Is Christensen’s Theory of ‘Disruptive Innovation’ Still Relevant?

Resources

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Ron Adner. 2021. Winning the Right Game: How to Disrupt, Defend, and Deliver in a Changing World. Cambridge, MA: The MIT Press.

James Bessen. 2022. The New Goliaths: How Corporations Use Software to Dominate Industries, Kill Innovation, and Undermine Regulation. New Haven, CT: Yale University Press.

Clayton M. Christensen. 1997. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Cambridge, MA: Harvard Business Review Press.

Clayton M. Christensen and Michael E. Raynor. 2013. The Innovator’s Solution: Creating and Sustaining Successful Growth. Cambridge, MA: Harvard Business Review Press.

Ariel Ezrachi and Maurice E. Stucke. 2022. How Big-Tech Barons Smash Innovation—and How to Strike Back. New York: Harper Business.

Vijay Govindarajan and Chris Trimble. 2012. Reverse Innovation: Create Far from Home, Win Everywhere. Harvard Business Review Press.

W. Chan Kim and Renée Mauborgne. 2023. Beyond Disruption: Innovate and Achieve Growth without Displacing Industries, Companies, or Jobs. Cambridge, MA: Harvard Business Review Press.

Navi Radjou and Jaideep Prabhu. 2015. Frugal Innovation: How to do more with less. London: The Economist.

Navi Radjou, Jaideep Prabhu, and Simone Ahuja. 2012. Jugaad Innovation. Think Frugal, Be Flexible, Generate Breakthrough Growth. Hoboken, NJ: Jossey-Bass.

ONLINE

Ron Adner and James Euchner. 2022. Managing disruption (reprint). Research-Technology Management 65(6): 11–17. doi: 10.1080/08956308.2022.2123657

Federico Bastiani. 2023. How to translate disruptive innovation to the world. Innovators Magazine, April 27. https://www.innovatorsmag.com/how-to-translate-disruptive-innovation-to-the-world/

James Bessen. 2022. Why disruptive innovation has declined since 2000. ProMarket, November 15. https://www.promarket.org/2022/11/15/why-disruptive-innovation-has-declined-since-2000/

Joseph L. Bower and Clayton M. Christensen. 1995. Disruptive technologies: Catching the wave. Harvard Business Review 73(1): 43–53. https://hbr.org/1995/01/disruptive-technologies-catching-the-wave

The Christensen Institute. 2023. Disruptive innovations. https://www.christenseninstitute.org/disruptive-innovations/

Clayton M. Christensen and James Euchner. 2020. Managing disruption (reprint). Research-Technology Management 63(3): 49–54. doi: 10.1080/08956308.2020.1733890

Clayton M. Christensen, Michael E. Raynor, and Rory McDonald. 2015. What is disruptive innovation? Harvard Business Review 93(12): 44–53. https://hbr.org/2015/12/what-is-disruptive-innovation

MaryAnne M. Gobble. 2015. The case against disruptive innovation. Research-Technology Management 58(1): 59–63. doi: 10.5437/08956308X5801005

MaryAnne M. Gobble. 2016. Defining disruptive innovation. Research-Technology Management 59(4): 66–71. doi: 10.1080/08956308.2016.1185347

Vijay Govindarajan and Jim Euchner. 2012. Reverse innovation. Research-Technology Management 55(6): 13–17. doi: 10.5437/08956308X5506003

Vijay Govindarajan and Chris Trimble. 2009. Is reverse innovation like disruptive innovation? Harvard Business Review, September 30. https://hbr.org/2009/09/is-reverse-innovation-like-dis.html

W. Chan Kim and Renée Mauborgne. 2019. Non-disruptive creation: Rethinking innovation and growth. MIT Sloan Management Review, February 21. https://sloanreview.mit.edu/article/nondisruptive-creation-rethinking-innovation-and-growth/

Andrew A. King and Baljir Baatartogtokh. 2015. How useful is the theory of disruptive innovation? MIT Sloan Management Review, September 15. https://sloanreview.mit.edu/article/how-useful-is-the-theory-of-disruptive-innovation/

Navi Radjou and Jim Euchner. 2016. The principles of frugal innovation: An interview with Navi Radjou. Research-Technology Management 59(4): 13–20. doi: 10.1080/08956308.2016.1185339

Tammy McCausland. 2023. Reverse innovation, frugal innovation, and jugaad. Research-Technology Management 66(1): 68–70. doi: 10.1080/08956308.2023.2142444

Digital photography, the iPod, the iPhone, streaming services, Tesla, and ride-sharing—we are all familiar with these disruptive innovations that have transformed some industries and decimated others. These disruptions have also significantly changed the ways we work, live, and entertain ourselves.

