In the minds of many, the financial crisis has given innovation a black eye. Disruption theorist Clayton Christensen disagrees.
Clayton M. Christensen thinks big. In an era when academics often focus relentlessly on a narrow area of specialty, Christensen, the Robert and Jane Cizik Professor of Business Administration at Harvard Business School, seeks out new arenas in which to apply his thinking. He is the author or coauthor of a number of influential books on innovation, including The Innovator’s Dilemma and The Innovator’s Solution, and is best known for his theory of disruptive innovation, which describes the way new technologies (and the companies that pioneer them) can displace old ones.
But Christensen has also applied his ideas about disruptive innovation to public education—and now health care. With two physicians—Jason Hwang and the late Jerome H. Grossman—Christensen recently coauthored a book on health care, The Innovator’s Prescription (McGraw-Hill, 2009).
Christensen spoke with MIT Sloan Management Review senior editor Martha E. Mangelsdorf in fall 2008—on topics ranging from the role of innovation in financial markets to the challenges facing the U.S. health care system. The following interview has been edited for length and clarity.
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Professor Christensen, tell us a little bit about what you think the effects of the financial crisis and economic downturn will be on the environment for innovation.
I think it will have an unmitigated positive effect on innovation.
Well, it will force innovators to not waste nearly so much money. One of the banes of successful innovation is that companies may be so committed to innovation that they will give the innovators a lot of money to spend. And, statistically, 93% of all innovations that have ultimately become successful started off in the wrong direction; the probability that you’ll get it right the first time out of the gate is very low. So, if you give people a lot of money, it gives them the privilege of pursuing the wrong strategy for a very long time. And in an environment where you’ve got to push innovations out the door fast and keep the cost of innovation low, the probability that you’ll be successful is actually much higher.