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Why disruption is still so hard

Overcoming 'the innovator's dilemma'

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in Leaders & Managers,Leadership Skills

One reason that Polaroid went out of business, says former Polaroid CEO Gary T. DiCamillo, is that the revenue it earned from film sales served as a blockade, preventing experimentation with new business models.

“We knew we needed to change the fan belt, but we couldn’t stop the engine,” he said. “And the reason we couldn’t stop the engine was that instant film was the core of the financial model of this company. It drove all the economics.”

Eventually, all successful companies run across this problem. Clayton M. Christensen wrote about the problem in The Innovator’s Dilemma.

It has happened again with Instagram, the phone app that allows users to snap photos then convert them to look like something taken with a camera from yesteryear. A small, disruptive team came up with the app, which Facebook paid $1 billion for. Why didn’t Kodak or even Facebook build Instagram?

One member of Kodak’s board, Michael Hawley, points to culture. “Cultural patterns are pretty hard to escape once you get sucked into them,” he says.

Given how difficult it is to change culture or overcome “the innovator’s dilemma,” perhaps the best a leader can hope for is knowing when to spend the $1 billion.

— Adapted from “Disruptions: Innovation Isn’t Easy, Especially Midstream,” Nick Bilton, The New York Times.

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