The pace of disruption is not abating. Innovation is happening at an ever-accelerating pace. Companies face increasing pressure to anticipate disruption to keep ahead of their competitors and to retain customers. At the same time, society faces pressure to develop disruptive innovations to combat global crises like climate change.

A key question looms, though: Does innovation have to be disruptive to be impactful?

The term “disruptive innovation” took on a more precise meaning when Clayton M. Christensen defined it in a 1995 Har­vard Business Review (HBR) article “Disrup­tive Technologies: Catching the Wave,” which he coauthored with Joseph L. Bower. As Christensen explains in a Research-Technology Management (RTM) in­ter­­view “Managing Disruption,” a disruptive innovation “makes it so much simpler and so much more affordable to own and use a product that a whole new population of people can now have one—people who, historically, didn’t have the money or skill to be in the market.”

Christensen’s 1997 book, The Inno­vator’s Dilemma, has been a guidebook for companies seeking to identify and capitalize on disruptive innovation. That book was somewhat pessimistic. It was subtitled “When new technologies cause great companies to fail” and explored why otherwise well-managed firms tend to miss the signs of impending disruption. The Innovator’s Solution, a subsequent book coauthored with Michael E. Raynor, lays out ways in which companies can and should become disruptors.

Christensen’s theory has been both applauded and criticized. On the one hand, it sparked a plethora of research, publications, conferences, and consultants all focused on helping companies identify and capitalize on disruptive innovations. On the other hand, there have been challenges to Christensen’s theory, as MaryAnne M. Gobble aptly explores in her RTM column “The Case Against Disruptive Innovation.” As an example, she highlights Jill Lepore’s “attempt to systematically debunk the very idea of disruptive innovation.” Gobble writes, “What it [disruptive innovation] is, is a useful framework for strategy that innovators, entrepreneurs, and managers can use to understand the market, identify potential threats and opportunities, and plot a way forward.”

In a subsequent RTM column titled “Defining Disruptive Innovation,” Gobble offers a fascinating take on “disruptive” versus “disruptive innovation.” She writes, “In my view, a large part of the problem in understanding disruptive innovation arises from a conflation of the industry-specific concept—Christensen’s theory—and the broader meaning of the words ‘disrupt’ and ‘disruptive’ in the English language.” She explains that it’s possible to “disrupt a market, a value chain, an entire industry in the absence of a disruptive innovation in Christensen’s sense.” Gobble also points out how, in a 2015 HBR ­article, Christensen and his coauthors pointedly argue that “dis­ruptive innovation” is a label that has been in­ap­propriately slapped on “any situation in which an industry is shaken up and previously successful incumbents stu­mble.”

Andrew A. King and Baljir Baata­rtogtokh explore the utility of Chri­stensen’s theory in their MIT Sloan Management Review article “How Useful Is the Theory of Disruptive Inno­vation?” The authors identified four key elements of the theory of disruption: (1) incumbents are improving along a trajectory of innovation; (2) the pace of sustaining innovation overshoots customer needs; (3) incumbents have the capability to respond by failing to exploit it; and (4) incumbents flounder as a result of the disruption. King and Baatartogtokh surveyed and interviewed one or more experts from each of the 77 cases discussed in The Inno­vator’s Dilemma and The Innovator’s Solution. They found that only a handful of the cases corresponded well with all four elements, while many included “different motivating forces or displayed unpredicted outcomes.” For example, 78 percent of experts interviewed thought incumbent companies (element 3) were not producing products or services that exceeded customers’ needs, nor were they likely to do so. And 31 percent of experts expressed skepticism about the existence of any meaningful trajectory of sustaining innovation prior to a disruptive innovation (element 1).

Although their analysis showed broad differences between Christensen’s theory and experts’ perspectives, King and Baatartogtokh do not advocate discarding the theory of disruption. Instead they propose “using its best parts in addition to classical approaches to strategic analysis. The theory of disruptive innovation provides a generally useful warning about managerial myopia.” Companies should only apply the full theory of disruptive innovation under specific conditions, they caution, because, while disruptive innovation stories can offer warnings of what may happen, critical thinking and careful analysis are essential.

