58 Business The EconomistFebruary 1st 2020
“W
hen i dieand they’re going to interview me outside of
heaven to decide whether...to let me in,” Clayton Christen-
sen once told an Economistconference, “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 an-
swers. 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 manage-
ment 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 the-
ories, which live and die like fruit flies, his will outlast him.
Its compelling simplicity caught the zeitgeist just as the disrup-
tive 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 de-
struction” (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 Har-
ry’s razors are having on an incumbent brand like Gillette.
In a nutshell, Mr Christensen’s insight was that it is not stupid-
ity 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 theboffinsto out-innovate anyone. “The Innovator’s Dilemma” chal-
lenged 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 Uni-
versity, Jill Lepore, wrote a New Yorkerarticle in 2014 lamenting the
Christensen-inspired “blow things up” style of disruption spread-
ing 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 fa-
vours 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 ir-
relevance, 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 of-
fering 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 Cali-
fornia, Berkeley, calls it “the disruption risk-management sys-
tem”. 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 po-
tential disrupters to keep an eye on them: gminvested 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 oth-
er 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 heav-
en’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 insist-
ed, 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.” 7Schumpeter An existential questioner
Clayton Christensen’s insight on disruptive innovation will outlive him