Clay Christensen explains, defends ‘disruptive innovation’
Globe correspondent Jay Fitzgerald emailed Harvard Business School professor Clay Christensen several questions about his theory of disruptive innovation and recent criticisms of it, including an article publised in MIT Sloan Managment Review. Here are Christensen’s responses.
Q: Have you read the MIT Sloan Management Review article and, if so, what are your thoughts on it?
A: Yes, I have seen the article. When I first heard from the editor of the Sloan Management Review that there was going to be an article on disruption, I was excited because it was nice to hear of other scholars investing effort into researching disruptive innovation. I think the article had great ambitions for what it initially set out to achieve, but due to a number of flaws it ultimately fell short of those goals and the potentially useful contribution it could have made.
Despite the fact that the study conducted a number of interviews for this article, I felt the rigor of their research was greatly lacking. If you look at what they actually did with their study—79 interviews on 77 industries—they essentially only interviewed one person for each industry. In contrast, during our research of the disk drive industry, for example, we interviewed over 50 industry experts and employees and read every single article written about the industry over the period of our study.
When researching the steel industry, we not only interviewed over 25 industry experts and employees, but we also carefully studied industry-wide production data to understand what was happening in that industry. Overall, for each of the industries we research, we have always sought to interview multiple industry experts and executives to ensure that our research isn’t limited or biased by the personal opinion of a single interviewee.
A second concern I have with the article is that it doesn’t demonstrate a thorough understanding of how disruption plays out in different industries. Our research over the years has shown that due to inherent differences between industries, the process of disruption plays out somewhat differently in each case. Going back to the steel industry, the process of disruption has taken more than 30 years for minimills to equal the revenue of the integrated mills, whereas the process of disruption took about 15 years to happen in the computer industry. Given those differences in speed alone, in addition to many other differences between the two industries, the minutiae of how disruption will occur will naturally be different.
Likewise, over the years we have shown in our study of disruption in education (“Disrupting Class, 2008”) and the health care industry (“The Innovator’s Prescription,” 2008) that even though the performance metrics of non-profit organizations are focused on factors other than shareholder value, the phenomenon of disruption can still occur within those industries, but each in their own way. This kind of nuance is lacking in the SMR article.
Finally, the article claims to test the usefulness of the theory of disruption, but it doesn’t actually do that. Instead, the article provides a flawed test (for the reasons mentioned above) of a different question: do the examples cited in “The Innovator’s Solution” fit the criteria of disruption innovation, as laid out in the [Sloan Management Review] article. Based on this faulty test, the article then makes a logical leap to question the usefulness of the theory.
Even if one agreed with the article’s methodology (which we don’t), then one could still only claim that some of the cited examples aren’t good examples of disruption—not that the theory itself is inadequate or not useful. It’s like an instructor using an illustration to teach a math concept and someone else saying, “That isn’t a good example of the concept, so the math concept isn’t true or useful.”
Q: I understand you did meet with the main author of the MIT article, Andrew King, before its publication and I understand you both agreed not to disclose details of that meeting’s discussion. But can you just generally tell me if you mutually disagreed about King’s findings and did you express that to him?
A: Andy King and I met and had a good conversation about a number of things related to disruptive innovation, but he never told me about the existence of the [Sloan Management Review] article. King has always been uncomfortable with the theory. So, we talked about that. Despite some publicly critical things he has said about my research, this was the first time he actually ever met with me about my research.
Q: You’ve said previously that critics of Disruptive Theory don’t seem to understand that the theory, like all theories, has gone through evolutions over the years. Can you expand on the idea that your theory and other theories evolve over time?
A: Most management and scientific theories used today have evolved in some fashion from the time they were initially introduced. Our understanding of the theory of evolution, for example, is somewhat different today from when Charles Darwin first published “On the Origin of Species.” The fact that the theory of evolution has evolved over time doesn’t mean that it’s a bad theory; it just means that we’ve learned more about the phenomenon of evolution over the years and have improved the theory of evolution to account for our new knowledge.
