When a technology, regardless of how different and difficult it is, sustains the trajectory of performance improvement, my research asserts that the leaders in the prior generation of technology are likely to end up on top of their industry at the end of the transition.

How can you make sense of the future when you only have data about the past?

Because of the disruption phenomenon - technological progress outstripping the ability of customers to utilize it - the general tendency is for the money to migrate toward the subsystems.

It is a company's customers who effectively control what it can and cannot do.

There are more than 9,000 billing codes for individual procedures and units of care. But there is not a single billing code for patient adherence or improvement, or for helping patients stay well.

If a company truly wants to resolve the innovator's dilemma, it does need to be able to create wave after wave of disruptive innovation. And those disruptive innovations will typically grow to the point where they do cause some pain for leading companies. But most disruptive innovations create substantial new growth before they cause that pain.

It is when the product is not good enough that proprietary integration gives you a competitive edge. You cannot outsource and be competitively successful in this situation. But at the other end, where standard components assembled in standard ways can yield acceptable performance, you must outsource.