The six “disruptive” examples I mentioned at the outset all happened in the last 20 years. Yet James Bessen, author of The New Goliaths: How Corporations Use Software to Dominate Industries, Kill Innovation, and Undermine Regulation, argues that the rate of disruption of market leaders declined sharply after The Innovator’s Dilemma was published. In his article “Why Disruptive Innovation Has Declined Since 2000,” Bessen attributes this decline to large firms’ investment in proprietary software, which has allowed them to combine the advantages of scale with the advantages of mass customization. Large companies have been able to dominate thanks to mass computing, which has transformed how companies use information. Policies that encourage open access to technology, data, and knowledge can spur disruptive innovation, suggests Bessen, who expands on these ideas in greater detail in The New Goliaths.

Like Bessen, Ariel Ezrachi and Maurice E. Stucke contend that large players—tech companies in this case—can stifle innovation. In How Big-Tech Barons Smash Innovation—and How to Strike Back, Ezrachi and Stucke suggest technologies are extracting value and decreasing well-being rather than creating disruptive innovations that yield significant benefit for people and society. They do not see big-tech barons as the ultimate innovators—rather big tech impedes disruption, shepherds users toward innovations it wants them to adopt, and keeps disruptors out of the market. Ezrachi and Stucke talk about how toxic innovation is on the rise and that it’s permeating and manipulating people’s lives offline. The authors call for an overhaul in government policy around tech. They also suggest that “Cities, rather than large corporations, should be treated as the engine for diversity and growth.”

“Not surprisingly, many have come to view disruption as a synonym for innovation. . . Corporate leaders are continually warned that disruption lurks around every corner and that the only way to survive, succeed, and grow is to disrupt their industries or even their own companies,” write W. Chan Kim and Renée Mauborgne in their MIT Sloan Management Review article “Nondisruptive Creation: Rethinking Innovation and Growth.” According to the authors’ research, which spans three decades, disruption is neither the only way to innovate and grow nor the best. Kim and Mauborgne present “nondisruptive creation”—an alternative to disruptive innovation—and offer a framework for leaders tasked with driving innovation. They also highlight which strategies trigger nondisruptive creation and which lead to disruption. “A model that places nondisruptive creation on an equal plane with disruption will allow us to unleash a wave of new growth and better align the goals of business and society,” they write. In their book Beyond Disruption: Innovate and Achieve Growth without Displacing Industries, Companies, or Jobs, Kim and Mauborgne elaborate on nondisruptive creation, explore how it complements disruption, and show how companies can grow and at the same time be a force for good.

While disruptive innovation has its detractors, Federico Bastiani presents the case of Aqrate, an Italian company that aims to revolutionize the translations market. In “How to translate disruptive innovation to the world,” Bastiani explores Aqrate’s growth and explains how the company meets all of Christensen’s requirements to be classified as a disruptive innovation.

“There is an overlap between reverse innovation and disruptive innovation, but not a one-to-one relationship,” write Vijay Govindarajan and Chris Trimble in their 2009 article “Is Reverse Innovation Like Disruptive Innovation?” Their article was named one of HBR’s 100 most influential and innovative articles ever published. Some, but not all, examples of reverse innovation are also examples of diverse innovation, the authors assert. Readers might also enjoy reading Govindarajan and Trimble’s book Reverse Innovation. In an RTM interview of the same name, Govindarajan speaks about the tremendous opportunity reverse innovation offers. Ravi Nadjou, coauthor of the books Frugal Innovation and Jugaad, discusses both concepts in an RTM interview “The Principles of Frugal Innovation,” Other resources are available in my recent RTM column “Reverse Innovation, Frugal Innovation, and Jugaad.”

Ron Adner, author of Winning the Right Game: How to Disrupt, Defend, and Deliver in a Changing World, suggests the ecosystem-level disruption rather than industry-level disruption is the future. “We need a new set of tools, concepts, and frameworks that will enable us to see the new dimensions of strategy that get activated in a world of ecosystem disruption,” says Adner in “Innovating in Ecosystems,” an RTM interview. “The boundaries are shifting,” he says, “and that’s what makes the disruption an ecosystem-level disruption. It’s the difference between a change that respects industry boundaries and a change that redraws the boundaries in order to create a new value proposition.”

