Success can be your greatest weakness.
The more a company refines its processes, optimizes its products, and satisfies its best customers, the more it risks missing the next big thing.
We’ve seen it repeatedly: Industry giants—dominant, well-resourced, and seemingly unstoppable—fall behind to newcomers who see what they don’t. Why? Established leaders focus on what’s working today, while disruption happens in spaces they’ve ignored.
The Dangerous Comfort of Sustaining Innovation
Most companies focus on sustaining innovation through incremental product and service improvements. They respond to customer feedback, optimize performance, and protect their market position.
This works—until it doesn’t.
Disruptors don’t compete head-on. Instead, they introduce more straightforward, more accessible solutions in overlooked markets. Their products might seem inferior at first, but they evolve fast. By the time incumbents notice, they have captured new customers, reshaped demand, and rewritten industry rules.
Modern Examples of the Innovator’s Dilemma
History is full of once-dominant companies that failed to adapt:
- Kodak: Invented digital photography but dismissed it to protect film sales.
- Blockbuster: Had the opportunity to acquire Netflix but clung to late fees and brick-and-mortar stores.
- Nokia: Dominated mobile phones but dismissed smartphones as a niche trend.
Now, we see similar patterns repeating:
- Big banks vs. FinTech startups—Traditional banks focus on existing customers, while digital-only banks simplify finance for new generations.
- Legacy software vs. SaaS disruptors—Old business models lock customers into contracts, while agile startups offer scalable, subscription-based solutions.
- Traditional automakers vs. Tesla & EV startups—While legacy companies debated the feasibility of electric vehicles, Tesla built a direct-to-consumer model and redefined expectations.
How to Avoid the Trap
So, how can today’s leaders ensure they aren’t blindsided by disruption?
- Look Beyond Your Core Customers – Your best customers may not represent your future customers. Pay attention to how non-customers solve problems differently.
- Create Space for Strategic Experimentation—Amazon built AWS before cloud computing became mainstream. Apple launched the iPhone when iPods were at their peak. Future-proof leaders invest in innovation outside their core business.
- Measure What’s Not Obvious – Traditional metrics focus on existing success. However, disruption often starts with new behaviors, emerging needs, and underserved markets. Pay attention to what seems small today but could scale tomorrow.
- Adopt a Dual-Mindset Leadership Approach – Maintain operational excellence while fostering a culture that embraces uncertainty and reinvention. This means challenging assumptions and asking: If we were starting today, would we build the same product?
Final Thought: Are You Playing Defense or Reinventing the Game?
If the next significant disruption were to occur in your industry, would you see it coming, or would you be too focused on optimizing what already exists?
Market leaders don’t fail because they lack intelligence, resources, or talent. They fail because they stop thinking like challengers.
What’s your take? Let’s discuss.