The mistake managers often make is defining their industry too narrowly. Digital's market share in the minicomputer market stayed very robust even as it fell off the cliff. Disruption seems to come out of nowhere, but if you know what to look for, you can spot important developments well before the market does.

This is one of the innovator’s dilemmas: Blindly following the maxim that good managers should keep close to their customers can sometimes be a fatal mistake.

When product performance outstrips the ability of customers to use that performance in an industry, the competitive game changes. Under those circumstances you have to decouple components businesses from assembly businesses.

But actually theory is very practical. Gravity is a theory, for example. It allows you to predict that if you step off a cliff you will fall; you don't have to collect data on that.

If you study the root causes of business disasters, over and over you'll find this predisposition toward endeavors that offer immediate gratification.

Decide what you stand for. And then stand for it all the time.

The answer is the disruptive innovator, an outsider, who creates a product or service for the non-existing consumer in a non-existing market for almost no profit.