This article is by Clark Gilbert, the chief executive of The Deseret News and Deseret Digital Media.
For nearly 10 years I studied the effects of disruptive innovation on industry transitions. I began my formal research as a doctoral student under Clayton Christensen, and it culminated during my subsequent work on the faculty at the Harvard Business School. Since then I have left the classroom to help lead disruptive change in both academia and the media. Today I am the chief executive of one of the most rapidly growing digital media businesses in the country, a company that has its origins in a 150-year-old newspaper. I believe my blended experience of both formal academic research and the hard-learned lessons of management gives me a unique perspective on the theory and practice of disruptive innovation. I do not often weigh into academic debates (anymore), but there are certain arguments that should not go unchallenged. Jill Lepore’s recent piece on disruptive innovation in The New Yorker is one of those. The following is both a critique and a clarification of Lepore’s analysis.
There is one contribution in the Lepore piece with which I agree, the idea that the term “disruption innovation” is frequently overused. Clearly the term has sometimes become a cliché among those who don’t understand. This is a reality of today’s business environment and a point well made by the author.
However, and despite the depth and efforts of its analysis, I found the article to be cleverly written but substantively lacking. Let me review a few of the misplaced arguments in Lepore's analysis:
Fear: The idea that fear foments engagement with the concepts around disruption is initially interesting but all too frequently confused by the author. “The upstarts who work at startups,” she writes, “. . . are told that they should be reckless and ruthless. Their investors . . . tell them that the world is a terrifying place, moving at a devastating pace. . . . Disrupt or be disrupted.” It is true that fear does drive engagement of incumbent organizations—this was the observation of my own research at the Harvard Business School back in 2001. But what the author misses is that Clay Christensen and many others hardly view fear as the correct motivation for organizational leaders. The irony is that fear of loss is what drives The New York Times or Kodak or many others to respond to a disruptive innovation, when in actuality, disruption always drives new, net growth in an industry. The problem for incumbent organizations is that their own direct impact is usually one of loss. The sad story for most incumbents is that their fear of losing their traditional core operations causes them to cram the new innovation into their traditional business and miss the new opportunity entirely. Separately, the author’s focus on fear as a motivator misses the whole point that it is startups, not the established organizations, that usually lead disruption. They are not fearful of losing anything. They are hopeful of finding something new. In other words, the primary motivation for the disruptor is usually one of growth, not fear of loss. Google wasn’t motivated by fear, and neither was the team at Amazon, or the mini-mills in the steel industry, or Southwest Airlines, or the team at Huffington Post. They were motivated by a new growth opportunity that wasn’t possible prior to the disruption. Moreover, most of such disruptors' initial growth does not come at the expense of a legacy industry. Most of the initial growth is new, net growth that is enabled by the disruption. It’s only as a disruption matures that it actually attacks an incumbent industry. Thus, the entire premise of fear is misplaced, not only by the author, but interestingly by many incumbents.
Little serious criticism: The author of The New Yorker piece claims that Christensen’s ideas have had little serious review or criticism. Really? This comment shows an ignorance of the academic and business management literature around disruption. People have fought Christensen’s ideas from their inception. Lepore's article is not the first (and I am sure it won’t be the last) critical review of disruptive innovation theory. Moreover, Christensen’s research has been through multiple peer reviews across leading academic publications. However, one of the reasons the theory has had such a profound impact is that it works. People who harness the forces of disruption find new growth. Those who ignore it stagnate or sometimes die. A good theory allows you to act ahead of the data being revealed. That is what has happened in many industries, and increasingly people are able to use the theory to predict industry evolution and manage the growth (or decline) of their businesses. Again, it’s not just the ideas, the marketing, or the compelling arguments that make Christensen’s theory resonate in the marketplace; it’s that it works.
