How Internal Communicators Can Avoid the Innovator’s Dilemma
Summary: The Innovator’s Dilemma, a classic business book, examines how companies can succeed or fail in the face of disruptive innovation. The insights and lessons from this study can be used by internal communicators who are faced with maintaining a status quo comms program or deciding whether to adopt innovative communications strategies.
Introducing This Nine-Part Series
In 1997, Harvard professor Clayton M. Christensen published The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. The groundbreaking work examines how businesses succeed or decline when confronted with “disruptive technologies” — a term Christensen coined in a 1995 article for the Harvard Business Review.
Nearly 25 years later, The Innovator’s Dilemma remains a foundational book for business leaders and entrepreneurs looking for an edge in their product development or in gaining market share. Christensen’s insights resonate so much that as recently as the Feb. 4, 2021 edition of the Sway podcast, Mark Cuban, billionaire businessman and owner of an NBA team, remarked that, in deciding how to reach a larger audience with streaming technology, the NBA is confronting the innovator’s dilemma.
- The Innovator’s Dilemma was followed by The Innovator’s Solution, in which Christensen refined his ideas and changed “disruptive technology” to “disruptive innovation.”
I assert that Christensen’s insights can be used by internal communicators who are faced with maintaining a status quo comms program or deciding whether to adopt innovative communications strategies.
The Innovator’s Dilemma
Christensen argues that in doing everything “right,” established companies can still lose market share when faced with disruptive innovation from upstart competition. This is for two reasons:
- Iterating on products or services that are currently satisfying customer needs is easier than investing in something new. Moreover, the status quo is a guaranteed moneymaker, whereas the disruptive idea can be a gamble on resources and revenue.
- Disruptive innovation appeals to a small audience, which cannot satisfy the revenue or growth needs of a large incumbent company. The potential for revenue is too small for the organization to throw lots of money at.
So how does a large, established company break into or embrace disruptive innovation when the financial incentive isn’t apparent? That’s the innovator’s dilemma.
Failing to act makes room for small, disruptive, upstart companies to take market share. You can see it in the way Warby Parker moved in on the eyeglasses space, how Casper is taking market share in the mattress industry, in Impossible Foods’s foray into the meat-alternative food market, or in how Aerofarms is rethinking how we grow crops.
Translating for Internal Comms
Internal communications is constantly fighting for a share of what Christensen calls the “market.” He means consumers, of course, but internal comms’s version of the market is often referred to as our “audience.” With some exceptions, our audience are the employees in our organization. Internal communications is constantly battling for employee attention.
Just as companies need consumers to buy, use, and promote their goods, internal comms needs employees to consume, act on, and share our communications (i.e., our goods).
And just as incumbent (established) companies are faced with choosing to stick with the status quo or investing in disruptive innovation to maintain or grow market share, internal comms must determine whether to stick with what’s working or invest in innovative communications to maintain or grow employee attention.
If we substitute internal comms for companies and employees for customers, we can learn from Christensen, so we can overcome our version of the innovator’s dilemma.
Christensen describes four principles that companies must acknowledge in order to manage disruptive innovation. I have adapted them for the internal communications experience:
- Internal comms depends on employees and a cost center for resources
- Small employee audiences don’t solve the growth needs of internal comms teams
- Audiences that don’t exist can’t be analyzed
- Technology supply may not equal audience demand
You cannot ignore the four principles; you must understand them.
You cannot fight the four principles; you must harness them.
If you understand and harness the principles, you can succeed and overcome the innovator’s dilemma.
In the course of his examination of what makes companies succeed or fail in the face of disruptive innovation, Christensen uncovers seven useful insights. Again, I have adapted his ideas for internal communications:
- The pace of progress that audiences demand or can absorb may be different from the progress offered by technology.
- Managing innovation mirrors the resource allocation process: innovation proposals that get the funding and people they require may succeed; those given low priority will have little chance of success.
- Just as there is a resource allocation side to every innovation problem, matching the audience to the technology is another.
- The capabilities of most internal comms functions are far more specialized and context-specific than most managers believe.
- In many instances, the information to make large and decisive investments in the face of disruptive innovation simply doesn’t exist.
- Adopting a strategy to be strictly a leader or a follower is a losing strategy.
- Understandings of barriers to entry often relate to “things,” such as assets or resources, that are difficult to obtain or replicate.
In the complete series I examine these seven principles in depth and their implications for internal communicators who are faced with doing what works or adopting disruptive means (parts 2–8).
I will then conclude this multi-part series by applying the principles and insights into a proposal for internal comms to adopt a truly cutting-edge, disruptive technology (part 9).