What to Read Next
Clayton M. Christensen, interviewed by Karen Dillon
Clayton M. Christensen’s Theory of Disruptive Innovation has had an undeniable impact in business over the past two decades. In this Q&A with longtime collaborator Karen Dillon, Christensen discussed the impact of disruption in today’s tech-centric world and why the theory is still such a powerful tool for decision-making, even as it continues to evolve.
Rita Gunther McGrath
The Theory of Disruptive Innovation presciently explained that fast-moving disrupters entering the market with cheap, low-quality goods could undermine companies wed to prevailing beliefs about competitive advantage. In the past decade, however, disrupters have changed dramatically. They now enter the market with products and services that are every bit as good as those offered by legacy companies — and make it harder than ever for traditional businesses to compete.
Marco Iansiti and Karim R. Lakhani
Collisions between innovators and established players are forcing leaders of existing companies to reexamine how they do business in settings where new players follow radically different rules. For many, making small or incremental changes won’t be enough. They will need to fundamentally alter their operating models, including how they gather and respond to information and how they interact with their customers.
Rather than single-mindedly heading down the path of would-be disrupter, new entrepreneurial companies can and should evaluate the trade-offs between disruption and other strategies. Doing so allows them to choose a strategy that is right for that startup, in that market, at that time, and to learn as the company commercializes its idea. To disrupt or not to disrupt? That is a very important question.
Michael A. Cusumano, David B. Yoffie, and Annabelle Gawer
Innovation and transaction platforms have enabled nearly every type of exchange and activity imaginable in today’s world, earning some of the companies that own them valuations in excess of $1 trillion. But while successful platforms yield a powerful competitive advantage with financial results to match, the nature of platforms is changing, as are the ecosystems and technologies that drive them and the challenges and rules associated with managing them.
Scott D. Anthony and Michael Putz
Why are companies still so vulnerable to disruptive threats? The problem isn’t that they don’t have the right playbook. It’s that well-intentioned leaders often downplay disruptive threats or overestimate the difficulty of response. In simple terms, they lie to themselves. This means that dealing with disruption is not just an innovation challenge; it’s a leadership challenge. Here’s how to avoid the delusions about disruption — and self-sabotage.
When faced with deep uncertainty, organizations often develop a habit of controlling for internal, known variables and fail to track external factors as potential disrupters. This practice lures decision makers into a false sense of security, and it forces a narrow framing of the future. As a result, even the most successful businesses become vulnerable to disruptive forces that appear to come out of nowhere.
Max Wessel and Nicole Helmer
Technology innovation has created a new ethical paradigm. As companies specialize in delivering single components of complex systems, value chains are being reshaped across industries. Product interfaces are becoming standardized, and companies are profiting by perfecting narrow slices of the value chain. This rapid modularization has magnified the ethical implications of every business decision. As businesses work to delight consumers, they must also protect the public trust.
We’re seeing a new species of disrupter emerging in our economy: experience disrupters. These organizations have great products but offer even better experiences, and they’re successfully outmaneuvering their competition by excelling at this. In a nutshell, how they sell is why they win.