Data selection and measurement: In some of the counter examples used in the piece, the very cases cited as counterpoints to Christensen’s ideas actually confirm the broader theory. For example, yes, Kresge launched Kmart and Dayton-Hudson opened Target. Launching them as separate entities was one of the very reasons those businesses were able to initially succeed. Later, the author cites the subsequent failure of Kmart as proof that Christensen’s theory doesn’t work, ignoring years of profitable value generation and success across multiple business cycles. The author’s analysis is such an oversimplified response that it becomes hard to take seriously. Forming a separate division is a necessary but not sufficient condition for success. Forming a separate division allowed Kmart to successfully break out of the model of the Kresge’s core business. But it did not mean that it would also disallow any future competition or eventually any new disruptive forces from Wal-Mart and others. Take another case: the minicomputer company DEC. Ken Olsen was a brilliant disruptor of IBM’s mainframe business, but when the personal computer came along, he asked a question many now snicker at: “Who would ever want a computer in their home?” Did DEC’s eventual failure mean that the theory of disruption was wrong, or did the subsequent disruption of the minicomputer by the personal computer actually confirm, not invalidate, the underlying theory? I could go on. It seems to me that the author’s accusation of Christensen as overusing “hand-picked case studies” is an equally effective criticism of her own analysis.
Doctors, journalists, and democracy, oh my: Throughout the piece there is a clear disdain for the innovator, particularly in Lepore’s caricature of young, noncommitted types who jump from job to job with only a profit-hoarding sense to guide their search. These innovators are painted as the “remorseless” who simply seek to profiteer and break rules for the fun of it. Not sure how disruptors like Julio Palmaz, who invented the balloon expandable stent, or Wilson Greatbatch, who broke rules to develop the first implantable pacemaker, would feel being characterized this way. Neither am I sure that Mike Feinberg and Dave Levin would describe themselves as “remorseless” in launching the KIPP charter schools that would eventually pull thousands of kids out of the inner city. I wonder how the team behind Western Governors University, who went around the rules of academia to find ways to innovate toward competency-based learning, would feel about Lepore’s characterization. By the way, Western Governors University is a nonprofit that has opened up low-cost education to thousands of adult learners trying to better themselves but unable to afford it or come out of the workforce in ways required by traditional academia. Lepore holds-up “democratic values” in some of these institutions as reasons for their protection. Good grief, our very democracy was built by a group of rebels in the colonies who had the crazy idea that people should have the right to life, liberty, and the pursuit happiness and have their rights protected by a living constitutional document. I think also of how disruptive innovation has allowed a set of voices to enter media because they felt they weren’t being heard by elite media organizations that seldom reflected the values of the overwhelming majority of Americans. None of these innovators I have cited were profiteering people who “forgot their conscience.” They were, in fact, quite often motivated by conscience. They violated norms, they broke rules, and they fought the guild mentality that was prevalent in past institutions. Lepore’s broad-stroke characterization of disruptors and their connection to the theory of disruption is quite remarkable in its logical leaps. Are there self-interested, remorseless, and financially motivated people playing in the disruptive arena? Absolutely. Are there the same types of people in other industries and other legacy institutions that are facing disruption? Yes indeed.
A fair point: The idea that in the rush for new and innovative solutions we might leave behind insights and lessons from the past is always relevant. It isn't an entirely new observation, but I found this section of the article reasonably made and would have liked to have seen the whole idea explored in more depth. How do we innovate and break old models while still preserving key ideas and insights from lessons past? Part of the answer might lie in the concept of Dual Transformation—the idea that we need innovation both in traditional institutions and in new pioneering ones. We need traditional forms of education even as we have a moral obligation to find new and innovative ways to deliver learning at lower cost to more people. We need traditional forms of journalism, with its watchdog role and public good, even as we find ways of giving more people voice and input in the creation and dissemination of information. We need traditional models of health care that work to continue and improve safety and overall care for existing patients, even as we find ways to lower costs and provide new ways to save lives for more people. In other words, we need both. That doesn’t mean that innovating with the old will preserve everything that was. But it does mean that there are lessons from those legacy systems that have value. Following the rules does not free our society of the obligation to challenge and find new paths and institutions. Unfortunately, there are also those who would hide behind the arguments of preserving the halcyon days of times past to hold onto the preferential position, hierarchy, and control that they have selfishly guarded. That that so much negative intent is ascribed to the disruptor, while only virtue is implied for incumbent, is a major oversight by the author and leaves her overall argument lacking.
