“When i die and they’re going to interview me outside of heaven to decide whether…to let me in,” Clayton Christensen once told an Economist conference, “I’m going to start by saying ‘I’ve got some questions for you first’.” Mr Christensen, who died of leukaemia on January 23rd, aged 67, was endlessly seeking answers. The most important, to the question “why do great firms fail?”, inspired “The Innovator’s Dilemma”. The book, published in 1997, popularised the idea of disruptive innovation. It made the Harvard Business School professor the most influential management thinker of his time.
He disliked the term “guru”. It sat awkwardly with him, as he sat awkwardly on stage: a lanky two-metre-tall Mormon who laced conversations with exclamations like “Holy Cow!” and knotted his fingers together as if trying to stop his enthusiasm from bounding out. He was the antithesis of Silicon Valley’s self-promoters who, often in his name, turned innovation and disruption into the most overhyped words in business. Still, unlike most management theories, which live and die like fruit flies, his will outlast him.
Its compelling simplicity caught the zeitgeist just as the disruptive power of the internet was taking hold. It was not wholly new. As management thought goes, disruptive innovation is no double-entry book-keeping, or even Joseph Schumpeter’s “creative destruction” (on which it was partly built). But it has stood the test of time so far. In a pleasing symmetry, a business insight that grew from research on, among other things, the impact of mini-mills on the steel industry would apply generations later to the impact Harry’s razors are having on an incumbent brand like Gillette.
In a nutshell, Mr Christensen’s insight was that it is not stupidity that prevents great firms from foreseeing disruption but rather their supreme rationality. They do “the right thing”, focusing on better products for their best and most profitable clients, often to the point of over-engineering (how many Mach and Fusion blades does a chin need?). But that is “the wrong thing” if it blinds them to the threat from poorly capitalised upstarts offering cheaper stuff in markets too obscure to worry about. Such threats can swiftly turn existential if the rivals move upmarket and go for the jugular.
At the time the insight was radical. To business schools it had seemed obvious that big firms had the resources, the labs and the boffins to out-innovate anyone. “The Innovator’s Dilemma” challenged that complacency. It was also inspirational. It gave startups the confidence to believe that even the best-run incumbents could be overthrown. That may be why Apple’s Steve Jobs and Amazon’s Jeff Bezos were fans—and, once they disrupted their markets, why they stayed eternally vigilant, even paranoid.
Mr Christensen had his critics. One historian at Harvard University, Jill Lepore, wrote a New Yorker article in 2014 lamenting the Christensen-inspired “blow things up” style of disruption spreading through corporations, schools, universities, hospitals and newspapers. She also said some evidence from the industries he had studied did not support his claims.
“Mr Disrupter”, as his colleagues called him, did himself no favours by sometimes acting as if he had a monopoly on disruptive wisdom. Even devotees such as Ben Thompson of Stratechery, a tech newsletter, point out that for years Mr Christensen shrugged off Apple’s iPhone as just a fancy mobile phone, because it did not neatly fit his notion of disruption as a frugal, bottom-up process (he later conceded it perhaps disrupted the laptop). He felt the same way about Tesla, which he once brushed off as a luxurious irrelevance, and Uber, which started off neither more bare-bones nor cheaper than taxis. Both may end up rocking the car industry. The internet has made it easier to provide both the high end and low end of the market with superior services at the same cost.
Look around, though, and signs of disruptive innovation are widespread. In India Mukesh Ambani’s Jio, a mobile network offering cheap, high-speed data, has upended the telecoms market—albeit with oodles of cash from Reliance Industries, India’s most valuable company. In America, e-commerce-enabled, direct-to-consumer brands, from razors (Harry’s) to eyewear (Warby Parker) to mattresses (too many to name), are giving traditional retailers sleepless nights.
The difference is how incumbents are responding, guided by Mr Christensen’s counsel. Richard Lyons of the University of California, Berkeley, calls it “the disruption risk-management system”. Some big firms buy up the competition before it hurts them, as Google did with YouTube, Facebook did with Instagram and WhatsApp, ExxonMobil did with xto, a fracking firm, and Danone did with non-dairy brands such as Alpro. Some take stakes in potential disrupters to keep an eye on them: gm invested in Lyft, now a listed ride-sharing company, and two other carmakers, Daimler and Geely, have taken stakes in flying-taxi firms. Others, such as Apple, have managed to disrupt themselves from within.
A towering figure
Some of the defining business trends of the past decade are, in other words, infused with Christensenian thinking, which has itself gone from disruptive to ubiquitous. In other ways, however, Mr Christensen remained an iconoclast. He was scathing about data’s ballyhooed ability to predict the future. When he arrived at heaven’s gate, he said, one of his first questions to St Peter would be: “Why did you only make data available about the past?” He was wary of accepted measures of success, such as fame. Life, he insisted, should be judged by the impact it has on individuals; at its best management could be “the most noble of professions”, but only if it assisted others in learning and growing. And he preferred not to give answers, but to help people work things out for themselves. The concept of disruptive innovation was just such a pedagogic aid—and an elegant one. Mr Lyons speaks for many when he says “We will always remember the beauty.”