The Innovator's Dilemma is a great book by Clayton M. Christensen. The central theme of the book is that unless specific measures are taken, disruptive innovation causes highly successful businesses to fail. This is not because they are badly managed or are technically incompetent, but because they get pressurized by their existing customers and investors to not commit the resources to the innovation. The markets for disruptive innovation are emerging, low margin, unpredictable and can not contribute substantially to the bottom line of large companies. It also becomes a conflict of values problem for the current cash-cow products and the new innovation. The solution is to form a completely new organization with new management and values and let it grow and gradually shift focus to the new organization.

The book also gives good examples of Computer systems manufactures - mainframe to minicomputers to personal desktop systems, Printer manufacturers - Dot-Matrix vs Laser vs inkjet, Departmental stores to Discount stores.

A very good read.

Update: (2005/06/27) [Here is a link to IT conversation talk with Clayton Christensen](http://www.itconversations.com/shows/detail135.html "IT Conversations")