CAMBRIDGE, Mass. — It is a business buzzword, or perhaps a business buzz-phrase, that everybody uses in the nation's boardrooms: Disruptive innovation. But what does it mean and what are its implications for how a company can react to challenges?
In a short video on Harvard Business Review's website, HBR.org, Clayton M. Christensen explains the concepts that made him one of the most sought-out consultants on the planet.
Christensen, who is the Robert and Jane Cizik Professor of Business Administration at Harvard Business School and author of "The Innovator's Dilemma," tells the story how Intel's CEO Andrew Grove gave him 10 minutes to explain his theory. Grove asked Christensen to tell him what he thought Intel should do. Instead, Christensen gave Grove an example of how disruptive innovation changed a different industry.
"Rather than telling him what to think," Christensen said, "I taught him how to think so he could reach his own conclusions."
The experience not only gave Grove ideas on how to apply the lessons to his own company, it taught Christensen the value of giving other people information and ideas so they can make more informed decisions.
"That changed the way I teach," Christensen said. "It changed the way I talk."
The theory of disruptive innovation was developed by looking at the history of several industries. Companies found ways of doing things less expensively at the bottom of markets and move their way up to challenge those at the top.
"Data is only available about the past," Christensen said.
Christensen said because there is no data, there is only one way to look into the future. "You have to have a good model," he said. Data builds these models or theories. Then you look at the future through the lens of the theory.
This article features content from hbr.org.