Innovator’s Dilemma pitfalls – and proven fixes

Clayton Christensen’s research shows that the very success factors of an established business can sabotage its next-wave bets. Below are the traps we see most often when companies try to diversify—and the playbook that breaks each one:

• Cannibal-phobia. Product GMs block a new digital line because it “steals” revenue from the cash cow.
  Fix: ring-fence the venture with its own P&L and growth KPIs wherever possible. When a unit keeps score on new revenue, leaders worry less about shaving a few points off the core book. (The Innovator's Dilemma - Wikipedia, How Companies Can Avoid the Innovator's Dilemma)
• Resource gravity. The new idea competes with BAU projects in the same budgeting meeting - so the high-margin core always wins.
  Fix: allocate a pre-committed “explore” fund (1-5 % of EBIT) that cannot be re-purposed for sustaining work. This is exactly how Amazon’s “future press” teams stay funded through lean quarters. (Clayton Christensen And The Innovators' Smackdown - Forbes)
• Shared-services quicksand. The venture is forced to use the mothership’s release cycle, security gates and procurement hoops—killing speed.
  Fix: give the spin-out autonomous ops (CI/CD pipeline, cloud budget, vendor freedom) for the first 12–18 months, then merge selectively once product-market fit is real. (The Innovator's Dilemma - Why Successful Companies struggle with Disruptive Innovation)
• Metrics mismatch. Exec dashboards compare the newborn SaaS line to the mature core on gross margin or CAC, making it look weak.
  Fix: track discovery-stage indicators—active pilots, weekly active users, retention—until the curve crosses 1,000 customers, then graduate to full financial lenses.
• Talent tug-of-war. High performers lent to the venture keep one eye on their promotion path back “home” and exit when ratings season starts.
  Fix: create a separate career lattice (equity, bonuses, visible GM roles) so the venture feels like a destination, not a secondment.
• Silent sabotage. Middle managers delay integrations or data-sharing that threaten their KPIs.
  Fix: elevate a C-suite sponsor who meets weekly with the venture lead, clears blockers in real time, and publishes those decisions company-wide to neutralise politics. (The Innovator's Dilemma - Medium)

Companies that institutionalise separate, protected teams with their own success metrics beat the innovator’s dilemma and turn AI-powered side bets into serious revenue.

That’s why Mindlace launches every diversification sprint as an autonomous squad, connected to the core only where it accelerates - not where it drags.

Ready to turn dormant expertise and data into new income lines? Book a discovery call with Mindlace.

Mindlace helps companies in seven key moments. See a summary of those moments here.