The next great disruptor is already upon us. OpenAI, with its ChatGPT and DALL-E2 tools, is a “disruptive innovation” that may spawn disruption across many industries, on a scale that may even be grander than Christensen might have imagined. Artificial intelligence isn’t new, but OpenAI’s tools offer a glimpse into its truly transformative capabilities in the Christensen sense: it opens up access to capabilities—including creative writing, art, computer programming—to a much larger population and at a much lower cost.

Unfortunately, Christensen passed away in 2020, so we can only surmise what he might think of disruptive innovation now. The Christensen Institute continues to research disruptive innovations and conduct disruptive analyses—and is therefore a worthwhile resource for readers. We hope the books and articles presented here are also useful.

Review

Thriving on Overload

Ross Dawson (McGraw Hill, 2023)

The audience for Thriving on Overload is individuals whose work and personal life is being overwhelmed by information available on the Internet and mobile applications. The author’s intent was to provide “practical in­sights and strategies you need to build a positive relationship with information and excel at work and in all your ventures.” Considered a “ground-breaking guide,” it is perhaps ground-breaking only in being a consolidation of other authors’ and speakers’ insights, versus containing unique new app­roaches for an individual to manage the massive amounts of information present in society today.

Most R&D leaders, by the nature of their roles in organizations, are likely familiar with the techniques and concepts Dawson discusses in detail. A quick read of this book, however, is likely to be a valuable refresher, and organizer, of processes one can use to be more mindful of how individuals and organizations seek, filter, and use information. I would recommend the book for people at all organizational levels of an R&D or business organization.

To best absorb Dawson’s key concepts, readers will find it helpful to reframe their perception of their own experience with information from one of overload, to one of mindful utilization. With a mindful utilization perspective, we have thoughtful choices and opportunities. Thus shifting your mindset can allow you to read and understand the methods reviewed in the book in a positive, inquisitive, and incisive manner.

Dawson presents five “powers”—that is, points of view or methodologies—for thriving on information overload. Each power has its own chapter followed by a summary chapter. The five power areas are

1. Purpose: knowing why you are spending time on looking at information

2. Framing: mapping your thinking so what you see is retained in an efficient manner

3. Filtering: discerning which information you expose yourself to serves you

4. Attention: allocating awareness and time spent with information exposure with intention

5. Synthesis: cultivating creative integration of all you’ve absorbed.

Although presented as a somewhat linear process flow, these five powers are best used in an integrated, holistic manner.

For each power Dawson provides some background, logic for using the power, and thoughts on how to use the power to thrive on information, versus being overloaded by it. Each chapter ends with helpful exercises to examine and refine for yourself how you wish to select and behave with respect to the information you consume.

Power #1: Purpose

Dawson asserts there are six information areas in which a person should have clarity of purpose when engaging with information. These are to use information to better understand our identity, our area of expertise, our business ventures, our place in society, our health and well-being, and our hobbies/passions. Coming up with a defined personal reason for gathering information in each of these areas helps us refine our intentions and behaviors.

The only way to keep up with the rapid expansion of information is to select tightly defined domains in which you will develop and maintain profound knowledge. You also need to acknowledge the mental health impact of engaging with news. Waking up to a barrage of pessimism every day inevitably shapes our outlook on life. Be clear on what you want from the news to transcend what news wants from you. Be mindful of what information you engage with and self-audit that the information you interact with serves one of your six purpose areas. Likewise, the amount of time spent with information should be thoughtful. For example, checking the performance of your long-term investments daily is not helpful. Set the priorities in each of the six areas of your life—that is, for each area decide the relative importance and the percentage of time you’ll spend with information on each one. Don’t allocate over 100 percent of your attention.

Power #2: Framing

Information is only meaningful if we can store it in our minds in context. The way you store the information you observe can enhance your expertise, understanding, and your ability to make good decisions. Dawson argues strongly for using visualization tools to do this. He minimizes the power of storytelling and kinesthetic methods. That said, from a visualization standpoint, Dawson suggests three primary structures for mapping and storing knowledge: trees, networks, and systems, each with associated visualization techniques—namely, mind maps, concept maps, and system diagrams, respectively. For each, Dawson goes into great detail. Most R&D professionals are well versed in them, but the review from the author’s perspective was worthwhile.

Dawson argues that it’s important to create your own visual frameworks and recommends six steps to do so: 1) select scope of the information area; 2) consider the central logic; 3) brainstorm which visual framework is best suited for remembering and organizing the information; 4) rearrange elements visually; 5) elucidate relationships between the multiple sub-visualizations you have selected to use; and 6) develop a final one-page visual framework to store in your mind and “on paper.”

