As I mentioned in yesterday’s post, Clayton Christensen passed away recently. Five articles about him in today’s write-up, to honour the man, and his most popular and lasting contribution to theory.
The Innovator’s Dilemma is what most people know Clayton Christensen for, and the book is a great read. It is slow going, be warned, but the idea is remarkable. And that idea is the theory of disruption.
First, a quick recap of the idea: “Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality—frequently at a lower price. Incumbents, chasing higher profitability in more-demanding segments, tend not to respond vigorously. Entrants then move upmarket, delivering the performance that incumbents’ mainstream customers require, while preserving the advantages that drove their early success. When mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred.
As I said, most people know of The Innovator’s Dilemma, but there was another book – and theory – called The Innovator’s Solution. But where the second theory was concerned, Ben Thompson wasn’t so convinced.
Read the whole thing, but if I had to summarize the argument (always a dangerous thing to attempt), it’s this: there’s a world of a difference between B2B and B2C companies.
The excerpt below is from a fine profile of Clayton Christensen by Larissa MacFarquhar, and reading it (the entire thing) is recommended. You might also want to pair the excerpt with Thiel’s Christainity. At any rate, I was reminded of it.
Mormons believe that family is for eternity, and that in Heaven they will be together with their relatives as they were on earth. They believe that after death they will grow to resemble their heavenly parents as children grow to resemble earthly parents, until eventually they become gods.
Also from the New Yorker, a rather less complimentary piece about the efficacy of the theory of disruption:
Christensen has compared the theory of disruptive innovation to a theory of nature: the theory of evolution. But among the many differences between disruption and evolution is that the advocates of disruption have an affinity for circular arguments. If an established company doesn’t disrupt, it will fail, and if it fails it must be because it didn’t disrupt. When a startup fails, that’s a success, since epidemic failure is a hallmark of disruptive innovation.
Joshua Gans writes in his honour, upon his passing, and the link is here.
And finally, I found this advice from an essay written by Clayton Christensen very useful indeed – and of course, the rest of the essay is also very well written!
In using this model to address the question, How can I be sure that my family becomes an enduring source of happiness?, my students quickly see that the simplest tools that parents can wield to elicit cooperation from children are power tools. But there comes a point during the teen years when power tools no longer work. At that point parents start wishing that they had begun working with their children at a very young age to build a culture at home in which children instinctively behave respectfully toward one another, obey their parents, and choose the right thing to do. Families have cultures, just as companies do. Those cultures can be built consciously or evolve inadvertently.
EconForEverybody 