Our friend Nicholas “IT Doesn’t Matter” Carr has written a wonderful essay on top-down innovation – the anti-thesis to Clayton Christensen’s Innovator’s Dilemma.
Carr tells us that top-down disruptive innovations actually outperform existing products when they’re introduced, and they sell for a premium price rather than at a discount.
Exhibit A: Apple’s iPod. Writes Carr: “The iPod upped the performance stakes immensely. By using a tiny hard drive to store music, it allowed people to carry hundreds, even thousands, of songs with them at all times. Its price, starting at $399, was equally eye-opening — the price of a mid-range component stereo system.”
Good point.
The article definitely make you think that there is some benefit (profit) to providing high-end products. So why are so few companies doing it?
Because to compete on quality is much more difficult than competing on cost. For one, it takes imagination. And even more important, it takes execution. And that takes good leadership. Would Apple be succeeding without Jobs? Look what happened to Apple when they had that guy from Pepsi running it. Almost destoyed the company.
So it’s not that easy. But top-down innovation can be done. The question is: can it be sustained?