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 / First Quarter 2001 / Issue 22(originally published by Booz & Company)


Monomaniacs with a Mission

Mr. Christensen shows how corporations, in the process of creating capabilities, cultures, and practices to perform certain tasks, systematically preclude themselves from doing other things with equal competence. Capability and disability are two sides of the same coin.

In the 1980s, for example, the makers of minicomputers, with margins of 50 percent or more, struggled to come to terms with personal computers that generated much lower returns. It just didn't fit their value system. And the distribution and logistics systems for the two businesses were quite different.

Resources, such as people and assets, may be redeployed, but business processes and values are difficult to change, largely because this is not part of their design. Thus a corporation's skills can be much more context-specific than its managers realize, and, when contexts are disrupted by technological change, what is thought to be a strength often turns out to be a weakness.

Mr. Christensen outlines the three basic ways in which corporations can respond to contexts that are disrupted: by acquiring firms that have the necessary resources, processes, and/or values; changing their own; or spinning out particular units as independent operations. Of these, the middle option is probably the toughest but, once again, context matters. Resources can be moved around more easily than processes and values. Mr. Christensen suggests, for example, that Cisco System Inc.'s acquisition program has prospered because the company was clear that it was usually acquiring resources (which could be redeployed in an integrated firm) and discarding the nascent processes and values in the young firms they were buying.

How does one make any sense of systemic corporate innovation and the role that zealots may play in it? As I suggested in my book Crisis & Renewal: Meeting the Challenge of Organizational Change, one of the more helpful perspectives comes from ecology. Nature doesn't depend upon forests being renewed by the large, mature trees regenerating themselves individually. Over time the big trees are removed from the system, ravaged by disease, destroyed by fire, and eaten by insects. Their elements are recycled for use in the open patches and ragged edges of the ecosystem, where small-scale organisms, Nature's zealots (a.k.a. weeds), can flourish with equal access to the sun and the rain. Weeds give way to shrubs and shrubs to trees in a never-ending succession of destruction and renewal.

To the extent that corporations can structure themselves as ecologies, perhaps by lighting their own "fires," they may be able to maintain the open patches that allow zealotry to flourish. If their boundaries can be kept fluid, zealotry may thrive in the spaces created — the organizational equivalent of the intertidal zone, that highly productive region on a beach between high and low tide.

Not every organization can do this. The monolithic technology of integrated steel mills may constrain them to live out their lives as single organisms — great trees, magnificent to behold in their heyday, but doomed to die.

But it's not just technology that's the barrier to innovation: Processes and values matter too, and sheer size is also an inhibitor. When GM built the Saturn plant in Spring Hill, Tenn., and collected its kaizen zealots there, it was a brave attempt to create an open patch in which innovation might thrive and develop a production system that would be useful to the rest of the organization. Saturn was a qualified success (great car, happy customers, minimal profit), but GM has struggled to transfer the lean manufacturing process developed there to its other automotive divisions. Context may trump content when it comes to transferring process innovations.

Of course, a capitalist society shouldn't really care whether GM, as we know it, survives as an institution. It may well have served its purpose, and, if it fails or breaks up, its useful elements — knowledge, energy, and materials — will be taken up and used by the whole economy. Nature doesn't mind at which level renewal takes place. It's all part of Joseph Schumpeter's gale of creative destruction: Individuals die, but the system moves on, propelled by the energies generated by their life and released in their death. If as a society we can sustain the multiple contexts and catalysts for zealots to play their essential part in the process, renewal can take place at many levels.

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  1. Works mentioned in this review.Clayton M. Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Harvard Business School Press, 1997), 225 pages, $27.50.
  2. Peter F. Drucker, Adventures of a Bystander (John Wiley & Sons, 1998), 352 pages, $27.95.
  3. Howard E. Gardner, Frames of Mind: The Theory of Multiple Intelligences (Basic Books Inc., 1993), 440 pages, $18.
  4. Gary Hamel, Leading the Revolution (Harvard Business School Press, 2000), 336 pages, $29.95.
  5. Charles Handy, The New Alchemists: How Visionary People Make Something out of Nothing (Random House, London, 1999), 258 pages, £18.99.
  6. David K. Hurst, Crisis & Renewal: Meeting the Challenge of Organizational Change (Harvard Business School Press, 1995), 229 pages, $24.95.
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