Bloomberg Business Week: When the New Yorker this week published Harvard historian Jill Lepore’s sharply written dismissal of “disruptive innovation,” it was an attack on one of the most widely cited and celebrated ideas in modern business. As first laid out by its creator, Harvard Business School professor Clayton Christensen, in his 1997 book, The Innovator’s Dilemma, the theory holds that established companies, acting rationally and carefully to stay on top, leave themselves vulnerable to upstarts who find ways to do things more cheaply, often with a new technology. The book became a bestseller in 1999, at the height of the dot-com boom, as it seemed to describe the threat e-commerce posed to established companies. Christensen expanded on it in a series of sequels, including The Innovator’s Solution, The Innovator’s Prescription, about health care, and Disrupting Class, about education. Disruption, as Lepore notes, has since become an all-purpose rallying cry, not only in Silicon Valley—though especially there—but in boardrooms everywhere. “It’s a theory of history founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation, and shaky evidence,” she writes. In the article, she accuses Christensen of poor scholarship (handpicking case studies that conform to his theory); misreading history (some companies he casts as doomed continued to perform well); and myopia (missing, for example, the role unions played in the collapse of U.S. Steel). Lepore also notes that a fund manager who used Christensen’s theory as an investment strategy lost even more than most in the Nasdaq implosion of 2000.
Posted on: Sun, 22 Jun 2014 01:11:44 +0000
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