The Innovator's Dilemma

Question

What specific attributes or practices of a successful company, usually considered strengths (like listening to customers), does Christensen suggest become obstacles when confronted with disruptive change, and through what mechanism do they hinder adaptation?

Synthesized answer

Christensen suggests that attributes and practices usually considered strengths in successful companies can become obstacles when confronted with disruptive change. These include listening astutely to customers and investing aggressively in new technologies [1].

The mechanism through which these practices hinder adaptation is that these companies fail "by doing everything right" [1]. While these principles lead to success in established markets, they can cause leading companies to lose their market leadership when faced with disruptive changes in technology and market structure [1]. The passages indicate that this leads to managers needing to learn "when it is right not to listen to customers, when to invest in developing lower-performance products that promise lower margins, and when to pursue small markets at the expense of seemingly larger and more lucrative ones" [2].

Synthesized from the book passages below. Chat with the book on Feynman for follow-up.

From the book

Title: The Innovator's Dilemma by Clayton M. Christensen, L J Ganser, Don Leslie Description: In his book, The Innovator's Dilemma [3], Professor Clayton Christensen of Harvard Business School describes a theory about how large, outstanding firms can fail "by doing everything right." The Innovator's Dilemma, according to Christensen, describes companies whose successes and capabilities can actually become obstacles in the face of changing markets and technologies. ([Source][1]) This book takes the radical position that great companies can fail precisely because they do everything right.…
Passage [1]
vation. These principles will help managers determine when it is right not to listen to customers, when to invest in developing lower-performance products that promise lower margins, and when to pursue small markets at the expense of seemingly larger and more lucrative ones. - Jacket flap. [1]: http://web.mit.edu/6.933/www/Fall2000/teradyne/clay.html
Passage [2]

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