clayton M. Christensen. I may write more about the details of the book once I've finished it, but for now, I want to take a stab at explaining the differences between disruptive and sustaining technologies and their impact on established organizations.
All well-run organizations, whether for-profit or not-for-profit have a specific focus. The focus might be producing cardboard boxes or training teachers or building computers. With this focus in mind they create a network of suppliers and employees and customers. If they're a successful, well-run organization, they spend time figuring out what will be successful, listening to what their customers want, and improving continuously.
Sustaining technologies are those technologies or improvements that sustain an organization's focus, goals, and customers. Sustaining technologies allow an organization to do their job better, to improve their products and to increase customer satisfaction. In addition, sustaining technologies provide obvious improvements in the things that current customers want. In an example that Christensen uses in his book, desktop computer users want disk drives with more capacity at the same or lower cost. A sustaining technology would be a new technique or production method or disk drive that delivered increased storage capacity for desktop computer users.
Sustaining technologies can be radical. For example, a method of manufacturing more cardboard boxes per hour might involve completely different equipment for the operation. What it doesn't involve, though, is a change of focus or a creating a new market.
Disruptive technologies are usually those innovations that initially do not improve the focus of the company. Disruptive technologies often don't have a market when they're created. A market must be developed and often it's made up of new customers that the established companies in that field haven't been called on to serve (often 'down-market' from their current customers--smaller computers, smaller numbers, etc). The initial benefits of the disruptive technologies are not features that their current customers are calling for. For example, small, light-weight hard drives with less capacity and a higher cost per megabyte of storage are not appealing to desktop computer users. They don't care about weight because they don't move their machines. They want storage and price. Laptop computer users, however, highly value lightweight storage and are willing to buy disk drives with less capacity if they make significant gains in size and weight. What makes small disk drives a disruptive technology is that they begin to improve in capacity and cost until they reach the same or better price points and storage capabilities as the larger drives. Now desktop customers also want lightweight, high-capacity hard drives and they go to the new companies, leaving their old suppliers scrambling to adopt the new technology.
According to Christensen, failure to plan or respond to disruptive technologies doesn't necessarily mean that an organization was poorly managed or even that they were not visionary. Companies may be efficient, forward-looking, and willing to adopt new technology and still miss out on disruptive technologies. Disruptive technologies are disruptive. They generate new markets that often didn't exist before and establish themselves in those areas with those customers before moving into existing markets. Current customers have requirements that, initially at least, aren't met by the disruptive technologies and when organizations go to their customers to ask what they need, they don't get feedback that compels them to consider disruptive technologies.
From The Innovator's Dilemma:
If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to company's problems--planning better, working harder, becoming more customer-driven, and taking a longer-term perspective--all exacerbate the problem.
Christensen provides the following principles to explain more succinctly the appeal of disruptive technologies and why they are difficult for established companies to adopt:
I'll be making a followup post shortly that looks at a specific example in Extension.
Posted by dcoates at October 03, 2003 01:20 PM