58 MIT SLOAN MANAGEMENT REVIEW SPRING 2020 SLOANREVIEW.MIT.EDU
DISRUPTION 2020: LEADING WITHOUT BLINDERS
disruptive fashion but today is under threat from
Amazon, which could hollow out a significant por-
tion of FedEx’s core business by picking off
high-value lines between hubs, leaving FedEx (and
UPS) with small, unprofitable routes. Or consider
Netflix. The disruption poster child could be dis-
rupted itself by Amazon, Apple, AT&T, or Disney.
Netflix lacks the diverse portfolio these businesses
have, and it may be overly focused on mainstream
customers while ignoring the needs of less profitable
ones, like all of those young people who prefer creat-
ing and sharing short-form videos on platforms
such as YouTube and TikTok instead of watching
shows like The Crown. New habit formation is often
an early warning sign of disruptive change. For all its
innovation prowess, why hasn’t Netflix visibly pur-
sued growth opportunities beyond video streaming
and long-form content creation?And why, after so many years since Christensen
presented his original theory and so many caution-
ary tales, do leaders continue to miss the warning
signs? Our view is that the disruptive playbook’s
leadership section is incomplete. Leaders must learn
how to build the individual and organizational capa-
bility to confront powerful self-deceptions that
inhibit successfully dealing with disruption.Four Lies Leaders Tell Themselves
Powerful deceptions hinder a leader’s ability to re-
spond to disruptive threats and seize disruptive
opportunities. Christensen’s original research
highlighted one such deception, noting how, ironi-
cally, listening to your best customers drives the
innovator’s dilemma. Companies typically focus
on satisfying their best customers (usually their
most profitable ones) by providing better versions
of current solutions while ignoring their worst cus-
tomers, the ones most likely to flock to cheaper ormore convenient disruptive solutions. Of course,
that deception is now well known. But other, less
obvious lies that leaders tell themselves play a criti-
cal role in determining a company’s long-term fate.
Let’s explore four of them.
LIE NO. 1: “We’re safe.” It is easy to be in the mid-
dle of a disruptive storm and take comfort in data
suggesting everything is fine. This is because data
lags disruptive change. CEOs look at their dash-
boards and think they are OK, but they forget that
they are looking in a rearview mirror. BlackBerry is
a good example. On April 1, 2008, its co-CEO,
Jim Balsillie, gave an astonishing interview on a
Canadian chat show.^3 He dismissed the iPhone,
didn’t mention Android, and smugly said, “I don’t
look up too much or down too much. The great fun
is doing what you do every day. I’m sort of a poster
child for not sort of doing anything but what we doevery day. ... We’re a very poorly diversified portfolio.
It either goes to the moon or crashes to the earth.”
It’s easy in hindsight to laugh at the quote and
especially at Balsillie’s hubris. But consider
BlackBerry’s performance at the time and over the
next few years that followed. When Balsillie gave the
interview, BlackBerry (then called Research in
Motion) had just reported revenues double those in
the previous fiscal year, to roughly $6 billion. Over
the next three years, revenues tripled, reaching a
peak of close to $20 billion. Then, of course, came
the crash, and now BlackBerry’s revenues are below
$1 billion. Today’s data reflects yesterday’s reality.
Ironically, leaders can be adept at spotting disrup-
tion in other industries and yet be blind to what’s
going on right in front of their eyes. Years ago,
Innosight and Harvard Business School (HBS) held
an event to discuss disruption with organizations that
included Hallmark, Intel, Kodak, and the U.S.
Department of Defense. Participants were givenIt is easy to be in the middle of a disruptive storm and take
comfort in data suggesting everything is fine. This is because
data lags disruptive change.