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Disrupting ‘disruption’: Skepticism grows about one of business’s biggest ideas

While this contentious quarrel may appear to be just another campus wrestling match between intellectuals, the U of M’s Andrew Van de Ven sees much more at stake.

A concern — whether disruption theory is anywhere near as useful as its advocates claim — has been whipping up more disruption about disruption.

As Andrew Van de Ven hands a visitor to his University of Minnesota office one of our time’s most celebrated business books, “The Innovator’s Dilemma,” he says, half in jest: “I’m biased.” On the second page, Van de Ven is identified as one of two professors listed as editors for this book and four others about the management of innovation and change.

Van de Ven is sitting in his bite-sized office at the Carlson School of Management, where he has held an innovation chair since 1981. We’re meeting to talk about a big-time flap in his field, the brouhaha over “disruptive innovation.” Van de Ven is one of the country’s foremost experts on innovation, but he lacks the superstar status accorded to the author of “The Innovator’s Dilemma.” That would be Clayton Christensen, whose name has become a household word in business schools, at technology gatherings, on corporate podiums and panels and in precincts far beyond the business world.

Each of the two latest “Thinkers50” rosters of the world’s 50 leading management pundits, in 2011 and 2013, ranked Christensen at the top of the pack. The Economist has called “The Innovator’s Dilemma” one of the six best business books of the last half century. Christensen’s theory of disruptive innovation has spawned a cottage industry. Last year, Atlantic magazine singled out “disrupt” as the buzzword that most embodies the culture of Silicon Valley. “Coined by Harvard Business School professor Clayton Christensen in 1995, it refers to new technologies that are powerful enough to change the way an entire sector operates,” the magazine said. “This is the dream behind every start-up: that what it builds becomes the next Facebook or Windows or iPod, a product that will infiltrate consumer life and demolish competitors.”

But now a sometimes snarky weariness about the tedious, often unthinking repetition of a single word is settling in. A few months after Atlantic shined the spotlight on “disrupt,” the magazine unveiled an app replacing the word with “bullshit” in web browsers.

Have theory’s backers overreached?

A related concern — whether disruption theory is anywhere near as useful as its advocates claim — has been whipping up more disruption about disruption this fall. Two months ago, Andrew King, a faculty member at Dartmouth College’s Tuck School of Business who has long been skeptical about various aspects of the theory, attacked it, and by extension its far-flung fandom, head-on.

Clayton Christensen
Clayton Christensen

Christensen designed his theory to explain how many well-established businesses fail. Since 1997, when “The Innovator’s Dilemma” was first published, this theory has become the platform for a massive effort to help companies shape strategies to avoid failure. His contrarian concept contends that many highly respected, well-managed companies falter because they’re too good. That is, they focus too much on sustaining their successful innovations so they can continue to satisfy their existing customers. But in the process of doing well by these customers, they become vulnerable to being blindsided by smaller upstarts aggressively pushing newer innovations.

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King and other critics readily admit that new technologies have knocked out entrenched incumbents in various industries in recent years, just not nearly as many as the theory’s advocates believe. They say Christensen has not done enough to identify the many circumstances where his theory doesn’t prevail. In September, the MIT Sloan Management Review published King’s critique, written with University of British Columbia graduate student Baljir Baatartogtokh, of disruption theory. They found that of the 77 case studies cited by Christensen in his original research for the theory, only 7 met all of its four key conditions. Their overall conclusion: “Following simple theories or using quick analogies may provide a sense of certainty, but they are no substitutes for careful, fundamental analysis of the nature of competition and the sources of competitive advantage.”

A credible challenge

Andy Van de Ven has known both men for years. He respects Christensen’s work, but views King’s paper as legitimate research. Van de Ven noted that the Sloan Management Review is a credible, academically refereed journal. (It ranked 44th on the Financial Times’ 2012 list of the 45 leading business research journals. Two journals published by the Academy of Management, of which Van de Ven was president in 2000, ranked first and third on this list).

Andrew Van de Ven
Andrew Van de Ven

Van de Ven agrees that the widespread use of Christensen’s theory, and the saturation-level popularity of the word “disruption,” have raised issues. For one thing, he said, the theory is being applied to bring about change beyond for-profit businesses, in fields such as in public education and health care. Using it in those sectors is typically more complicated because they have direct stakeholders beyond primarily shareholders. For example, public schools have to deal with administrators, teachers, students and parents. As for businesses, Van de Ven agrees that many large corporations — for example, 3M and Medtronic in the Twin Cities — have found ways to survive and prosper despite the constant attempts of upstarts to blindside them by touting new technologies. He also said Christensen lost control of his big idea as it came to be invoked so widely, and often so incorrectly. “People can and will interpret an idea in any way they like,” Van de Ven said.

