The Innovator’s Dilemma

When New Technologies Cause Great Firms to Fail

by Clayton Christensen

This book explains why successful companies often struggle when faced with new markets they inadvertently create. This summary zeroes in on a central theme: disruptive innovation.

About the author

Clayton M. Christensen (1952–2020) taught at Harvard Business School and was a top management researcher globally. He penned numerous books and over a hundred articles. The Economist ranked his book The Innovator's Dilemma among the six most crucial business books ever written.

Grasping a crucial economic concept

Market trends move at breakneck speed. So fast that theories about them rarely keep up. Such ideas "come and go like mayflies" (The Economist). But occasionally, a concept sticks around. An idea that refuses to fade. "Disruptive innovation" is one such notion.

Change can be messy: creating something truly novel often means breaking the mold. In economics, this isn't a brand-new idea. Back in the 1940s, Austrian-born thinker Joseph Schumpeter coined the term "creative destruction." He argued that destruction can be positive, as it helps push the economy forward and reshape it.

Fifty years down the line, Clayton Christensen gave this concept a significant update. It's tough to overstate the impact his book The Innovator's Dilemma had when it hit shelves in 1997. Steve Jobs said it profoundly shaped his thinking. Michael Bloomberg sent fifty copies to his pals. Andy Grove, Intel's CEO, called it the decade's most important book. It flew off shelves, selling over 500,000 copies in just a year.

What made the book such a hit? Well, it predicted how a big chunk of the economy would work in the new millennium – long before apps and online shopping were everywhere. And Christensen nailed it. Today, it seems obvious that innovation has a destructive side: Uber shook up traditional taxis; Amazon upended brick-and-mortar shops; and countless other firms are trying to do the same in their fields.

Let's zoom in. In this brief summary, we'll focus on the key idea from The Innovator's Dilemma: disruptive innovation.

Let's kick off with a story.