What the Theory of “Disruptive Innovation” Gets Wrong | Hacker News Reader

What the Theory of “Disruptive Innovation” Gets Wrong

newyorker.com

57 pointsuladzislau30 comments

She seemed to state that Clayton Christensen cherry picked his companies and excluded examples that didn't support his theory. And that there are many companies which have failed or succeeded outside of his theory of disruption.

To summarize, we pay too much attention to disruption nowadays. We overuse it to destructive ends, and she seems to think it wasn't based on rock solid evidence. The article ends with a reference to more organic, collaborative and poetic connections.

Not a strong critique in my opinion.

Indeed, she offers no alternative. I suppose we're to sit around trading DFW novels and pretending that technology can't "disrupt" whatever industry we're working in.

I'm not sure how that point of view is helpful or meaningful.

She didn't get around to critiquing his theory, just the over-use of it.

And her summary didn't include the theory's essence: that incumbents are captured by their present customers - even when they are 100% on top of the coming tech, they can't desert them, and can't see the new customers (which, to be fair, don't strictly exist yet).

I think his key background evidence is pretty strong: that technology improves faster than we can absorb it e.g. PCs are now faster than they need to be for most tasks. Although we do demand more of our PCs, they have improved at an even faster rate. This relates to the above theory in that we now that they are fast enough, we are willing to pay for some other quality - like portability. For businesses that have worked at improving the technology along the dimension that was in demand for a long time (e.g. speed), they have organized everything around this - R&D, manufacturing, marketing, positioning, sales, partnerships, even their release schedule. They are optimized for getting better at that dimension and selling that dimension. So.... when that dimension is no longer in demand, all their optimization works against them. It's difficult to change emphasis, both for engineering and marketing.

Right now, Intel - the inventor of the CPU (and of the integrated circuit, can you believe it?) - is putting its truly incredible resources, knowledge, talent, skill and market position into more power-efficient CPUs (instead of higher-performing) for smartphones.

But your smartphone doesn't use them.

No, I can't believe it, if only for the simple reason that the invention of the IC preceded the founding of Intel by roughly a decade. One of Intel's founders was one of the co-inventors, but at the time of the invention working at Fairchild.

I think innovation and the disruption it brings is real - but I think this article does a good job of arguing that the inability of incumbents to respond is overstated by the theory and its proponents.

Intel hasn't closed down and given a few years may be stronger than ever.

Conversely your smartphone connects to a lot of mainframes which are stacked to the brim with Intel processors and that's not changing.

Intel have tons of breathing room in the market - and they only need to succeed at beating ARM once to break their hold. They have faster fabs, more fabs and more engineering talent then anyone else in the business. They're not going anywhere.

I doubt they can apply more hardware design engineering talent that the whole ARM ecosystem can; they certainly haven't as of the last time I checked (which was a while ago).

I also doubt the "beat them once" thesis. In general, to get "everyone" to switch you need a 10X superiority over the competition, and I seriously doubt that's in the cards. The ARM ecosystem is also extraordinary rich, and I can't see how Intel could replicate it. Finally, I seriously doubt the big players, some of whom have their own chip designs, and at least in the case of Samsung manufacture them, would be happy to move from the ARM ecosystem to an Intel monoculture where they'd be at Intel's mercy forever after.

Ironic how most of the criticism of "disruption" now comes from Progressives and the Left. It's very strange to see them defending the staus quo, such as taxi cab medallions and anti-sharing laws like no sublease clauses in rental agreements. It is almost as if they are now "conservatives" trying to defend a world view from the last century.

They've largely won, and are now the "reactionaries", if you prefer, trying to defend their establishment.

Poor critiques of disruption like this one are only going to come thicker and faster now that many academics are starting to feel threatened by MOOCs and online learning.

