The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

For academics and practitioners alike, The Innovator’s Dilemma is considered a cornerstone text in business management and strategy. Its key contribution to the critical discourse of management is the popularization of disruptive innovation as a business concept, though the first edition of the book used the term “disruptive technology.”

The theory of disruptive innovation has drawn comparisons to Austrian economist Joseph Schumpeter’s theory of creative destruction. In his preface, Clayton M. Christensen even acknowledges that a relationship between the two concepts exists. However, the association of these concepts has been a cause for debate, with some readers conflating the ideas without noting the crucial distinctions between the two writers’ approaches. According to Schumpeter, creative destruction entails the wholesale replacement of one set of innovations for another. By contrast, disruptive innovation describes the ways in which companies use simple applications of new technologies to move upmarket, shifting the prevailing market positions in the process. As Christensen states, “disruptive technology is probably the cause behind the ‘creative destruction’ […] observed to be the primary engine of economic progress” (x). Whereas Christensen’s ideas focus on market dynamics, Schumpeter’s concept observes wider economic conditions that result from those interactions.

This theory introduced a new way of thinking about market dynamics, explicating the ways in which rigid corporate structures and business requirements have hindered companies from successfully commercializing new technologies. Notably, Christensen’s book not only offers an investigation into the root causes of the innovator’s dilemma, but it also points to possible solutions that benefit companies on either end of the market, regardless of their industry.

In 2011, the business magazine The Economist listed Christensen’s book among the six most important business texts of all time. Christensen’s ideas have influenced other notable books such as tech leader Josh Linkner’s The Road to Reinvention: How to Drive Disruption and Accelerate Transformation, and the author has also directly influenced countless educational programs, including that of his own alma mater. Notably, Harvard Business School offers two Executive Education programs entitled “Disruptive Innovation: Strategies for a Successful Enterprise” and “Managing Innovation,” both of which build on the ideas that Christensen proposed in his first publications.

Part of the continuing appeal of Christensen’s theory of disruptive innovation is its applicability to contexts outside business management. His 2008 book, The Innovator’s Prescription, applied disruptive innovation to the field of health care, discussing it in the context of the Affordable Care Act. Three years later, Christensen would once again apply the concept to the field of education in The Innovative University. In 2019, his book The Prosperity Paradox addressed innovations in the context of social policy and the eradication of global poverty.