The Innovator's Dilemma Continues

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Clay Christensen has died. Debate about his theories should live on.

His concept of disruptive innovation is a brilliant encapsulation of the role of unexpected effects on markets and businesses, often driven by technology innovation.

Applied within narrow constraints, it effectively describes instances in which businesses that dominate markets don’t feel threatened by a product or service that seems inferior, but which meet the needs of customers only faster, cheaper, more reliably, etc. When ignored in lieu of doing whatever it is that incumbents think they do best, these innovations will subsequently enable challenger companies to replace them.

It is a far more useful expression of Donald Rumsfeld’s notorious description of the risk of unknown unknowns. Business leaders need pull their collective heads out of the sand and strive to understand what is really going on.

But his theories have proven difficult to put into practice.

I know this since my consultancy works around the world with large B2B firms to help communicate their innovation, and what appears clearly disruptive in hindsight isn’t so obvious when looking forward; in fact, one could argue that whatever shows up on a company’s radar as a potential threat is no longer the most important threat because it has been identified. Competing businesses tend to see the same things on their radar screens.

Also, it sort of states the obvious, which is that every company will get disrupted at some point in time. Determining when, let alone how, is really hard.

So Christensen’s insights, first shared in the late 1990s, encouraged the creation of endless innovation programs, departments, and startup incubators, often led by artsy-looking executives who came from management consulting backgrounds with slide presentations about planning for the unplannable.

They inspired a generation of young people who might otherwise have found gainful employ learning real skills at real companies to rent chairs at communal workspaces and dream of replacing them instead.

Disruptive innovation became commodified and mainstream.

Christensen was uncomfortable with the varied and sometimes strained definitions and applications of his thinking. He also constantly challenged, iterated, and refined it as he gathered more data and ruminated on his conclusions. 

One attribute that needed to be reimagined was his belief that incumbent businesses were wrong in focusing on vertical integration, which is a traditional way for companies to improve margins by taking costs out of production once they dominate a market (vs. constantly innovating).

It turns out that today’s data-driven companies only get stronger by throwing up barriers to entry that would-be disruptors can’t overcome (or collecting enough cash so they can simply buy any of those contenders once they pop onto their radar screens).

Add the effects of AI and corporate management of productivity as a capital asset vs. labor cost and we could be looking at the game-ending game-changer.

Christensen was open to disrupting his own theories, and that’s why his impact was immense: He succeeded in getting many leading CEOs to disrupt their approach to leadership, too, and their application of his thinking…however imperfect…helped create new value for their stakeholders.

He was a deep thinker and, from the media reports on his passing, a sincerely good and faithful guy. I met him briefly once at an event and I remember him smiling broadly as he shook my hand (and towering like two feet above me!).

His life was cut unfairly short.

My hope is that he won’t be remembered for codifying the concept of disruptive innovation; rather, we should look to his incessant and humble curiosity and openess to change as we face the dilemma of what it means going forward:

Clay Christensen was a disruptive innovator.

Read the original post by Jonathan Salem Baskin here.