Disruptive Technologies Summary

Throughout history there has been a prevalent pattern in which a large account of leading companies has failed. Many leading companies try have had problems developing technologies to satisfying the customers' needs of tomorrow by focusing on the needs of customers today. The article points out the largest reason for the failure are that companies often stay close to their customers.

The article lists two types of technology, Sustaining and disruptive technology. Sustaining technology meets the same needs customers are already getting from their products with improved attributes. Disruptive technology will offer a different set of attributes from which customers originally valued, and may perform worse in different aspects, that are important to customers. Today's leading companies will often choose to invest heavily into sustaining technologies, because it provides the higher forecasted profit. The disruptive technologies will more often be developed by new companies typically aimed at emerging markets.

The moment of failure begins when disruptive technologies have been established in the new emerging markets, and leading companies continually compete in sustaining innovations to meet customers' satisfaction. With little preparation leading companies find themselves unprepared as the established market starts evolving toward the emerging market. The market starts to change as the disruptive technology better satisfies the needs of customers, as it is too late for leading companies to develop the new technology for themselves.

The article goes over ways in dealing with disruptive technologies. The first step is to determine whether the technology is disruptive of sustaining. The author finds that it is essential to identify disruptive technologies and threats to the company. The company however can't rely on its processes used for sustaining technologies. They believe that managers should explore products where there is a disagreement between internal personnel, such as marketing, financial managers and technical personal about which projects to support.

Define the Strategic Significance of the disruptive technology. As a manager it's important to ask individuals the right questions about disruptive technology from a strategic standpoint. From this standpoint you wouldn't want to ask what mainstream customers want because they will demand the highest performance. The authors went over a graph "How to assess Disruptive Technologies" providing insight to help managers know which questions to ask. The graph measures performance by time compared with performance improvement required by mainstream market, and the expected trajectory of performance improvement of the disruptive technology. If the slope of the expected trajectory of disruptive technology is higher than the slope of the other than the new technology or product is strategically significant.

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