Good Days for Disruptors

In the minds of many, the financial crisis has given innovation a black eye. Disruption theorist Clayton Christensen disagrees.

Clayton M. Christensen, the Robert and Jane Cizik Professor of Business Administration at Harvard Business School

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.

That’s counterintuitive.

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.

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4 Comments On: Good Days for Disruptors

  • MR JOHN CARPER | April 6, 2009

    This interview suggests that prosperity can impede innovation by “insulating” the would-be innovators from market forces.

    Does this mean that we should be able to see the best innovators in the organizations/countries with the least wealth?

    Is successful innovation as simple as “exposure to the market” or are there other factors?

  • mswisdom | April 6, 2009

    Ms.Kathleen Eason,
    Adjunct Faculty on
    Sabbatical

    I like what is said, regarding,
    “[There are] some markets where
    the public good isn’t necessarily
    served by capitalism. [I.E.]
    Education is a market like that.”

    Also, I share your wisdom in the
    following: “I think it [Environment for Innovation]will
    have an unmitigated, positive
    effect on innovation.”

    Just as important is why the above quote is a wisdom statment.
    “If you give people a lot of
    money, it gives them the privilege of pursuing the wrong
    strategy for a very long time.”

    Simply, prosperity is without
    conscience. When the psychology of need is removed … positive
    motivators are also removed.

    Thus, you have a prosperity
    reality that is also without
    practical application because
    it is viewed as boring and not
    needed, in light of, the
    “privilege of prosperity.”

    If there is any doubt the
    above statements are not true…
    may I suggest a simple reading of
    any daily news that gives front
    page coverage to R.I.C.O.
    activities that also believed
    the “privilege of prosperity” to
    be “fool-proof.”

    There is an absence of moral
    conscience when monies abound
    and without the prerequisite of
    redress of expenditures.

    Thank You!

  • awwd | April 16, 2009

    Giving people lot of money means in my opinion having almost unlimited resources. Thus, why innovate, current way is good enough.
    Profit from wellness rather from sickness is a great idea which provides institutions a reason to innovate because at the moment people go to health care institutions when they are sick. Institutions making profit from wellness will persuade people also to think differently so the current sickness treatment institutions will have to think upside down for their survival.
    Athula Dharmawardhana

  • kuiper | October 14, 2009

    I am searching for a previous article (which I read in the printed version of the magazine) which explained how when big companies innovate in an area in which some small companies are innovating, the big companies bring legitimacy to the new innovation.
    I would appreciate it if someone could point me to this article.
    My email address is: femialla_at_hotmail.com. (pls replace the ‘_at_’ in the email address with @)

    Thanks
    Femi Alla
    http://www.linkedin.com/in/femialla

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