In today's world of new and convergent technologies, companies are facing many obstacles in their attempt to manage product and technology innovation. One such obstacle is cause for concern to many market leaders around the world. This obstacle, eloquently described as the "Innovator's Dilemma" by Harvard Business School Associate Professor Clayton Christensen, often acts as a roadblock to ongoing success as it inhibits firms from making timely strategic investments in new technologies.

Mr. Christensen points out that companies often fail to make investments in new technologies simply because they cannot produce financial justifications that support such investments. As a result, market leaders often forego these opportunities, leaving them to competitors and new start-ups. Such an opportunity, typically a technology that is initially unattractive to the broad market, finds its origin of interest in small, niche markets. Over time, as the technology becomes more mature and developed, the purveyor of the technology begins penetrating larger, more attractive markets - eventually attacking the market leader's mainstream customers.

In effect, the Innovator's Dilemma stems from the intrinsic approach that market leaders and other firms use to manage product and technology innovation. Companies, generating billions in revenue, can only meet their revenue growth objectives by investing in technologies and markets that generate hundreds of millions of dollars in revenue from the start. Technologies that do not show this immediate return are often discounted - left for others to pursue, regardless of their long-term potential. From a market leader's perspective, they are not worthy of investment, but these technologies are often quite attractive to smaller companies, as such firms are unburdened with growth constraints and willing to pursue smaller opportunities. This scenario can become the catalyst by which a firmly entrenched organization is driven out into the open and slain by a younger, more agile competitor.

The risk that the market leader faces by failing to make an investment in the right technology at the right time is that the firm may be opening the doors to a more flexible competitor who, over time, could develop the capability of toppling the firm. The evolution of these "disruptive" technologies can change the face of an industry as it gives rise to new market leaders. To make matters worse, disruptive technologies, armed with the power to tip the established scales of power, are presenting themselves at an ever-increasing pace. These technologies, which are disruptive to existing solutions and inflexible business models, can change the face of an entire industry - often in a way that is difficult for the market leader to defend. In today's Internet economy, threats exist in every industry. Market leaders have already fallen prey to disruptive technologies backed by well funded and well managed start-ups - quickly giving these technologies a level of maturity that makes them even more worrisome.

In the past, disruptive technologies were more easily foreseen and simpler to manage. Companies had the luxury of waiting to see if and when a technology would become worthy of investment - ensuring itself that the technology would be capable of sustaining the required returns. At the right time, the technology would be acquired by the market leader at a fair price. Today, in the world of inflated market capitalizations, we find that such an approach can be incredibly expensive - and destructive.

Innovation is moving far too fast for a market leader to play the waiting game. By the time a disruptive technology has made inroads into just a small segment of a market leader's domain, the challenging firm has often achieved a market capitalization that makes an acquisition extremely expensive - and often impossible. As a result, the market leader has no choice but to wait and see how it will be affected by the newcomer. It is reduced to taking a reactive approach to managing the situation, making belated investments of its own in what may be a futile attempt at redemption. If an established firm is not capable of making timely investments in new and disruptive technologies - knowing with a high degree of confidence which will deliver customer value - its fate will be sealed. The new economy has little room for mediocrity or lethargy. Speed, agility and the ability to manage innovation are the traits of tomorrow’s successful companies.

In order to avoid the destructive fate of the Innovator's Dilemma, a market leader must be able to assess the impact that a technology will have on its markets - and know what potential value the technology will unleash. It must know which target markets will initially find the technology attractive and use those markets as a point for market entry. It must know how to systematically evolve the technology over time to address the needs of the broad market - systematically controlling segment expansion. Achieving these fundamental objectives, to many firms, is like landing a spacecraft on a distant planet - technically possible, but riddled with obstacles. Fortunately, these obstacles can be overcome, paving the way for new insights into the future of managing innovation.

When an organization learns to master these skills, it will find that choosing whether or not to invest in a new technology becomes elementary. With theses skills, firms will have the data required to make sound justifications, a basis for ensuring cross-functional agreement and the ability to move forward with a level of confidence that makes sleeping a bit easier. Only valued technologies, potentially disruptive to the organization’s longevity, will be pursued - and the reasons for passing on others will be understood.

The Innovator’s Dilemma is a powerful and complex nemesis capable of mighty repercussions to those who face it unarmed. On the other hand, those who learn to manage innovation, and embrace its ever-changing face with open arms, will find that this dilemma, in reality, is not a dilemma at all. The practical solution to the Innovator’s Dilemma is as simple as they come – avoid it. As a great martial art master once described the ultimate defense, "the best way to defend against a fatal and seemingly invincible foe is to simply not be there when the attack is made." Each day is bringing us closer to a world where innovation moves as fast as thought - making it a seemingly more invincible foe. Organizations that develop the skills required to manage this dilemma will see it coming and manage it effectively - surviving the onslaught and overcoming a situation that will devastate others.

Before a disruptive technology is threatening the organization, it must look for the answers that will turn a potential threat into an opportunity. It must thwart the efforts of those who are attempting to plan its demise. The future is yet unshaped, thus a company can shape it any way it wants, but there is a catch - it has to be the first to get there.