LDS Business Guru Tells Companies to Cannibalize Themselves (Internet defense strategy: Cannibalize yourself)
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LDS Business Guru Tells Companies to Cannibalize Themselves (Internet defense strategy: Cannibalize yourself)

LDS business professor Clayton Christensen, who teaches at Harvard Business School, is currently one of the hottest speakers in the consultancy world. But Christensen's advice seems strange at first glance. He calls his advice 'survival by suicide.'

Christensen left a career in a high-tech business at age 38 to persue a doctorate in management. Drawing on his own background in high tech, Christensen started looking at the success rates of innovative companies. He was surprised to find that when industry leaders produced significant innovations, they were never able to capitalize on them. In fact, the new technologies eventually led to the failure of these same firms.

Christensen studied the issue and published his findings in a 1997 book, "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail." In the book, Christensen says that the reason that large firms fail to gain from new technologies is that they are not willing to cannibalize themselves -- they keep the new technology from stealing sales from their older business.

This Fortune article gives a background for how companies are using Christensen's advice today and points to Charles Schwab &Co. as a preliminary example of a company that successfully cannibalized its own sales in introducing new technology.