The Change Catalyst

Chapter 30Overcoming Complacency (The Innovator's Dilemma)

‘Success breeds complacency. Complacency breeds failure. Only the paranoid survive.’

Andy Grove⁵

Complacency has destroyed many a successful organisation. It is one of the most powerful barriers to change there is.

In my career, I have worked with several successful organisations whose leadership teams had become complacent. I have also worked with a large number of companies whose leaders managed to avoid the trap that befalls many a market leader; the trap that has become known as ‘The Innovator’s Dilemma'.⁶

In his 1997 best-selling book, regarded as one of the best business books ever written, Hayden Christensen details the challenges faced by market leaders and successful organisations. And the problem is that the approach and skills that have made them so successful are the very things that will cause them to come undone in the future.

The decision-making and resource allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies and market changes: listening to customers, tracking competitors' actions and investing in higher-quality products that will yield greater profits. Christensen concluded that these are the reasons why great firms stumbled or failed when confronted with disruptive technological change.

Disruptive technologies start out being small, low-margin and unprofitable. The new entrants, often founded by frustrated ex-employees ...