A reader’s guide to Clay Christensen and disruptive innovation

[cross posted at FASTforward blog]

A dozen years ago, at the height of the dotcom boom, Harvard Business School professor Clay Christensen published The Innovator’s Dilemma. It started from a simple observation that transformative innovations that reshaped competitive landscapes and created new industries almost invariable came from new organizations. Conventional wisdom held that this was a reflection of poor management and decision making on the part of incumbents. Christensen started with a more interesting, and ultimately more productive, question. What if it was sound management practice on the part of incumbents that prevented them from investing in those innovations that went on to create new industries? This question and Christensen’s research led to his distinguishing disruptive vs. sustaining forms of innovation. I originally reviewed the book in the Spring 1998 issue of Context Magazine. It became the bible of consulting firms working in the dotcom space. Every proposed idea was labeled as disruptive. Who knows, some of those consultant’s might even have read the book.

Meanwhile, Christensen and his colleagues and collaborators continued to work out the ideas and implications of his emerging theoretical framework. The Innovator’s Dilemma was followed by

  • The Innovator’s Solution: Creating and Sustaining Successful Growth.

    In this book, Christensen begins to lay out how you can take the notions of disruptive innovation and use them to design a reasonable course of action in the absence of the kind of analytical data strategy consultants desire. Disruptive innovations attack either the lower ends of existing markets where there are customers willing to settle for less performance at less cost, or new markets where a new packaging and design of available technologies creates an alternative to non-consumption. The example I found easiest to understand here was Sony’s invention of the portable transistor radio. Compared to vacuum tube radios the first transistor radios were crappy, but good enough for teenagers and others on the go whose alternative was no music at all.

  •  Seeing What’s Next: Using Theories of Innovation to Predict Industry Change.

    In this third effort to work out the implications of distinguishing between sustaining and disruptive innovation, Christensen and his collaborators shift their attention from individual competitors to industry level analysis. They take their theoretical structures and apply them across several industry settings and ask how those particular industries (education, aviation, health care, semiconductors, and telecommunications) are more or less vulnerable to disruptive innovation strategies. What Christensen and colleagues are doing here is to begin integrating their innovation theories and Porter’s theories of competitive strategy. This is not so much a case of seeing whether their new theoretical hammer can pound strategy nails as it is of whether they are making progress in creating a new and robust toolkit for strategy problems.

  • The Innovator’s Guide to Growth: Putting Disruptive Innovation to Work, Anthony, Scott D.

    This volume is written by Scott Anthony and several other collaborators of Christensen who are putting his ideas to work at the consulting firm Innosight. They develop the next level of operational detail to transform strategic insights into execution details. If you re an organization seeking to develop its own disruptive strategy, the authors here have worked out the next level questions and identified the supporting analyses and design steps you would need to answer and complete. This volume is not a teaser; it s complete and coherent. You could pretty much take the book as a recipe and use it to develop your project plans. On the other hand, the plans by themselves won t guarantee that you can assemble a team with the necessary qualifications to execute the plan successfully. The other thing that this book does quite nicely is identify the kinds of organizational support structures and processes that you would want to put in place to institutionalize systematic disruptive innovation.

This core of books would equip you with a robust set of insights and practical techniques to begin thinking about when and where you might attempt to develop and deploy new products, services, and business models in disruptively innovative ways. The one area that is underdeveloped in this framework is that of design. There is an implicit bias in the material that tends to keep design in the "perform magic" category. I believe this is part and parcel of the general execution bias of business literature in general. Design is flaky, creative, stuff and real managers distinguish themselves on execution. But that is a topic for another post. These books belong on your shelf and the ideas belong in your toolkit.

Gary Hamel and innovations in management

The Future of Management, Hamel, Gary


Gary Hamel has been an astute observer of organizations and management for several decades now. For all the reasons that seemed to make sense at the time, this book sat on my shelf for a while before I got to it. Based on the current state of the economy, I suspect a number of executives who could have benefitted from Hamel’s insights also failed to get them in a timely fashion. Hamel’s central thesis is that management is a mature technology and is ripe for disruptive innovation. Although he makes only passing reference to Clay Christensen’s work, there are important points of linkage between these two management thinkers.

The underlying rationale behind management philosophy and practices was largely laid down in the early decades of the twentieth century during the growth and ascendancy of the large multi-divisional industrial organization. In other words, most managers continue to operate with the mindset and practices originally developed to handle the problems encountered by the railroads, GM, IBM, and the other organizations making up the Dow Jones average between 1930 and 1960. While we’ve experienced multiple innovations in products, technologies, services, and strategies, the basics of management have changed little. Here’s how Hamel puts it:

While a suddenly resurrected 1960s-era CEO would undoubtedly be amazed by the flexibility of today’s real-time supply chains, and the ability to provide 24/7 customer service, he or she would find a great many of today’s management rituals little changed from those that governed corporate life a generation or two ago. Hierarchies may have gotten flatter, but they haven’t disappeared. Frontline employees may be smarter and better trained, but they’re still expected to line up obediently behind executive decisions. Lower-level managers are still appointed by more senior managers. Strategy still gets set at the top. And the big calls are still made by people with big titles and even bigger salaries. there may be fewer middle managers on the payroll, but those that remain are doing what managers have always done–setting budgets, assigning tasks, reviewing performance, and cajoling their subordinates to do better. (p. 4)

Hamel sets out to explore what innovation in the practice of management would look like and how organizations and managers might tackle the problems of developing and deploying those innovations. I don’t think he gets all the way there, but the effort is worth following.

The first section of the book lays out the case for management innovation as compared to other forms. the second examines three organizations that Hamel considers worthy exemplars: Whole Foods, W.L. Gore, and Google. The last two section build a framework for how you might start doing managerial innovation within your own organization.

Hamel does a good job of extracting useful insights from the case examples he presents. Hamel’s own preference is for a managerial future that is less hierarchical and less mechanical. At the same time, he wants each of us to commit to doing managerial innovation for ourselves. This leaves him in a bit of a bind. I suspect that Hamel would like to be more prescriptive, but his position forces him to leave the prescription as an exercise for the reader. While I agree with Hamel that both individuals and organizations need to be formulating their own theories of management and experimenting on their own, this is not likely to happen in most organizations and particularly so in the current economic climate. Necessity is not the mother of invention; rather it forces us to cling to the safe and familiar. We need a degree of safety and a degree of slack to do the kinds of thinking and experimenting that will produce meaningful managerial innovations. I fear that may be hard to come by in the current environment; no matter how relevant or necessary.

What you can do in the interim is research and reflection to discover or define opportunities for possible managerial innovations. This book is one excellent starting point, but insufficient on its own.

Is this an agenda worth pursuing? What else would you recommend to move forward?