Feature
Disruption has been one of the most pervasive buzzwords of the past few years. And now it's become even more ubiquitous, thanks to debate between Harvard historian Jill Lepore and Clayton Christensen — the Harvard Business School professor who coined the term "disruptive innovation" more than a decade ago.
In a controversial article published by The New Yorker, Lepore made an unprecedented accusation against the quality of Christensen's research. Lepore accused Christensen of cherry-picking industries to force data to fit into his theoretical model.
The theory maintains that established companies are vulnerable to upstarts who find ways to do things cheaper, often with a new technology. In Christensen's words, "As companies tend to innovate faster than their customers’ needs evolve, most organizations eventually end up producing products or services that are actually too sophisticated, too expensive, and too complicated for many customers in their market."
At that point, an aggressive start-up with a cheaper, simpler product can topple an industry leader. You can get a more complete explanation here — and see how rapidly the phrase disruptive innovation has saturated business conversations by looking at the chart below. In the past three years alone, there has been a flurry of books, reports, speeches, conferences ... all centered around the idea of technological disruption.
Just this week, the CTO Forum, an organization for senior technology executives and business leaders, released a complimentary e-book titled "Rethink Disruption." Focused on emerging technologies that are "truly transforming business and society," you can download it here.
The e-book notes: "Disruptive technologies cut both ways. They propel their creators to the forefront of their markets and can quickly topple incumbents that didn't see them coming." Don't try to tell that to Lepore.
So back to the debate. Christensen claimed Lepore had quoted "evidence" out of context, without taking into account all the other research that had been carried out since publication of his1997 book, "The Innovator’s Dilemma."
We decided to add a little more fuel to the already blazing fire over disruptive innovation by getting input from four industry thought leaders.
The Question
Is disruptive innovation a passing fad or a useful concept to guide managerial decisions? Or, as one of our respondents so elegantly asked, "Is disruptive innovation crossing the chasm or jumping the shark?"
The Answers
Jeff Dachis, Chief Evangelist, Sprinklr
Considered one of the pioneers in the development of the World Wide Web, Dachis has been involved in the creation of the first banner ad, the creation of the first web animation and has digital work exhibited as part of the San Francisco Museum of Modern Art's permanent collection. He is currently serving as an advisor and Chief Evangelist at Sprinklr, a social experience management platform that recently purchased Dachis Group. As the founder, CEO and Chairman of Dachis Group, he helped coin the term "Social Business" and led the company’s growth to more than 240 people with $40 million in revenue. He is also the co-founder, former CEO and chairman of Razorfish, the world's largest digital marketing solutions firm. Tweet to Jeff Dachis.
Whether or not you use Christensen's definition as a guide or as gospel, with all popular clichés aside, a company's longevity and success in the marketplace depends on it.
Some portion of a modern company manager's time has to be devoted to thinking about and understanding not only where things are at, but also where they are going.Too many companies do too little of this and suffer the consequences. The average life expectancy of an S&P 500 company is under 20 years.The challenges in not questioning the status quo and not structuring management planning efforts to address the disrupted future are large.However, reimagining the business landscape and successfully navigating transitions mean to the victor go the spoils.
It seems like Lepore's criticism has more to do with negative feelings about the meme, trend or fad that disruptive innovation may have become and more pointedly the specific case studies Christensen used, than with the idea that disruptive innovation is occurring and that companies face unprecedented challenges from asymmetric warfare from unexpected challengers as industries re-define themselves in new contexts. She rightfully points out that the rearview mirror is an accurate predictor of success or failure in deciding the winners or losers of which innovations disrupt. However that does not mean that a company's managers should have their heads in the sand, live quarter by quarter and fail to address the future as an opportunity to lead.
Brian Solis, Principal Analyst, Altimeter Group
Living in Silicon Valley, the word disruption is heard as often as “please” and “thank you.”I’m exaggerating of course, but in all seriousness, there’s an unsaid belief in the technology businesses that all innovation is potentially disruptive. At the same time, almost every tech entrepreneur, investor or executive that I’ve worked with has quoted Clay Christensen’s model of “Disruptive Innovation” as much as Geoffrey Moore’s “Crossing the Chasm.”
I’m not sure of Jill Lepore’s motivation to revisit Christensen’s 1997 work. Perhaps like many, she’s tired of people using or misusing the word disruption. Maybe, she’s simply causing a stir to draw attention to herself. Either way, many people in Silicon Valley, I guess everywhere, generalize Christensen’s model and confuse the differences between creativity, innovation and disruption. Certainly, I’ve noticed the interchangeable use of those these words ad nauseam.
