Lessons from “The Innovator’s Dilemma” for Business Leaders Considering Generative AI

Clayton Christensen’s seminal work, “The Innovator’s Dilemma,” has long been a source of guidance for business leaders grappling with disruptive technologies.

As generative AI emerges as a transformative force across industries, it’s worth revisiting Christensen’s insights.

Beware of blindspots:

Christensen highlights the tendency of established companies to disregard new technologies that don’t align with the preferences of their current customer base, especially when the disruptive technology initially offers a lower quality version of the existing technology.

Does ChatGPT or Bard write content of code as well as you would? No, maybe not. But….

Market incumbents often focus on serving their existing customers and optimizing their current products or services to meet their demands. This approach is based on the assumption that sustaining innovation—incremental improvements to existing products—will continue to drive growth and success. However, disruptive technologies often start by addressing a different market segment with different needs, and they initially offer a lower quality or less sophisticated alternative to the incumbents’ offerings.

In this scenario, the incumbent companies tend to dismiss the disruptive technology as inferior or irrelevant. They rely on the feedback from their current customers, who are typically satisfied with the higher quality products they already possess. The incumbents fail to recognize that disruptive technologies have the potential to evolve rapidly and improve over time, ultimately threatening their dominant position in the market.

The book explains that market incumbents face the “innovator’s dilemma” when considering disruptive technologies. They must make a decision: either invest in the disruptive technology and risk cannibalizing their existing business, or ignore it and risk being surpassed by new entrants who recognize its disruptive potential. The incumbent’s focus on current customers and their preferences becomes a barrier to adopting and exploring the disruptive technology.

However, as time progresses, the disruptive technology improves in quality, becoming more appealing to a broader customer base. This evolution allows new entrants to gain traction and expand their market share, eventually threatening the incumbents’ stronghold. By the time the incumbents realize the significance of the disruptive technology, it may be too late for them to catch up or adapt effectively.

“The Innovator’s Dilemma” provides examples from various industries to illustrate this phenomenon. Companies like Kodak, which disregarded digital photography due to its lower quality compared to traditional film, and Blockbuster, which dismissed the potential of online streaming due to its inferior video quality, serve as cautionary tales.

To overcome the innovator’s dilemma, market incumbents must recognize the importance of monitoring emerging technologies and potential disruptions. They should be open to exploring new market segments, even if the initial offerings seem inferior, and allocate resources to understand the evolving customer needs. By embracing a mindset of continuous innovation and being willing to disrupt their own businesses, incumbents can adapt to the changing landscape and proactively respond to disruptive technologies.

Embracing Strategic Innovations:

Christensen emphasizes the importance of strategic innovations, particularly those that challenge traditional norms. Generative AI provides a platform for such innovations, allowing organizations to explore new territories, experiment with novel ideas, and create groundbreaking solutions. Business leaders must foster a culture of innovation and empower their teams to leverage generative AI as a strategic tool. By embracing generative AI, leaders can challenge conventional thinking, disrupt their own businesses, and create new market opportunities.

Adapting to Uncertainty and Iterative Development:

“The Innovator’s Dilemma” underscores the need for businesses to adapt and iterate in uncertain environments. Generative AI algorithms thrive on data and continuous learning, constantly improving outputs through iterative development. Business leaders should adopt a similar mindset, embracing uncertainty and utilizing generative AI to experiment, learn, and iterate. By leveraging generative AI’s ability to generate diverse possibilities and rapidly evaluate outcomes, leaders can gain a competitive edge by iterating and refining their offerings at a faster pace.

Seizing New Market Niches:

Christensen highlights the importance of exploring new market niches that emerge from disruptive technologies. Generative AI could open doors to previously unexplored territories, enabling businesses to identify and capture new customer segments. By applying generative AI to understand customer preferences, customize experiences, and generate personalized products, leaders can unlock new avenues for growth and secure a competitive advantage.

Balancing Existing and Emerging Technologies:

Christensen’s book emphasizes the challenge of balancing existing business operations with the adoption of disruptive technologies. Similarly, business leaders need to strike a delicate balance between leveraging generative AI and optimizing existing processes. Rather than viewing generative AI as a threat, leaders should see it as an opportunity to augment human capabilities and enhance existing operations. By integrating generative AI into the organization’s innovation strategy, leaders can strike a harmonious balance, ensuring the coexistence of both traditional and generative AI-powered approaches.

Not a good idea to sit back:

By recognizing the disruptive potential, embracing strategic innovations, adapting to uncertainty, seizing new market niches, and balancing existing and emerging technologies, leaders can unlock potential in generative AI. As generative AI becomes increasingly prevalent, business leaders who understand and embrace its power will be well-positioned to drive innovation, gain a competitive edge, and secure future success.


Why we hate sponsored impressions

I’m sure there’s a rule against writing LinkedIn articles in anger.

This article doesn’t follow that rule.

If members of your team, or your marketing partner are paying for sponsored LinkedIn posts, please ask them the following. Why are they sponsoring those posts specifically? And on what organic metrics are they basing their decisions?


When we start marketing engagements with clients, one of the very first things we do is examine what LinkedIn posts have garnered the most impressions, and the general trendline on impressions (are they going up, down, or around).

If clients have engaged in sponsored posts in the past, that clouds what we can see in terms of how their network is responding to what they’re sharing. We’re not against paid promotion of content or social media. But we like to know what we’re putting dollars behind before amplifying it.

