No universal law predicts the outcome of disruptive innovation

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Last week, I described the responses of music and book publishers to digital technology. The evolution of these industries illustrates the “innovator’s dilemma” of Harvard Business School professor Clayton Christensen. Established businesses experience difficulties in managing disruptive innovation.

Successful companies succeed, in part, through close attention to their customers, delivering incremental (and sustaining) innovations they want. Disruptive innovators leap ahead to produce what customers do not yet know they need. As Henry Ford observed, if he had consulted his customers they would have asked for a faster horse. Large organisations employ systems and individuals geared to the business models of the present, which may not be those of the future. Many people find it hard to distinguish between what they think will happen and what they wish to happen.

Prof Christensen’s thesis has come under attack, from an unexpected quarter; a piece in The New Yorker magazine by Harvard historian Jill Lepore. The debate has become vitriolic, with Prof Christensen accusing his opponent of a “criminal act of dishonesty”. The dispute recalls the comment of another Harvard professor, Henry Kissinger, that academic politics are so bitter because the stakes are so low.

Yet the stakes here are not negligible. Disruption is central to the vocabulary of corporate strategy directors. Silicon Valley trumpets the disruption of everything. But Prof Lepore is right to accuse Prof Christensen and his followers of excessive generalisation from selected examples. Even these – much of Prof Christensen’s initial book is devoted to disc drives and hydraulic excavators – do not unambiguously support his case.

Few people can have had experience of more than a small number of industries and companies. But far more is expected of consultants, professors and corporate saviours. The conventional practice of the business guru turns personal experience into panacea. The observation that some companies have succeeded by disrupting their industries, while others have failed because their business was disrupted, is reduced to the facile slogan “disrupt!”. The observation of a tendency – that large companies struggle with discontinuous change – is translated into a universal law. But few generalisations in business carry the wide-ranging validity of the laws of physics.

Which is not to say that there is not much to be learnt from careful observation and thoughtful inductive reasoning. Apple, both market leader and serial disrupter, directly challenges Prof Christensen’s thesis. The business guru predicted the iPhone would not succeed: now, he explains, it was disruptive after all; the market disrupted was for laptops rather than mobile phones. The use of hindsight to reformulate a question in such a way that it validates one’s original thesis is especially widespread among consultants and gurus. But an approach sufficiently loosely formulated that it can explain everything after the event actually explains nothing at all.

Apple is just an exception among large companies in that it has led disruptive innovation well. Several hundred million customers understood that, even if the truth was not so obvious at Harvard Business School. Apple’s success invites analysis of the extent to which that outcome was the result of the genius of its co-founder Steve Jobs, the distinctive capabilities of its organisation or simply luck – and poses the question of whether Apple can maintain its innovative capacity when it is the world’s most valuable company but no longer has a charismatic leader. That is a more interesting question than whether Digital Equipment Corporation’s minicomputers disrupted the mainframe market, or were disrupted by personal computers.

So who wins this argument? There are few business books that meet the style standards of The New Yorker, and Prof Christensen’s works are not among them. If the test is cogency and readability, Prof Lepore wins hands down. Her polemic correctly identifies the overblown and often tautological status of the claims of Prof Christensen and his followers. But Prof Christensen’s original argument, and Prof Lepore’s response, both suffer the tendency to overstatement that is common to all disruptive writing.

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