Christensen became “more of a true believer” in his theory as the years passed, when he could have been looking harder for instances where it hasn’t worked, Van de Ven added. The ultimate test for any theory is how universally it can be applied — does it hold across all industries and technologies or are there anomalies, circumstances where it doesn’t work so well? Van de Ven said he would love to see King and Christensen collaborate to identify more anomalies in order to modify the theory.

Bear hugs? Maybe not

But Christensen and King, who have known each other since they were graduate students at MIT, don’t seem likely to engage in bear hugs anytime soon. They did meet face-to-face recently, in Christensen’s office, before King’s piece — titled “How Useful Is the Theory of Disruptive Innovation?” — was accepted for publication. Christensen described their discussion as “a good conversation about a number of things related to disruptive innovation.” King said it was not a contentious meeting. Christensen said he welcomes criticism of his theory, but he was not happy about King’s article, and King has poked holes in Christensen’s response to it.

That response came late last month, in a question-and-answer session with the Boston Globe. “I felt the rigor of their research was greatly lacking,” Christensen told the Globe. He argued that while King’s paper was based on roughly one interview for each of the 77 studies, the original research for the disruption theory was based on many times that number of interviews. Christensen added that King failed to understand how disruption plays out in different industries, and said his test of the usefulness of the theory was flawed.

Christensen also circulated a study of how well the theory has performed. Thomas Thurston, a fund manager at a San Francisco-based private equity firm, did the study. He concluded that disruption theory is the foundation for “the most accurate, thoroughly vetted, quantitative prediction models of new business survival or failure in the world today.”

Why the dispute matters

While this contentious quarrel may appear to be just another campus wrestling match between intellectuals, Van de Ven sees much more at stake. He said Christensen’s theory matters, because it has led business leaders to be more aware of an issue critical to their survival: how to raise their companies’ capacities to innovate and stay abreast of new technologies.

It also matters because the magical prospect of “disruption” is constantly cited by boosters to lure investors and customers to products and services that often don’t live up to their supporters’ rose-tinted claims. When prototypes of Google Glass, a wearable device designed to enable users to communicate hands-free with the Internet, went onto the market three years ago, they drew rave notices. The Business Insider reported that the glasses have “the potential to disrupt” nine industries including Hollywood, air travel, global positioning systems, construction and home maintenance, health care and the guide and tour business. But the devices ran into privacy concerns and questions about how helpful they were. Last January, Google announced it would pull the product off the market. Recently, the Intelligent HQ site included Google Glass on its list of the 12 biggest technology flops of 2014.

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When Christensen unveiled his theory in the mid-1990s, his timing turned out to be propitious. Euphoria over the Internet was rising to a fever pitch. An abundance of technology startups were aggressively marketing themselves as disrupters.

Christensen has many followers in the Twin Cities. In 2009, Curt Johnson, a former Metropolitan Council chair and chief of staff for Gov. Arne Carlson, co-authored “Disrupting Class.” Christensen was the principal author. The book called for building disruption theory into strategies to improve the nation’s K-12 public schools. It quickly became a best-seller.

Questions about Christensen’s theory have been simmering for years. Last year, they burst into view when the Jill Lepore, a history professor at Harvard and a New Yorker staffer, roasted Christensen and “The Innovator’s Dilemma” in a lengthy essay published by the magazine. Christensen battled back, branding her piece “a criminal act of dishonesty.” He said it was based on outdated research.

Christensen’s health hasn’t made things any easier for him. In recent years, he has fought off an array of medical problems: a heart attack, a stroke, cancer. He has said the stroke, which caused him to lose his ability to speak and write for a time, forced him to relearn words literally one at a time.

Some accord on abuses

Despite their differences, King and Christensen seem almost on the same page in one respect. King slams the practice of citing disruption theory to explain almost anything. It’s been invoked to understand the ascent of millennials, the rise of terrorism and now even “to understand the Donald Trump campaign,” King said last month in a video clip.

Similarly, Christensen himself has expressed regret about the “wide misapplication of the word ‘disruption’ into things that I never meant it to be applied to.” He recalls that In 1998, Andy Grove, then chairman of Intel, said executives at his company preferred to describe his theory as “the Christensen Effect” instead of disruptive innovation. “They were doing this to be more precise in their language, because they found the term ‘disruption’ to be too broad and easily misapplied. I just couldn’t ever get comfortable with naming the theory after myself. But in retrospect, I wish I had had the wisdom to adopt Andy Grove’s insight and apply a different term that was even more precise and less likely to be misapplied by others.”

Christensen said the Harvard Business Review will publish an article soon offering examples of how the term “disruptive innovation” has been misapplied, “often at great peril.” So perhaps both Christensen and King would agree on one point: It’s time for a timeout on the use of the word “disruption.”