Abstract
In a world that has become increasingly focused on competition and innovation, finding the “next best thing” is a topic often discussed within the startup ecosystem. Founders of new companies strive to find solutions to global problems through the creation of new businesses that hope to fill the void some customers feel in the marketplace. Though innovation is often thought to be focused around business, we all discuss innovative creations in a multitude of spheres — everything from healthcare to politics to education. In this day and age, one can hardly go a single day without hearing the words, “I wish I had a way to do ‘X’.” With a societal philosophy of the grass being greener on the other side (ie. the future), it would be difficult for us to discount the importance of companies that have inserted themselves into our daily lives; these are companies with products we did not know we needed until they became available.
In the startup space, we call these technological advancements “disruptive innovations,” a term coined by award winning writer, business theorist, and Harvard Business School (HBS) professor Clayton Christensen. Through the course of this essay, I hope to give readers a comprehensive overview of who Clay Christensen is, what his theories are, why they are important, and finally, why this professor at HBS can be called a public intellectual for our current era and those to follow.
From Rose Park to Boston
Clayton Christensen was born April 6, 1952 in a small suburb of Salt Lake City, Utah called Rose Park. Growing up with seven siblings, his parents Robert and Verda, both members of the Church of the Latter Day Saints, raised their children in a household focused on generosity and the importance of volunteer work. Christensen learned from an early age to live a humble life; helping others less fortunate than he was commonplace in his society. He moved up the ranks as a Boy Scout of America, not only learning tricks of the trade, but also how to be an overall good person. Though he was not necessarily “well-off” in today’s terms, Christensen’s childhood made his mind and his soul wealthy — both through the teachings he learned through the Church and the love and support his parents provided. It was his mother who supported young Clayton from an early age in getting the best education he could — and so he did.
Clayton attended West High School in his hometown of Rose Park. After being awarded the title of student body president, Christensen graduated high school and in 1970 moved to Provo, Utah to attend Brigham Young University, a private university owned by the LDS Church. Though this was only the beginning of Christensen’s expansive career in academia, Clayton decided one year into university he wanted to take some time off to volunteer as a missionary for the LDS Church. Beginning in 1971, Christensen spent two years in South Korea preaching the gospel. He reflects on his experience, saying “Korea at the time was the poorest country in all of Asia. And yet all these people that I lived with were the happiest and most wonderful people I could have imagined. I got the sense that happiness has nothing to do with money. Absolutely nothing to do with money.” (It seems to me that his parent’s childhood lessons paid off.)
Though his academic career took a pause from 1971 to 1973, Christensen’s learning did not. While in Korea, Clayton became fluent in Korean, and, in turn, the trip became a truly influential part of Christensen’s life. He returned to BYU soon after to graduate summa cum laude with honors in Economics and after graduation was awarded a Rhodes Scholarship to study at Oxford where he earned a Master of Philosophy in Applied Econometrics in 1977. To make his academic resume that much more impressive, Christensen continued his studies and in 1979 earned an MBA with high distinction from Harvard Business School.
Wow, What A Resume!
In 1980, Christensen joined Boston Consulting Group as a consultant and project manager. Similar to his break from university, Christensen took time off from BCG, as he was named a White House Fellow and worked as the assistant to the U.S. Secretary of Transportation. In 1984, Clayton came back to BCG and at the same time co-founded Ceramics Process Systems with some MIT professors where he served as president and CEO through the late 1980s. (Did I mention that Christensen loved learning? Well, here’s some more academic achievements.) In 1992, Christensen went back to HBS to earn his Doctor of Business Administration, the highest level doctorate in business, and within 6 years he reached the level of full-professor at Harvard — record breaking time.
While teaching at HBS, in 1997, Christensen wrote his most seminal work, The Innovator’s Dilemma, in which he discusses his theory of “disruptive innovation,” a theory some would argue is one of the most important and influential business theories of all time. The book won the Global Business Book Award for the best business book of the year in its year of publication, and has since been regarded by The Economist (and many others) as one of the six best business books ever written.
Riding the hype train created by his best-selling book, Christensen devoted the rest of his career to studying his own theory of disruptive innovation and applying it to a multitude of fields including healthcare (written about in The Innovator’s Prescription, 2008) and education (Disrupting Class, 2008). In 2000, he founded Innosight, a growth strategy consulting firm, and in 2007 he founded Rose Park Advisors (see a connection?), a private investment firm focused on companies with business models suited for disruptive industry changes, as well as The Christensen Institute, a think tank focused on applying the theories of disruptive innovation for solutions to global issues. Today, Christensen continues to teach at HBS with his highly regarded “Building and Sustaining a Successful Enterprise” class as well as an online Disruptive Strategy course for anyone looking to dive deep into his theory. He also continues to write, having published ten books and over 100 articles, earning him the McKinsey Award five separate times, an award given to the author of the best Harvard Business Review article of the year.