Another example from the business world is Benjamin Graham’s theory of value investing. His research and theories of investment in the 1930s and 1940s laid much of the intellectual foundation for how investors think today. As time has passed, of course we have learned more about how value investing operates, as well as its limitations, but just because our knowledge on the subject has evolved doesn’t invalidate the theory of value investing altogether or Graham’s contributions altogether – it just means we know more about it and are better off because of it.
Over the last 20 years, we’ve spent hundreds and hundreds of hours with people bringing anomalies to our attention and using them to refine the theory. As a result the theory has become even more detailed and precise. For example, we’ve spent a lot of time thinking about what types of technology are required to enable disruption. This has helped us understand why disruption has occurred in some industries but not others. We now better understand the conditions under which disruption is most likely to occur, and when disruption is less likely to be a threat.
But even as we have made these refinements, some have not made the effort to stay up-to-date on my research. For example, the New Yorker article last year was based on the author having only read my first book (“The Innovator’s Dilemma”) and not my subsequent research that demonstrated an improved understanding of disruption. As a result, much of the New Yorker article was based on outdated research.
Q: You’ve also previously expressed some regrets about using the phrase “disruptive innovation” to describe your theory. Can you expand on that too?
A: The word disruption has many connotations in the English language. I just didn’t realize how that would create such a wide misapplication of the word “disruption” into things that I never meant it to be applied to. In 1998, the Academy of Management meetings were held in Silicon Valley and the keynote speaker was Andy Grove, then Chairman of Intel. The very first slide in his presentation was about the theory of disruption. During his presentation, Grove said: “We’re not calling it ‘Disruptive Innovation,’ we’re calling it the ‘Christensen Effect.’” They were doing this to be more precise in their language, because they found the term “disruption” to be too broad and easily misapplied. I just couldn’t ever get comfortable with naming the theory after myself. But in retrospect, I wish I had had the wisdom to adopt Andy Grove’s insight and apply a different term that was even more precise and less likely to be misapplied by others.
Q: Has “disruptive innovation” almost become a victim, for lack of other words, of misinterpretations and distortions by other people over the years?
A: What I’ll say first is that there are some pretty spectacular success stories from individuals who have correctly sought to apply my research. Jeff Bezos, requires “The Innovator’s Solution” for their senior management team. Steve Jobs’ biographer said that the “Innovator’s Dilemma” “deeply influenced” Jobs. Southern New Hampshire University has achieved incredible growth, and their President, Paul LeBlanc, attributes much of their success to the theory.
Andy Grove credits my research as having been the main impetus for Intel introducing the Celeron processor back in the 1990s, and that was a tremendous success for their company. Over the past 20 years I’ve had the opportunity to speak with hundreds of other business executives who have likewise found the core ideas of disruptive innovation helpful to their business in some way or another.
But it’s true that the theory has been misunderstood and misapplied over the years, and there are some people who have a distorted view of what the research actually says and what it stands for. The New Yorker article was a clear example of this—in trying to critique disruption, the article applies the term “disruptive innovation” to things that aren’t at all disruptive – creating some clear logical problems with its own arguments.
Others have used the term to describe any kind of breakthrough innovation and change within an industry, most of which, in fact, are not actually disruptive innovations. To help address this, we have an upcoming article in Harvard Business Review where we discuss a number of other specific ways in which the term “disruptive innovation” has been misapplied, often at great peril.
Disruption is not a theory of everything. Most innovations that happen in the world are, in fact, not disruptive. My research on disruptive innovation explains only how the world works in a very specific set of circumstances.
Q: In general, do you still stand by the theory of disruptive innovation and why?
A: Of course I do. At the end of the day, the test of a theory is its usefulness, and many companies and executives have found disruption a powerful lens to help them respond to shifts in their industries.