The World's Leading Expert On Disruptive Innovation
Clayton Christensen is the Robert and Jane Cizik Professor of Business Administration at the Harvard Business School, with a joint appointment in the Technology & Operations Management and General Management faculty groups.
His research and teaching interests centre on the management issues related to the development and commercialization of technological and business model innovation.
Professor Clayton Christensen currently teaches an elective course he designed called Building a Sustainably Successful Enterprise, which teaches managers how to build and manage an enduring, successful company or transform an existing organization.
The Positive Power Of Innovation: Avoiding The Pitfalls Of Disruptive Innovation And Using It To Your Advantage
A Professor of Business Administration at Harvard 'Business School, Clayton Christensen is world-renowned for his theories of disruptive innovation.
Truly disruptive innovations are capable of disrupting successful business strategies or creating competitive markets, particularly in a mature industry.
Whilst companies know that they must continually innovate to achieve sustainable growth, most fear the unpredictability of the process.
However, Christensen's research reveals that innovation is not as unpredictable as most managers believe it to be. He has found that, while the outcomes of past innovations may seem random, the process of innovation within a company or industry is actually very predictable.
The Principles Of Disruptive Innovations
According to Christensen's terminology, a disruptive innovation brings to market a product not as good as the products in the current market, and so it cannot be sold to the mainstream customers. Nevertheless, it is simple and it is more affordable.
"Great firms can be undone by disrupters who analyze and exploit an incumbent's strengths and motivations"
The pattern of disruption works like this: the new technology or business model (such as the Low-Cost Airline) tackles the low end of the market, thriving on low margins and the established technology or model makes room for it. Eventually, however, the disruptive model gets better, and starts biting off more attractive market segments.
By the endgame, the established model or technology goes head to head against the disrupter for the choicest markets, and usually loses.
Moreover, because of its humble beginnings, large established companies will often fail to take it into consideration as a competitor but they may pay the price later.
Predicting Industry Change: A Three-Part Model
How do you identify which emerging technologies and models customers will embrace?
Christensen has developed a three part model for identifying when a disruptive technology has you in its crosshairs, how to separate true signals of change from meaningless "noise", evaluate the likely winners and losers in competitive battles, and predict whether the choices firms make will increase or decrease their chances of success.
1. Find the missile on your radar screen.
You would think it would be easy to spot an incoming missile like
this, but the conventional means of detection is no help.
Your customers won't tell you your advanced technology
isn't worth what you are charging for it.
Your people in marketing and finance will be too stuck in their game to notice something outside it.
Even senior management will be unaware of the disrupter, or shrug it off as an annoyance. You need a new process for spotting this new competition, and new people to do the spotting.
2. Show the yellow flag.
This is the emergence of a brand new market, one that values the fledgling
technology and does not turn up its nose at it. It won't
emerge where you expect it to emerge, and it will
happen in a downscale niche. When you see it,
3. Flap the red flag. Now you are in full defensive
mode. Your competition is not a rumour anymore - it's
competing, and you must protect the low end of your
market against nibbling. Assess your vulnerability: Do
you provide too complete a solution to your customers?
Is "good enough" all your customers needs?
Clayton Christensen has developed an analytical model that shows how to identify the signs that something potentially important is happening and action needs to be taken.
Looking at non-consumers, undershot customers and overshot customers and evaluating nonmarket context for innovations can provide the answer to the signal for change question.
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