Here is a brief excerpt from an article by Clayton Christensen that originally appeared in Harvard Business Review (June 2014), The Capitalist’s Dilemma, and was selected by the HBR Editors to be included in HBR’s 10 Must Reads 2015: The Definitive Management Ideas of the Year from Harvard Business Review, published by Harvard Business Review Press (2015).
“Why do companies in vest primarily in efficiency innovations, which eliminate jobs, rather than market-creating innovations, which generate them? A big part of the answer lies in an unexamined economic assumption. The assumption — which has risen almost to the level of religion — is that corporate performance should be focused on, and measured by, how efficiently capital is used. This belief has an extraordinary impact on how both investors and managers assess opportunities. And it’s at the root of what we call the capitalist’s dilemma.“
How to resolve it? Christensen shares his thoughts about that in the article.
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Christensen is the Kim B. Clark Professor of Business Administration at Harvard Business School and author of numerous books and articles. To learn about him and his work, please click here.