Organic impressions, what folks saw and engaged with, because friends and colleagues reacted and shared gives us a clearer picture of what an audience is interested in from our client, why they like it, and from whom they like to get it.

Too often we’ll look back into a client’s LinkedIn history and see posts that seem to have done remarkably well and are exemplars of good content, only to see that we’re looking at sponsored impressions, and the organic impressions tell a different story.

If anything, this post is directed to the super smart folks at LinkedIn who have on one one hand, made it a lot more challenging for marketers to work on LinkedIn than other social platforms. But on the other, that has meant that people from our tribe have not watered down the content that’s shared by our manipulations. LinkedIn interactions are more authentic, which is excellent.

However, in part to allow for that authenticity perhaps, LinkedIn makes it difficult to more easily see how posts perform organically, you have to do extra work to see it. The least amount of clicking, checking and work only shows you that if you spend more money, you reach more people… but to what end?

That’s why we often ask our clients to stop sponsoring posts after we engage with them, so we can get a cleaner picture of what’s going on. And because we can’t endorse where the money should be spent until we get a validated signal of what the money should be spent on.

Media Relations

Damn the Torpedoes!

Before 60 seconds were up, one of the U.S. Navy’s most powerful warships had slipped under the surface of Mobile Bay, Alabama. The ship’s pilot and a few more men scrambled out the only hatch available. Everyone else on board was trapped, drowning and soon dead.

As we launch Gale Strategies, a public relations firm for digital thought leadership, I think about that moment. Depressing right?

Actually, it’s what happened next and why it happened that demonstrate that Gale Strategies is ready for the world and why your business is ready if you’re bringing about digital transformation.


The ironclad USS Tecumseh hit what we call today a “mine.” One of those spiky explosive balls floating below the waves that you have to avoid, if you still remember the game Minesweeper. In this case – back in 1864 – they were called “torpedoes.”

If the just-sunk Tecumseh was one of the U.S. Navy’s most powerful ships, the world’s most powerful was the Confederate CSS Tennessee, and it was coming straight for the clump of Union boats behind where the Tecumseh had been.

“Damn the torpedoes! Full speed ahead” – U.S. Admiral David Farragut is alleged to have shouted.

And despite it being apparent suicide, the fleet pushed forward through the minefield and into the embrace of the Tennessee. By the end of the day, with Farragut literally tied to his flagship’s rigging so he could see above the smoke, the fleet had come out on top in one of the greatest naval victories of the U.S. Civil War.

Apart from all of us wanting to win, what does this story have to do with launching a business or digital transformation? Well first, everything most of us think we know about the Battle of Mobile Bay is wrong. It’s wrong in a way that’s similar to how few really seem to understand digital transformation (more on this later).

Against all odds

“Damn the torpedoes,” has come to mean moving forward despite considerable risk. It’s a cry of the determined who accept their fate and will go against all odds.

But that’s not what Farragut meant.

If he wanted to be more precise he might have said –

“Actually, I’ve calculated the key variables in this scenario and it may not seem like it right at this moment, but we’re in a much better position than the other side. To pull back now in the face of this loss would mean to delay success further.”

Thank goodness that’s not what he said.

Farragut was not impatient, nor reckless. He had a vision, and he could see tomorrow from where he stood.

His fleet had been sitting outside of Mobile Bay for eight months. He had not attacked even when he knew the Confederates were building the monstrous Tennessee, because the U.S. army did not have enough forces in the area to translate a win on the water into occupation of the forts around the harbor and the capture of Mobile itself.

He had to give up at one point while waiting, and leave Mobile Bay to help a failed campaign elsewhere before returning. Eventually the army delivered ground forces, but he did not have iron ships to help with the attack. So he waited as the Confederates strengthened the forts protecting the harbor, laid mines, and finished the Tennessee.

But on August 5th (yes, this Monday is the 155th anniversary of the battle) he finally had the combination of forces he needed to succeed.

Farragut didn’t have absolutely all the variables calculated, but he knew that he was now in position to absorb tragic losses like the Tecumseh and still roll over his opponent.

Farragut was patient, and he knew how to steadily build a winning position, and then when to push it home. He knew when the wave of history was with him.

Digital transformation

Public relations. Your own industry if you’re not in PR. All of it is changing. Your investor deck may hide the fact that deep down inside, you feel like an underdog fighting for an opening. The incumbents may be the world’s most powerful – like that huge CSS Tennessee bearing down on us. You may worry that you’re on the wrong side of the competition’s winning streak. Unknown and unseeable dangers are all about us as we navigate these waters. We will take losses.

But around Farragut and beyond that day in Alabama, slavery would be washed into the past. It had to be. Industrialization in the Northern U.S. would prove more powerful than the feudal plantation economy in the South. Immigration and the influx of Irish and Germans in the North and black troops who joined the Union army together would prove more powerful than the best the South could offer. The war would be grim, but the wave of a new era was pushing across the country.

That wave would be articulated by Abraham Lincoln, through his Gettysburg Address, through the thought leadership of new industrialists, shipbuilders and young women and men who would carry the wave forward. That’s the spirit of Gale Strategies today.

We want to help you articulate today’s wave of digital transformation, to define what the future of your industry will look like, and why you are leading the way. It’s not reckless; we know how to do it.

We’ve calculated the key variables in your scenario and it may not seem like it right at this moment, but we’re in a much better position than it initially appears. To pull back now in the face of distractions and even losses would mean to delay success further.

One hundred and fifty five years after David Farragut said it – Damn the Torpedoes, full speed ahead. I hope you will.