20 years on, disruption remains hard to prevent
It has been two decades since Clayton Christensen described the concepts behind disruptive innovation. As the Harvard Business Review recently pointed out, having two decades to process the theories involved hasn’t allowed companies to exploit them at will. (Sep. 4, Wessel) Businesses are still grappling with disruption from competitors and having trouble harnessing this kind of progress.
The issue could have to do with the ways today’s industries have developed. While it was once feasible for large corporations to create isolated internal departments that focused on disruptive ideas, that strategy is now coming up short.
The disruptive companies posing a threat to today’s market leaders are doing so by selling stakes in themselves. This is cheap for them to hand out, as startups have less value to give out at the beginning of their lives. These organizations run on this lean financial model until their ideas take off (in best-case scenarios).
When established companies today try and fight against these agile young organizations, they run into the issue of investor expectations. Borrowing earnings from their traditional units to fund experimental teams working in new mediums could be a tough pill for financial backers to swallow, with the potential losses holding these industry leaders back from taking action.
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