Reflection on ‘Disruptive Technologies: Catching the Wave’ Joseph Bower, Clayton Christensen

Bower and Christensen outline the consistent failure of businesses to stay at the top of their industries when faced with disruptive change. They explain why this occurs and offer suggestions for how businesses can avoid being left behind. They conclude that paradoxically the reason many businesses fail to remain leaders is that they stay too close to their customers. This close attention to customers makes them successful in the first place but can leave them flatfooted when faced with innovative changes.

They distinguish between sustaining technologies, which successful businesses are good at, and disruptive technologies. That latter are not valued by existing customers at the outset, but their performance attributes improve so quickly that before incumbent businesses realize, companies which have embraced the disruptive technologies take over. For example Xerox ruled the copy machine business and ignored small desktop copiers while Canon grabbed that business. By the time Xerox realized what was happening it was too late. Sony introduced transistor radios, which sacrificed fidelity but created a market for portability. Today portable music devices have displaced hi fi equipment as the primary way people listen to music.

Disruptive technologies initially appear unattractive because their market is small and it’s hard to predict how large the market will get. Managers conclude the new technologies cannot make a meaningful contribution to growth and are therefore not worth the investment. Instead they return to the business they know.

Bower and Christensen conclude that executives must be able to recognize technologies that will disrupt their business and then create organizations separate from their mainstream business to exploit the new technologies. To accomplish the first they suggest look for technology where different staff areas disagree. If marketing and finance people feel there is little potential while technical personnel argue that a new market will emerge, you have a disruptive technology that top managers should explore. They urge creating separate ’skunkworks’ outside the main business to that existing business priorities don’t crush innovations which will keep businesses up to date.

Their analysis is pertinent to public radio stations in major markets that air news and information. These stations have attracted large and generous audiences by curating and creating in-depth news and information programming. However in the past 5 years audience growth has leveled off and audience members have aged.

Simultaneously the Internet has become a disruptive technology with inexpensive tools allowing anyone to reach worldwide audience at a fraction of the cost radio stations spend to reach a regional audience. For many broadcaster managers, news/information/opinion audio services provided by the web are considered amateurish and only of interest to tiny audience. So they focus resources on what they now works – radio. Applying the analysis of Bower and Christensen would lead managers to project the future growth of the radio audience and compare it to the potential future growth of the Internet audience.  This should clearly mark the Internet as a potentially disruptive technology that public radio stations should be aggressively exploring.