A useful way to discover whether you truly understand something is to try and explain it to others, Dawson asserts. The most effective way to distill your thoughts is to write an account that includes a visual summary of your logic.

Power #3: Filtering

Our brains are naturally wired to consistently seek new information. However, we need to develop our facilities of discernment, recognizing what matters and what helps us further refine our thinking. Dawson provides a simple set of questions that can help distinguish between what is useless and what is worthy of incorporating into our mental models. He references Karl Erik Sveiby’s work that “while some information has value, a great deal of information in fact has negative value, i.e., when the cost of the time and effort of consuming a piece of information is greater than what it brings to you.” Further, Dawson contends that this negative value of information is even more important if the information is misleading, inaccurate, or outright false, as is now depressingly common. Your ability to discern any information’s value shapes the quality of your life.

According to Dawson, probabilistic thinking is one of the most powerful tools we can develop to improve our chances of deriving the most value from the information we consume. He also endorses looking for surprises as they are immensely more valuable than finding what you expect. He asks that you spend more of your time with high value content than you do with today’s ephemera.

To do so, Dawson asks readers to focus on three domains: yourself, the source, and the content itself. A “content filtering framework” can comprise simple questions: 1) Yourself: Is this relevant and important to you? Do you have any preconceptions on this topic? Do you want it to be true or false?; 2) The Source: How reputable is the publication? How credible is the author? May they have any biases you should take into account?; and 3) Content: Is its detailed rationale reasonable? Are the quoted sources reputable and accurately represented? Do other authoritative sources cooperate?

Dawson suggests several other means to filter the information we engage with. He recommends going to the ultimate source—that is, for anything important, always try to track back to the original information source. Second, select your portals—the single most important factor in selecting your information sources is diversity. Third, select who you follow. A good rule of thumb is to select and refine a list of 20 people who are outstanding in an industry and follow their work and ideas. Fourth, share what you learn. Positive outcomes coming from sharing your insights with others are that it refines your filtering skills, demonstrates your expertise to others, and boosts your visibility to build relationships. Writing down and auditing your own filtering performance greatly improves your personal ability to improve.

Power #4: Attention

Dawson contends strongly that your attention is a finite resource and constantly being pulled away from you by today’s perpetual distractions. Humans cannot truly multitask, he contends; the longer we remain in a single attention motive time, the more effective we will be compared to switching between tasks.

The longer you remain in a single attention mode, the more effective you will be, the author contends. The first step in using the power of attention is simply understanding that there are six different modes, and that each have their place. Rather than flitting about through the day, strive to engage in constant attention and deep focus on only one subject for extended periods, and allocate time judiciously to the just those subjects that benefit you the most.

Following thoughtfully designed information routines will dramatically enhance your effectiveness. Knowing yourself well enough to select the best times and days for different activities is a superpower that enhances your productivity and effectiveness.

Dawson suggests that attention is like a muscle that we can strengthen. To do this, he recommends making a table of the six types of attention, and block out when you do them during the day, how long will you do them, and how frequently you would do them.

Power #5: Synthesis

Dawson’s model has five elements that build better decisions through synthesis: states of mind for insight, richer mental models, integrative thinking, creative connections, and openness to ideas.

Another key to using the synthesis power is not to fear being wrong. The smartest people are constantly revising their understanding; reconsidering a problem thought already solved; seeking new points of view, information, ideas, contradictions, and challenges to their own way of thinking. The key is to separate your knowledge from your personal identity to become a better thinker, Dawson says. Practice discipline to avoid confirmation bias so you don’t discount evidence that your thinking is incorrect. To achieve this, consistently expand your worldview, he argues.

Finally, Dawson asks that you do not just accept but embrace ambiguity.

Integrating the Five Powers

Practicing and integrating the five powers Dawson explicates is part and parcel of a well-run R&D organization. However, to be most effective they must be practiced at all organizational levels. Given an information-­saturated future of humanity, organizations must embrace intelligent information skills. Dawson outlines the tools to thrive in this world. Succinctly stated, we have to be mindful of the information we expose ourselves to, and the way in which we assimilate and use it. Dawson’s book is a useful guide to help us do so.

Additional information

Notes on contributors

Tammy McCausland

Paul Germeraad is a past chair of IRI; he currently consults with diverse global companies on innovation and the links between R&D and IP strategies. He is editor of www.BusinessInnovationManagement.com, a collection of Best Innovation and IP Practices. [email protected]