The reason why it is so difficult for existing firms to…
“The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption. Companies in fact are specifically organized to under-invest in disruptive innovations! This is one reason why we often suggest that companies set up separate teams or groups to commercialize disruptive innovations. When disruptive innovations have to fight with other innovations for resources, they tend to lose out.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
Established firms excel at current markets but their structures hinder investment in disruptive innovations, so separate units are needed to nurture new ideas.
In simple terms: Existing firms struggle with disruptive change.
Key Takeaway
Create autonomous teams for breakthrough projects.
Themes
business strategy
innovation
disruption
organizational design
leadership
Mood
strategic
critical
Type
business
inspirational
When to use this quote
- startup incubators
- R&D spin‑offs
- innovation labs
- cross‑functional teams
- venture funding
Key Concepts
disruptive innovation theory
resource allocation
organizational inertia
strategic separation
Questions to Reflect On
- How can companies protect disruptive projects from internal competition?
- What metrics best assess early disruptive ideas?
A Different Perspective
Separate units may still compete for resources, limiting success.