Michael Porter, a professor at the Harvard Business School. The scholar who in some respects became his successor, Clayton M. Christensen, entered a doctoral program at the Harvard Business School in 1989 and joined the faculty in 1992. Christensen was interested in why companies fail. In his 1997 book, “The Innovator’s Dilemma,” he argued that, very often, it isn’t because their executives made bad decisions but because they made good good decisions, the same kind of good decisions that had made those companies successful for decades. (The “innovator’s dilemma” is that “doing the right thing is the wrong thing.”)
Christensen called “disruptive innovation”: the selling of a cheaper, poorer-quality product that initially reaches less profitable customers but eventually takes over and devours an entire industry.
Christensen has co-written books urging disruptive innovation in higher education (“The Innovative University”), public schools (“Disrupting Class”), and health care (“The Innovator’s Prescription”).
Startups are ruthless and leaderless and unrestrained, and they seem so tiny and powerless, until you realize, but only after it’s too late, that they’re devastatingly dangerous: Bang! Ka-boom! Think of it this way: the Times is a nation-state; BuzzFeed is stateless. Disruptive innovation is competitive strategy for an age seized by terror.
Replacing “progress” with “innovation” skirts the question of whether a novelty is an improvement: the world may not be getting better and better but our devices are getting newer and newer.
The word “innovate”—to make new—used to have chiefly negative connotations: it signified excessive novelty, without purpose or end.
Joseph Schumpeter, in his landmark study of business cycles, used the word to mean bringing new products to market, a usage that spread slowly, and only in the specialized literatures of economics and business.
Disruptive innovation can reliably be seen only after the fact.
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.
Like the bursting of the dot-com bubble, the meltdown didn’t dim the fervor for disruption; instead, it fuelled it, because these products of disruption contributed to the panic on which the theory of disruption thrives.
People aren’t disk drives. Public schools, colleges and universities, churches, museums, and many hospitals, all of which have been subjected to disruptive innovation, have revenues and expenses and infrastructures, but they aren’t industries in the same way that manufacturers of hard-disk drives or truck engines or drygoods are industries. Journalism isn’t an industry in that sense, either.
Historically, institutions like museums, hospitals, schools, and universities have been supported by patronage, donations made by individuals or funding from church or state. The press has generally supported itself by charging subscribers and selling advertising. (Underwriting by corporations and foundations is a funding source of more recent vintage.) Charging for admission, membership, subscriptions and, for some, earning profits are similarities these institutions have with businesses. Still, that doesn’t make them industries, which turn things into commodities and sell them for gain.
Christensen and Eyring’s recommendations for the disruption of the modern university include a “mix of face-to-face and online learning.” The publication of “The Innovative University,” in 2011, contributed to a frenzy for Massive Open Online Courses, or moocs, at colleges and universities across the country, including a collaboration between Harvard and M.I.T., which was announced in May of 2012. Shortly afterward, the University of Virginia’s panicked board of trustees attempted to fire the president, charging her with jeopardizing the institution’s future by failing to disruptively innovate with sufficient speed;
more on Clayton Christensen in this IMS blog
Here are four key things to remember when assessing whether the next new company is likely to disrupt your business:
These differences are laid out in Disruptive Strategy with Clayton Christensen. Low-end disruption refers to businesses that come in at the bottom of the market and serve customers in a way that is “good enough.”
When innovative new products or services – iPhone, Tesla’s electric cars, Uber, and the like – launch and grab the attention of the press and consumers, do they qualify as disruptors in their industries? Writing in Harvard Business Review, Christensen cautions us that it takes time to determine whether an innovator’s business model will succeed.
If you are a current incumbent and want to be on the lookout for a possibly disruptive emerging business, the clarification of what disruption is certainly helps.
more on disruption in this IMS blog