Critiques of disruption have been around for years, most notably from within the HBS faculty itself. Porter was quoted recently in the NYT as saying: "If Clay and I differ, it’s that Clay sees disruption everywhere, in every business, whereas I see it as something that happens every once in a while... And what looks like disruption is in fact an incumbent firm not embracing innovation [at all]."[1]

The NYT article cited is in many ways a much better illustration of what I think Lepore is trying to get at in this article, namely that disruption is not a universal theory of technology in business. That's a view I'm very sympathetic towards. Lepore ends up making the bigger claim that the theory has no predictive power and is only a useless after the fact justification for why businesses perform in certain ways. I think that's totally unjustified. If business theories were as certain as calculus we'd all be rich, but none of them are. That doesn't make them useless, and the theory of disruption certainly isn't so vague as to be useless.

Because Lepore isn't across the field in any detail, the article ends up being a mix of side swipes at Christensen and caricatures of people in the startup community. When you have to go through the bibliography of someone's book to find fault with the choice of a reference to a tangential point (as the author has done here), you start to come across as ranting rather than making a point of any value.

I think the second last page is revealing though, as the author (who is an American History professor at Harvard) takes aim at the application of disruption to universities. There's a big problem here, because most academics are pedagogues who love education for the sake of education, and can't accept or can't see that for most people, university is a job certification factory rather than a place of intellectual inquiry. I read a lot of MOOC and disruption-hate from academics, and much of it tends to stem from this problem. We're talking each other and I'm afraid it's only going to get worse.

[1] http://www.nytimes.com/2014/06/01/business/business-school-d...

> Poor critiques of disruption like this one are only going to come thicker and faster now that many academics are starting to feel threatened by MOOCs and online learning.

Most of the article is actually a pretty good critique of Disruptive Innovation theory as being selectively applied in a post hoc manner that is also lacking predictive abilities.

Even though I consider my current business endeavor a "disruptive innovation", I still thought this was a really good article that breaks through the often mindless praise of disruption (which I myself have been a part of.)

I think that these types of counter arguments are valid in a self-correcting society.

(Although I found the article ended on a weak note, even though it started strong.)

I don't disagree with you that disruption is often misapplied and mindlessly praised, I just think this article didn't do a good job of illustrating either of those points.

I think the NYT article I cited did a much better job of addressing both points.

Why do you believe that the fact that the critiques use education as an example is proof that the critiques are knee jerk/defensive reactions to disruption in a space, and not simply due to that being the industry that the author (given they are an academic) has the most experience/exposure in?

You're right, it is an inductive assertion based off the quality of the piece and its focus, the author's profession and the author's background so I'm uncertain about that. I'm more keen on highlighting the fact that I think technology is getting scapegoated as the enemy in academia because two groups of people see the problem differently and are talking past each other.

It doens't neccesarily have to have predictive power to be useful....

But it seems pretty unclear if the theory of disruptive innovation has any predictive power at all.

You seem to be avoiding coming down on one side or the other. Do you think the theory has predictive power? If so, on what basis do you think that?

I do think it has predictive power, in the narrow areas in which it can be applied. I think if you're a media executive and you've seen what's happened to the NYT, you know that newspapers aren't the only media vertical that is going to face the problem of disruption. Thinking behind it is probably what's driving deals like the purchase of Maker Studios by Disney[1] - if Disney just wanted to innovate they would have just invested in better digital content delivery. Buying Maker acknowledges that lots of lower quality content producers can acquire the same audiences as high quality large budget Disney productions like Hannah Montana.

You don't see disruption everywhere, for example Google and Facebook are hardly 'disruptive' as companies, but I think in the right cases the theory has predictive power and is a necessary tool in the belt of people who work in technology.

1. http://www.nytimes.com/2014/03/25/business/media/disney-buys...