What’s the difference?
Creativity is the use of the imagination or original ideas in the production of an artistic work or work where creativity is usually not part of the equation.
Innovation is something original and new that "breaks into" a market or society.
Disruption … disrupts markets and introduces new direction and changes behavior. In this sense disruption is an effect.
I work with a commercial b2b and b2c insurance provider that is taking an innovative approach to disruption … word choice intended. It believes that to disrupt markets it must start by disrupting its own business. It is setting out to do what the New York Times apparently is not doing, and that is investing in technology and the companies that are setting out to defeat it. Doing so is counter intuitive for some but also one way to ensure long-term relevance.
Christensen’s work, for better or for worse, is beyond reproach at this point.Most who cite his work can’t even define it accurately. But it is in the spirit of progress to innovate, disrupt and even cause disruptive innovation that fuels ideas not only in Silicon Valley but also around the world.
Howard Yu, Professor, IMD
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Theories are often treated as fad. Consultants, managers and executives are all too eager to learn about the next big thing and then try to use one single concept to explain everything. When enthusiasm grows too big, someone, somewhere will inevitably become discontent and start trying to poke holes in the thinking and then declare the entire concept as invalid.
Enthusiasm wanes and the public moves on to the next big hunt — in search for another idea that can explain everything, again.
After the initial articulation of Christensen's work, a stream of doctoral students worldwide advanced the concepts and examined their applicability in different organizational contexts outside the technology sector, from family business to non-profits. Findings have been published in peer-reviewed academic journals, teaching materials and many books.
Many observers think that recent research from business schools bears less and less relevance for practicing managers. This is indeed unfortunate.
The theory of disruptive innovation is among the few occasions where rigorous research surprisingly finds its way into mainstream business, guiding managers to make day-to-day decisions. The danger of the current debate is that it might mislead managers into thinking that the concept of disruptive innovation is no longer "hot."
Rather than working through the issues and advancing our knowledge further as would be done in the field of medicine, engineering and physics, those who agree with arguments like Jill Lepore's risk throwing up their hands and moving on to the next big thing. That would be huge loss to everyone.
Frank Sowa, Founder and CEO, The Xavier Group
Sowa describes himself as a "creative leader, IT pioneer, strategist, entrepreneur, organizational consultant, a systems thinker, scientist, engineer and a leading consulting futurist." He is the founder andCEO of The Xavier Group, Ltd., a 34 year-old Pittsburgh, Pa.-based strategy consulting firm has helped more than 350 business start-ups with their strategies, and numerous more companies with creative approaches and disruptive innovations for new products and services. Formerly, he was a director developing start-up strategies and new products/services ideas at Apple, FedEx Ground, Davy McKee and Davison. Message Frank Sowa on LinkedIn.
Managerial decisions demand “strategies” that can align themselves with an ever-changing environment. Managerial decisions demand “tactics” that can sustain productive stability and continuity even in uncertain times.
The dominant idea of strategy began with Porter’s work in the '70s — that success consists of establishing a unique competitive position, sustained for long periods of time. Christensen’s research of business strategy in the '90s found that businesses fail most often not because they weren’t doing their best at sustaining a unique competitive position, but because they were following established practices.
What caused their failure, Christensen said, was when the firm encountered a disruptive innovation. Christensen’s updated approach advanced thinking about strategy and managerial decisions because it recognized the impact of disruptive innovation in changing the organizational environment. That is relevant in business models because everything operates on an organizational environment platform. It is relevant in decision-making because a disruptive innovation is magnified by product/service cycle times which have been reduced from 20 years in the ’70s to just 14 weeks in 2014.
Rita Gunther McGrath, professor at Columbia Business School goes further than Christensen. She states, “Because of the high-velocity of change today, achieving a sustainable competitive edge is nearly impossible.”
She says businesses “need to embrace the notion of transient advantage instead, learning to launch new strategic initiatives again and again, and creating a portfolio of advantages that can be built quickly and abandoned just as rapidly. Thus, success will require a new set of operational capabilities to drive management decisions.”
It appears to me that concepts of strategy, tactics (initiatives) and innovation are evolving to better synchronize with environmental change. Thus, being able to anticipate how a “disruptor” will affect your organization seems to be wise.
Finally, in regard to Lepore’s opposition, when she says organizations transfixed by change are blind to continuity — I feel you could just as easily say: “An organization transfixed by continuity is blind to disruptors and change.”
Because continuity is driven by tactical decisions, you can take corrective actions and get back on track. Because change is driven by external happenstance, not being aware of it for the sake of continuity is paving a clear road to operating dangerously.
