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(originally published by Booz & Company)


The Discipline of Managing Disruption

S+B: That’s fairly fundamental advice: Stay with the highest source of value and resist expediency. Philosophers have been saying this for millennia. But it seems so difficult to put into practice.
CHRISTENSEN: People wrestle with it all the time. The reason has to do with fundamental forces in our brains and bodies, and in our teams. For example, most of us have a high need for achievement. At the level of a corporation, we measure this as profit; at the level of a family, it’s more personal. But we all tend to do whatever activity brings us the most immediate and tangible evidence of achievement. That makes it difficult to avoid marginally driven actions.

I would frame the basic problem this way: How can you make sense of the future when you only have data about the past? That’s the role of theory, to look into the future. You have to have a viable perspective about why things might turn out differently than they did last time. For those who don’t think that way, when the data tells them that things are going wrong, the game is over.

One reason it’s so hard for senior executives to think this way is that they don’t have the right kind of data. Data is heavy. It wants to go down, not up, in an organization. In other words, most employees, just by the nature of their responsibilities, don’t want to provide data to their bosses. When there’s a problem, they want to solve it and tell the people above them that they solved it. Information about problems thus sinks to the bottom, out of the eyesight and earshot of the senior managers. The higher you go up the hierarchy, the less information is available to make decisions with.

S+B: How does a senior executive know which theories of the future are worthy of attention?
CHRISTENSEN: If they’re good theories, you ought to be able to articulate the circumstances under which they would and would not be salient. Then you would act accordingly—by treating them not as answers, but as opportunities to ask good questions. For instance, if you’re concerned about disruption, you would ask about your current circumstances: “Which competitors are threatening me and which am I more likely to threaten?” Disruption is a question about who’s going to kill whom.

You might also ask, “What is the job to be done?” Every company needs a robust theory of the job that it’s facing. At the fundamental level, most jobs don’t change very much, even though the technology does. When he was the emperor of Rome, Julius Caesar had to exchange messages rapidly with his far-flung governors. He used horsemen with chariots. Today, we have FedEx, but the job hasn’t changed. If you’re focused on the job that has to be done, you’ll be more likely to catch the next technology that does it better. If you frame your business by product or technology, you won’t see the next disruptor when it comes along.

At FedEx, if they’re focusing on the job to be done, then they’ve already been looking for years at the question, “How much of our volume will be displaced by electronic transmission?” Fortunately for them, it hasn’t happened yet, because the Internet forced another disruption instead; it allowed the movement of packages to displace retail stores. But the question remains persistent.

S+B: Have you known executives who think this way?
CHRISTENSEN: It’s hard because almost all of them, probably including me, tend to stop asking good questions—or else their successors do. For example, at Intel, Andy Grove really got the concept of disruption. His famous phrase, “Only the paranoid survive,” was a statement about how to respond to disruption. In fact, you could argue that Joseph Schumpeter described what happens in business with his theory of creative destruction; I explained why it happens through disruption; and Grove showed how to manage it.

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