Steve Safran reports on Clayton Christensen’s keynote at the Borrell Associates Local Online Advertising Conference:
Christensen showed how large companies have the “dilemma” of developing a new product – one that competes with the company’s existing product and one that costs less. Heck – competitors are creating newer and less expensive products – so why shouldn’t you? Christensen showed how companies fail: They refuse to develop newer products that, while perhaps giving a short-term hit to the bottom line, will ultimately secure the long term growth of the company.
In other words: you can’t rely on your expensive product selling forever. The competition will make something better and cheaper. You have to do the same.
Clayton Christensen is perhaps best known as the author of the book, The Innovator’s Dilemma, that looked at how companies struggle to adapt their businesses to major technology changes. He was also profiled recently in Forbes magazine.
(Related story: Disruption: Are we more worried than the consumers?)