Why Clayton Christensen is Less Relevant Today
Best known for the theory of “disruptive innovation”, Clayton Christensen is one of the most influential thought leaders in modern business. Yet Christensen’s central thesis—that innovation should be pursued at the edge of an organization rather than the core—may no longer resonate with today's managers. In a recent discussion hosted by our partners at the ILO Institute, we heard about why Christenen’s ideas are losing their relevance.
U+, in partnership with the ILO Institute, is excited to bring you highlights from ILO’s Weekly Virtual Gatherings. A little while back, we discussed the legacy of innovation expert Clayton Christensen and explored his ideas in the context of today’s dynamic business environment.
We love Clayton Christensen. He launched corporate innovation as a discipline equal to strategy and operations. He changed the landscape, and improved the lives of millions by helping large organizations change, and adapt to external change, better.
Yet it’s remarkable how much less relevant his core work—the theory of disruptive innovation, outlined in his brilliant book, The Innovator’s Dilemma—feels to large-company leaders today.
We can see why: Clay’s advice often netted down to keeping innovation initiatives at arm’s length from headquarters, the building of lifeboats that might grow eventually to replace the old core. His book The Innovator’s Solution outlined three great practices:
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Engineering out non-core value in products and services, to lower cost in new offerings to folks who felt priced out;
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compete against non-consumption, to target folks who are not your customers today, but should be in the future; and
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accept lower margins, to help push price down.
All brilliant advice for certain kinds of innovation, but not what companies in 2021 are telling us. The most common plea we hear from the top of the org chart is “Help us re-invent our core.” Senior leaders know that what got them where they are won’t drive the next generation, or decade, or growth—and survival. Thinking of innovation in terms of products, thinking in terms of innovation centers at the edge of the organization, does not get them where they need to go. Getting to the core of the org for fundamental change is the heart of the challenge today.
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Launched in 2005, ILO is a membership organization for large companies, government agencies and not-for-profits, bringing senior executives leading innovation together for knowledge sharing and community building. ILO has completed more than 300 best-practice research reports, focusing on emerging challenges and opportunities. To learn more about ILO, membership benefits, and how to join, visit www.iloinstitute.net.