Reading his books, my overwhelming impression is that it's unclear if there's any predictive power. I'm unsure how you'd go about demonstrating it one way or the other - but that's Christensen's job. That he hasn't done it is telling. [ He does seem to be trying to push it as an all-encompassing theory, to be "people buy what they want" (and redefining "technology" more abstractly in subsequent editions, to include any way of doing any thing). And he's got that consultancy going... always good for "truth"... ]

However, I'm not sure how you see Google as not disruptive...? By revenue, it's an advertising company, and a different ballgame from print media etc. (advertisers get live feedback on performance - focus groups can't match that). The bidding idea is also brillant (from goto/overture) - google gets the highest possible price, but your competitor is the bad guy. Though I guess you might say it's the internet that's disruptive, and google's just along for the ride.

It seems to me that Christensen's theories have always been post-facto hooey. Indeed, the ultimate irony is that he has ridden a wave of success essentially by being credited with "explaining" Apple's success when he not only didn't, but can't even explain it post-facto, and — as the article points out — was hilariously and embarrassingly wrong about the iPhone. What this article points out is that he was wrong even about the very cases (hard drives and steam shovels) on which he built his theory, having cherry picked data and defined his terms to suit his conclusions like a champion.

There are definite insights in his books. I've seen the issues he discusses at play first hand. But for every incumbent disrupted by a feisty startup, there are plenty who are absorbed by incumbents, or have a short spectacular success followed by a flameout, while the incumbents trudge on at their own pace.

The view that education is or should be a job certification factory is one of the biggest problems with American education today and one of the reasons we don't have a democracy. Education should be about teaching people how to learn, how to teach themselves, how to think critically, and how to challenge both authority and their own ideas. That's what a liberal arts degree once aspired to be. That what a high school education should be, but really never has been. University should not be a job certification factory. We have trade schools and apprenticeships for that.

Feels like the author is trying hard to debunk the book's claims by attacking the definitions. I would think that by providing counter examples or counter thesis would have been more effective.

For example, saying the excavator firm perished due to lack of innovation was due to mismanagement and LBO rather than poor product and market was really missing the point.

And the last paragraph "Disruptive innovation is a theory about why businesses fail. It’s not more than that. It doesn’t explain change. It’s not a law of nature. It’s an artifact of history, an idea, forged in time; it’s the manufacture of a moment of upsetting and edgy uncertainty. Transfixed by change, it’s blind to continuity. It makes a very poor prophet"

I think its more than just that. It talks about how people adapt to changes and how the needs interact with supply of products, services and even resources. Thats how fracking and shale came about isnt it and author is saying it doesn't explain change? Saying disruptive innovation is a poor prophet is just inaccurate. It may be because the timeframe is off, observations are off or the space itself is off. I wouldn't shrug it off just like that...

Heh, a nice piece of post-hoc rationalization. Compare to this article in the newyorker from 2 years ago (different author, but still...): http://www.newyorker.com/reporting/2012/05/14/120514fa_fact_...

(h/t to Jay Rosen on twitter: https://twitter.com/jayrosen_nyu )

This may be the most overwrought piece of writing I've ever read. Can someone summarize it? I couldn't make it past the first page. It didn't seem like it was going anywhere insightful though.

In brief, the article contends that the idea of disruptive innovation as outlined by the book "The Innovator's Dilemma" lacks any substantive historical analysis and rests solely on cherry-picking very specific businesses and industries.

The main "meat" of the criticism begins at the bottom of the second page and spills over to the third: http://www.newyorker.com/reporting/2014/06/23/140623fa_fact_...

Thank you.

That's true, because favorable-normative analysis of "disruptive innovation" suffers from survivorship bias. However, as a posit-ive description of a phenomenon, "innovation" simply put, exists, and I'm not sure what "can be done about it" - after all, "biological natural selection" is basically "disruption", as is "the scientific method".

So what? Might as well be disruptive, on the off chance you do society a favor. If you're disruptive and profitable, odds are you're likely doing society a favor (marginal though it might be).

That makes very little sense, it's a theory that can apply to anything at all.

For any X at all: Sure, there's not actually a lot of evidence that X is correlated with success and/or social benefit, but might as well do X anyway on the off chance that you'll be doing society a favor!

