Why Great Companies Fail in Times of Technological Change.
- Bas Kemme
- Apr 2
- 4 min read

Kodak. Nokia. Digital Equipment Corp. Giants in their industries. Leaders in innovation. And yet—each of them faltered in the face of technological disruption.
Why?
Not because they lacked innovation. Not because they were poorly managed. On the contrary—they were exceptionally good at doing things right. But they failed to do the right things.
As we now enter the age of AI, understanding this paradox is more important than ever. Why do competent, well-managed organizations struggle to adapt when the technological game changes? What blinds them? And more importantly—how can we avoid falling into the same trap?
This article explores the theory behind disruptive innovation, draws from real-world examples, and offers a lens to reflect on your own organization. It's a timely invitation to reassess how we make decisions and what it truly takes to lead in times of deep change.
Part 1: The Disruptive Pattern
To anticipate the future, we need theory—because theory gives us an "if–then" formula. And when it comes to technological disruption, Clayton Christensen’s disruption theory, outlined in The Innovator’s Dilemma, remains one of the most powerful. It describes how an innovation can reshape a market by introducing simplicity, accessibility, and affordability—displacing established leaders in the process. The disruption pattern generally unfolds like this:
Technology improves faster than customers can absorb it.
Incumbents move upmarket to chase high-margin customers and sustaining innovations.
New entrants start with inferior, but cheaper or more accessible products, and then improve rapidly—eventually appealing to the mass market and flipping the basis of competition.
This is not a random accident. It’s a recognizable pattern—and once you know what to look for, you can spot the warning signs.
Part 2: How the Pattern Unfolds
Let’s zoom in on one specific element:Why do established companies often ignore emerging markets, while new entrants are drawn to them?
More importantly, even when incumbents recognize the threat, why are they so often too late to act?
The answer is counterintuitive: Five classic management strengths turn into weaknesses under disruption. Let’s explore them.
1. Listening to Customers
How it backfires:
Ignores emerging, latent needs
Adds features to serve existing high-end users
Avoids the imagination needed to see what customers really want
This is where the concept of Jobs To Be Done comes in.Steve Jobs famously said not to rely on customer research—and in some ways, he was right. He didn’t mean ignore customers entirely, but rather, focus on what they truly need. Not the product, but the job they’re trying to get done. (“People don’t want a quarter-inch drill—they want a hole in the wall.”) That insight led to the iPod: “1,000 songs in your pocket.” A product no focus group ever asked for, but millions wanted.
For the essentials on jobs to be done go to our librairy and click on videos (milkshake story) or articles ('Finding the right job for your product')
2. Chasing Big Markets
How it backfires:
Overlooks small, early-stage markets where disruption begins
Disruptive innovations often start in low-end or fringe markets that seem unattractive to incumbents. By the time those markets mature, new entrants have already gained a foothold.
3. Focusing on ROI, ROA, Gross Margin
How it backfires:
Avoids low-margin innovation
Shuns uncertainty
Diverts capital away from long-term bets (e.g., manufacturing, R&D, new markets)
“Financial metrics like ROA may look scientific, but they systematically push companies away from innovation.” Clayton Christensen
So even if you see the change coming, there’s a good chance your organization still can’t move fast enough. Why? Let’s look at two more strengths that become liabilities.
4. A Culture Focused on Consistency and Quality
How it backfires:
Unproven ideas don’t get priority
Bureaucracy slows down response time
There are deeper issues here. For instance:
Hidden rules of the game: In many organizations, career advancement depends on delivering short-term, low-risk wins. That creates siloed thinking, discourages collaboration, and disincentivizes experimentation.
Fear of loss: Whether it’s fear of incompetence, status loss, or punishment for failure, anxiety around change runs deep. And it stalls innovation.
5. Optimized Processes
How it backfires:
Not built to handle new business models
Organizations become optimized for what they already do well. That’s great for sustaining innovation—but disastrous for disruptive innovation. Common culprits include:
Stable, stage-gated processes
ROI-driven decision-making
Long approval cycles
Lack of de-risking mindset
Skeptical, adversarial review culture
“The very processes that make companies good at sustaining innovations are the same ones that make them bad at disruptive innovation.” Clayton Christensen
Part 3: So What Can You Do?
This is ultimately a conversation about values.Values are the hidden forces behind decisions—what your organization rewards, what it punishes, and what it believes is “better.”
Often, you’re faced with a dilemma, like “Protect our short-term income stream” vs. “Invest in the long-term future.”
Both are legitimate. But they seem to pull in opposite directions. The challenge isn’t to choose one over the other—or settle for a compromise.The real trick is to reconcile the two: to find ways to secure today through investing in tomorrow.
Final Reflection
So, let me leave you with a question:
Which of these five classic strengths might be a hidden weakness in your organization today?
Listening to customers
Chasing big markets
Focusing on ROI, ROA, and gross margin
Prioritizing consistency and quality
Relying on optimized processes
Recognizing these dynamics is the first step to navigating change. The second step is being bold enough to act.
We’re in an era where disruption is no longer a one-time event—it’s a constant. How we lead, think, and adapt will define whether we simply survive… or shape the future.
Amsterdam, April 2025
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