"Disruption" is an overused term, not an overused idea. True disruption, following Christensen's model, must involve a higher barrier for incumbents than just sprouting a new product line. If their expertise, infrastructure, and/or market position allows them to do that, they will . . . and they will probably win. Even most of Christensen's own examples fail to work the way true disruption must.
True disruption does occur, when a fundamentally different and fundamentally better way of doing something comes along, but it's a lot rarer than people suppose or pretend. It's barely more common than creating a whole new industry. 99% of the time when people talk about disruption they really mean nothing more than basic product/service differentiation.
>True disruption does occur, when a fundamentally different and fundamentally better way of doing something comes along,
Fwiw, Clayton's definition of disruption is something worse, not better, but just good enough and much cheaper and more accessible than the incumbent it disrupts. Initially it doesn't steal any customers from the incumbent, rather it opens new markets and brings in new segments that couldn't afford the incumbent, and only after that does it begin eating into the incumbent's market share.
Disruption is an ideal, not necessarily a fact about the status quo. It's an ideal as old as David and Goliath, embodying the hope (against all odds) that the underdog might one day overcome a much stronger competitor.
Most of the time, the underdog just gets squashed and we never hear about it.
Ideals are neither predictions nor diagnoses. They're something we need to fight tooth and nail to achieve, not something we can take for granted. So economists probably shouldn't tout disruption as such a major factor in the success and failure of well-known companies, and entrepreneurs should likewise stop assuming that it will happen as advertised.
Christensen's thesis is very specific though. It's that:
* Companies continue to add features and complexity onto a product to grow their market.
* A competitor comes along with a product that is worse and cheaper.
* Structural forces prevent the incumbents from following because the lost revenue from existing lines of business exceed the potential of new business.
* Competitors continue to grow their market and eat into the dominance of incumbents.
* The competitors then become the incumbents and the cycle continues anew.
That's a very specific chain of events that makes testable predictions and is far from the broad, overly encompassing definition of disruption.
A great example of the disruption process following the Christensen model would be AirBNB. When AirBNB debuted, it was objectively crappier on almost all metrics compared to hotels. However, as AirBNB has grown, it's steadily started addressing it's deficiencies against hotels. At the same time, structural factors meant that Hilton could have never gotten into the same business as AirBNB because they had a brand to protect. As a result, AirBNB is now valued at a non-trivial percentage of the entire hotel business.
I think that is an unrealistically optimistic and friendly interpretation of Christensens' position. I agree that the idealistic aspect of disruption probably explains it's popularity (not to mention the opportunistic aspect). But Christensen cum suis have been propagating disruption as a fact for nearly twenty years, and it has had an enormous influence on the public debate.
And as usual with influential ideas, it's not actually true, and (I think) a very reasonable amount scepticism would have demonstrated that much earlier. As an academic, I really think the global community could have expected more honesty from Christensen.
> Their executives concentrate on complex, expensive products for the highest-end customer. That creates an opportunity for upstarts to come up with cheaper products or services that get them entry into a market via low-end customers.
The article mentions IBM, but doesn't go any deeper. But the description above seems to fit the way IBM has been disrupted by Amazon-AWS to a T.
I can't imagine there is anything scientific about this "study". Not sure how it could "disprove" an idea of disruption.
> King, the Tuck professor, along with Baljir Baatartogtokh, a graduate student at the University of British Columbia, spent two years asking experts about each of the cases Christensen studied. In a third of the cases, old-guard businesses were not actually disrupted, the researchers found. The companies may have contended with innovation, but they were not pushed out of the market by it.
What passes as science these days is asking experts about what really happened in specific cases and seeing if it agrees with Christensen narrative? That's not very scientific.
To be fair, the theory of disruption is also a non-scientific (albeit useful) narrative and having competing competing narratives is useful but just don't try to mask it as science
This clearly shows that we need to disrupt the old and outdated statistics that are powering these studies. Disruption isn't a straight line and you can't fit a straight line to disruption because it's a fractal.
[+] [-] notacoward|10 years ago|reply
True disruption does occur, when a fundamentally different and fundamentally better way of doing something comes along, but it's a lot rarer than people suppose or pretend. It's barely more common than creating a whole new industry. 99% of the time when people talk about disruption they really mean nothing more than basic product/service differentiation.
[+] [-] bgibson|10 years ago|reply
Fwiw, Clayton's definition of disruption is something worse, not better, but just good enough and much cheaper and more accessible than the incumbent it disrupts. Initially it doesn't steal any customers from the incumbent, rather it opens new markets and brings in new segments that couldn't afford the incumbent, and only after that does it begin eating into the incumbent's market share.
[+] [-] kijin|10 years ago|reply
Most of the time, the underdog just gets squashed and we never hear about it.
Ideals are neither predictions nor diagnoses. They're something we need to fight tooth and nail to achieve, not something we can take for granted. So economists probably shouldn't tout disruption as such a major factor in the success and failure of well-known companies, and entrepreneurs should likewise stop assuming that it will happen as advertised.
[+] [-] shalmanese|10 years ago|reply
* Companies continue to add features and complexity onto a product to grow their market.
* A competitor comes along with a product that is worse and cheaper.
* Structural forces prevent the incumbents from following because the lost revenue from existing lines of business exceed the potential of new business.
* Competitors continue to grow their market and eat into the dominance of incumbents.
* The competitors then become the incumbents and the cycle continues anew.
That's a very specific chain of events that makes testable predictions and is far from the broad, overly encompassing definition of disruption.
A great example of the disruption process following the Christensen model would be AirBNB. When AirBNB debuted, it was objectively crappier on almost all metrics compared to hotels. However, as AirBNB has grown, it's steadily started addressing it's deficiencies against hotels. At the same time, structural factors meant that Hilton could have never gotten into the same business as AirBNB because they had a brand to protect. As a result, AirBNB is now valued at a non-trivial percentage of the entire hotel business.
[+] [-] brrt|10 years ago|reply
And as usual with influential ideas, it's not actually true, and (I think) a very reasonable amount scepticism would have demonstrated that much earlier. As an academic, I really think the global community could have expected more honesty from Christensen.
[+] [-] msravi|10 years ago|reply
> Their executives concentrate on complex, expensive products for the highest-end customer. That creates an opportunity for upstarts to come up with cheaper products or services that get them entry into a market via low-end customers.
The article mentions IBM, but doesn't go any deeper. But the description above seems to fit the way IBM has been disrupted by Amazon-AWS to a T.
[+] [-] bobosha|10 years ago|reply
http://chronicle.com/article/The-Undoing-of-Disruption/23310...
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] bko|10 years ago|reply
> King, the Tuck professor, along with Baljir Baatartogtokh, a graduate student at the University of British Columbia, spent two years asking experts about each of the cases Christensen studied. In a third of the cases, old-guard businesses were not actually disrupted, the researchers found. The companies may have contended with innovation, but they were not pushed out of the market by it.
What passes as science these days is asking experts about what really happened in specific cases and seeing if it agrees with Christensen narrative? That's not very scientific.
To be fair, the theory of disruption is also a non-scientific (albeit useful) narrative and having competing competing narratives is useful but just don't try to mask it as science
[+] [-] bru_|10 years ago|reply
[+] [-] kozak|10 years ago|reply
[+] [-] shele|10 years ago|reply