2020-03-01 MIT Sloan Management Review

56 MIT SLOAN MANAGEMENT REVIEW SPRING 2020 SLOANREVIEW.MIT.EDU

DISRUPTION 2020: LEADING WITHOUT BLINDERS

How Leaders

Delude Themselves

About Disruption

We’ve known for decades what causes disruption. So why are companies still allowing

themselves to be vulnerable? The answer starts at the top.

BY SCOTT D. ANTHONY AND MICHAEL PUTZ

ver since the 1997 publication of The Innovator’s Dilemma, researchers, manage-

ment experts, and businesspeople have discussed, dissected, and debated

Clayton Christensen’s Theory of Disruptive Innovation. By now, the arc of dis-

ruption is well established: We know how disrupters enter the market, and we

know how incumbents typically bungle their responses to such seemingly insig-

nificant competition. Numerous books and articles have offered to solve the

dilemma of disruption, including Christensen’s own The Innovator’s Solution

(a 2003 book coauthored with Michael Raynor), which suggests that leaders who

understand how disruption transpires can inoculate themselves against the

threats and seize the opportunities.

Yet, despite so much insight and advice, the dilemma persists: 63% of companies are currently experi-

encing disruption, and 44% are highly susceptible to it, according to research by Accenture.^1 And in a

thorough analysis of more than 1,500 publicly listed companies, growth strategy consultancy Innosight

found that only 52 of them, about 3% of the sample set, had made material progress in strategically trans-

forming their organizations.^2 The default positions, it seems, are to squeeze extra points from profit

margins, search for companies to acquire, or simply

pay lip service to innovation by setting up token in-

cubators or having executives wear jeans and the

occasional hoodie.

Why are companies still so vulnerable to disrup-

tive threats? Our view is that it isn’t about not

having the right playbook. The problem is that

well-intentioned leaders often delude themselves

by downplaying disruptive threats or overestimat-

ing the difficulty of response. In simple terms,

leaders lie to themselves. This means that dealing

with disruption is not just an innovation challenge;

it is a leadership challenge. This article explains

these delusions about disruption and offers ways to

help leaders avoid self-sabotage.

Cautionary Tales Persist

“Christensen and Raynor have done a superb job of

creating a framework for helping to understand in-

dustry dynamics and for planning your own

growth alternatives.” This quote appeared on the

back jacket of The Innovator’s Solution, attributed

to Pekka Ala-Pietilä, then president of Nokia. The

Finnish company had much to be proud of back

then. It was on the brink of taking over the boom-

ing cellphone market. Over the next few years, the