“Disruptive Innovation” & The Innovator’s Dilemma
If Clayton Christensen’s achievements don’t speak for themselves, it’s important to dive a little deeper to fully understand two codependent theories attributed to Dr. Christensen — the idea of “Disruptive Innovation” and “The Innovator’s Dilemma.” First, let’s take a look at disruptive innovation.
According to Christensen, innovation takes one of two forms — sustaining innovation or disruptive innovation. When we look at technological advancements (in any field) throughout history, the vast majority are what we call “sustaining innovations” — innovations that “sustain” a company’s current business model. Whether it be increased efficiency or better product features, sustaining innovation often drives higher profits for established businesses — the company focuses on what their customer wants now to achieve higher profit margins now. “Disruptive [innovations],” as Christensen writes, “introduce a very different package of attributes from the one mainstream customers historically value, and they often perform far worse along one or two dimensions that are particularly important to those customers.” In fact, he claims, “Many of the disruptive technologies we studied never surpassed the capability of the old technology. It is the trajectory of the disruptive technology compared with that of the market that is significant.” In turn, these technological innovations, “generally make possible the emergence of new markets” later down the line once customers realize the rate at which the performance of current market offerings is improving will soon be intercepted by the faster rate at which the performance of new product offerings is improving. This is done by focusing on the future and making assumptions about what the market will want, not what it currently wants. This is one of the key defining factors of a disruptive technology.
To further understand Christensen’s theory, look at the adoption of the automobile. When the first automobile was created in the late 1800s by Karl Benz, the market for transportation was still dominated by horse-drawn carriage. Benz’s automobile was seen as a luxury good — it was extremely expensive, something the mainstream market was not yet ready for. Then, with the introduction of Henry Ford’s Model T in 1908, the market for horse-drawn carriage was upended. Ford’s automobile was much cheaper, and his assembly line operations strategy for the manufacturing of the car increased the scale of production, allowing the common customer to purchase and use an automobile. Though Ford’s car was much more basic than Benz’s original invention from a technological standpoint, Benz’s invention did not appeal to the mass market like Ford’s did. From this, we can conclude that while the introduction of the Benz’s automobile was a strong technological advancement, it was Ford’s Model T that represented the disruptive innovation in the market for private transportation, forcing consumers to transition from horse-drawn carriage to the car we know and love today.
So why would a company sacrifice profitable business units it has already put in place and proven in the market for new products/services that they know will not do as well? We have now explained what Christensen calls “The Innovator’s Dilemma.” The problem is not that industry incumbents can’t find new disruptive technologies, they just don’t value them as they should. While new entrants to the market are able to work with small teams and be agile in their processes, incumbents are mainly concentrated on making existing product offerings better for their current customers. This creates a dilemma for the incumbents — though the return on investment for disruptive innovation is low, will investment in these technologies now pay off in the long run given the possibility of new technologies eating away at a company’s current profits? Engaging in “sustaining innovation” is something that makes sense in our current frame of time, but targeting untapped niche markets, ones that contain new customers with unmet needs, could determine the future of the company and, in turn, the world we live in.
Why We Should Listen to Clay (The Importance of Disruptive Innovation)
Some of you may be wondering why all of this is so important, or further why we should listen to someone whose roots are so deeply ingrained in religiosity. USC Associate Professor of Writing, Stephen Mack, once wrote in a 2014 blog post, “when terms of identity become the focus of intellectual practice within a religious community they give us tangible evidence of just how ‘special’ our group is — and how unspecial, ungodlike, or un-American everybody else is. Rather than connecting us to one another, this sort of religion makes a virtue of alienation.” Though I may agree with Mack’s position in part, Clayton Christensen completely breaks the mold Mack attempts to place him in. Though he is a devout Mormon, Christensen was able to not only separate his faith from his work, but also apply it in ways that do not alienate us from one another, but instead bring us together to find ways to make the world a better place.
Let’s take The Christensen Institute, for example, a think tank started by Christensen and some fellow HBS alumni centered around finding solutions to global problems using the theory of disruptive innovation. Founded in 2007, the Institute has thoroughly researched areas of public importance such as healthcare and education, leading to the publication of two of Christensen’s books titled The Innovator’s Prescription and Disrupting Class, respectively. The Institute also regularly publishes articles on its own blog dedicated to helping the public better understand the issues facing our world and how disruptive innovation could solve them.
Christensen believed his theories did not just apply to business, but could be extrapolated to derive insights on how to solve larger problems than a single company’s profitability. Perhaps this generosity to share his ideas stems from his Mormon roots — coming from a community built on a foundation of volunteer work to make the world a better place, the Christensen Institute echoes the professor’s moral sentiments from childhood through his adult life while operating separately from his personal religious views. Rather than letting his faith alienate him from the community at large, Christensen has time and time again proven that he works and publishes ideas out of the goodness of his heart for the greater good of society. Though the theory of disruptive innovation is a technical business theory about firms and markets and the like, Christensen’s broader focus and outlook on the world, as shown through his work, is what solidifies his place as an American public intellectual.
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