What? That's kind of religious thinking, I guess.

(Also, what about the 'off chance' you'll be making society worse?)

But I'm not sure "be disruptive" actually means much at all anyway. I'm not sure you do either. The scientific method is 'basically disruption', for what definition of 'disruption' exactly? Apparently everything is 'basically disruption'. Or only the things we like?

A complete misunderstanding of the nature of disruption and a patently false statement that disruption is about the past and an post hoc justification.

Disruption is about providing a better product in the market in the midst of legacy producers who have become slow and indifferent due to their success. We see it every day with thousands of startups and legacy companies alike; google, apple, uber, tesla, and many more. It didn't start with The Innovators Dilemma and the author doesn't define it, mere he observed some of its properties.

This seems to be the type of nostalgic meandering that's used often in the publishing industry to justify its value of legacy aesthetic over innovation.

There are plenty of counter examples cited in the article. And she also points out some significant flaws in the examples Christensen used to support his original theory. Maybe some people just aren't comfortable having their new orthodoxies questioned?

Companies =/= products

"Disruption is about providing a better product in the market"

Errr, no, or not as described in the first book. The disruptive companies start out providing a "worse" product, for the purposes of the legacy companies' market niches, but that satisfies another niche, frequently (always?) a new one. One that the legacy companies are ill or entirely unfit to satisfy.

With the experience in those lower end niche markets, the disruptive innovator eventually moves up market with a better product, and legacy companies can evaporate "overnight" as these things go.

My favorite example was steam powered excavators vs. hydraulic, post-WWII (plenty of weapons systems used hydraulic actuators, they were fast). The former were used for big stuff, as I recall nothing smaller than sewage lines. The initial hydraulic ones had a bucket size of, say, 1/4 a cubic yard, way too small for what the former did.

But they were just the right size for providing utility access to a home, a market which exploded after the war, a market which was previously handled by guys with picks and shovels.

Quality, and the size of the jobs they could take on, steadily improved, until they could do what steam excavators could do ... without the danger of a chain snapping and hitting the operator or others. At which point they had a vastly superior product, satisfying a previously unrealized desire, and the legacy companies died fairly quick and hard deaths (he goes a lot more into why they generally can't adopt the new technology before it's too late).

The book had similar examples of "dirt bikes", the not very hi-fi Sony transistor radio (I think), and of course several generations of disk drives, for which he had the best data and for which I had the best background (starting programming in 1977 so I watched the transitions).

OK, now read the section of the article pertaining to excavators, and off the top of my head, I've never heard of O. & K. and Demag, and I'll note Hitachi probably suffered serious destruction and disruption of the physical plant and business as part of our WWII bombing campaign (just read the book Whirlwind on that, really bad).

Bucyrus is a company I've heard of, in terms of their huge machines, that were used to operate big mines and the like (I live close to this https://en.wikipedia.org/wiki/Big_Brutus, and while a Cub or Boy Scout in the '70s visited it while it was still operational, and a power plant I think it fed). Their doing OK until the US largely ended that sort of thing (NIMBY, BANANA, etc.) could easily reconcile both observations. That the author didn't try to make the case that their excavator business stayed healthy is probably telling.

Hmmm, per Wikipedia, https://en.wikipedia.org/wiki/Demag Demag was a big crane and the like company, and until being bought by an American company in 2011, did "bridge cranes, hoists, material handling equipment, gantry cranes and port technology." But I did find hits on their name and excavator.

O. & K. is another former German company: https://en.wikipedia.org/wiki/Orenstein_%26_Koppel where excavators are prominently mentioned in the Wikipedia article. However they suffered massive disruptions in WWII, e.g. you can guess which "race" Orenstein belonged to, and how long that family was allowed to own company. Bombed, part ended up behind the Iron Curtain ... again, hmmm.

Yeah, if all three of these foreign companies essentially started anew after the war, they're health wouldn't at all invalidate the excavator example in the book.

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