The Innovator’s Dilemma

WARNING: The Innovator’s Dilemma may be hazardous to your company’s health.

In my most recent blog I talk about the innovator’s dilemma, and the choices facing test and measurement companies.  The innovator’s dilemma is an artifact of game theory, which explains many of the choices made by competitors. Here, I explain the tough choices ahead for traditional instrument companies. We all know the innovator’s dilemma, but we constrain ourselves even when we know we are facing it and what we must do.

The innovator’s dilemma is real. Typically the incumbents keep to their old strategy until it is too late and they become a niche. Faced with a threat that requires new skills or business model, they enhance the old core competencies to go after an ever more selective group of customers. Think about the Swiss watchmakers when they were faced with the quartz movement. Their mechanical designs became even more exotic.  But shouldn’t the marketing departments recognize the trend and propose a response? The innovator’s dilemma is so insidious that often the new technology isn’t recognized in the current market models, or is segmented out as something different and strange. Besides, they have a lot of current customers (the remaining ones) that are demanding new features. Culture plays a strong role internally, keeping an organization in denial about the threat.  As the new technology advances, the incumbents often delay an explicit strategy until it is too late.

Modular instrumentation has thrusted the test and measurement industry deeply into the realm of the innovator’s dilemma.  You can read my complete set of comments, and my advice to vendors in the final paragraph, here.

By Larry DJ

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