Just whisper the word “disruption” if you want to scare the life out of many business leaders. But contrary to some claims, disruption can be averted, and many businesses find ways of managing through it.
If you want to capture the attention of a business leader, say the word “disruption.” At least, that was the reaction of Andy Grove, then the CEO of Intel Corp., when he first heard the disruption theory espoused by Harvard Business School professor Clayton M. Christensen.1 Christensen argued that even when a company does everything right — for example, focuses on its customers — it remains vulnerable to competition from unexpected sources. Christensen had seen a pattern of market leaders being upended by entrants in the hard disk drive and steel industries, among others. Grove called Christensen’s message “scary,”2 and indeed, over the past 20 years, Christensen’s observations have led to widespread fear and paranoia. In the minds of many executives, disruption is just around the corner, and the fear is palpable.
Seeing that fear has led some researchers3 to question whether such emotion is justified. Using the examples of disruption that Christensen cited or anticipated, academics such as historian Jill Lepore, writing in The New Yorker, and Andrew A. King and Baljir Baatartogtokh, writing in MIT Sloan Management Review, have attempted to test the facts against the theory by looking at questions such as whether the claimed disruptions actually ended up causing businesses in their path to fail.4 Although both analyses were more nuanced than determining that simple relationship, the researchers found that the claimed link between a disruptive innovation and significant trouble for established companies often did not hold up. This led them to conclude that the theory did not have a solid basis and that managers could place less weight on such concerns.
However, just because the hypothesized link between disruptive technologies and the failure of a company is weak does not necessarily mean disruption cannot happen. Instead, my contention here is that two decades of managerial scholarship has revealed a set of reasons why that link might not be present strongly in the data. Specifically, contrary to some claims, disruption can be averted. Indeed, although disruption can happen, many businesses find ways of managing through it, and this can weaken any relationship between a disruptive event and the actual disruption. To be sure, facing disruption is no picnic.