Innovation guru Clayton Christensen’s new theory is meant to protect you from disruption
If you’re sick of hearing about disruption, blame Clayton Christensen, who introduced the concept into business jargon.
Christensen is possibly the most influential management thinker in Silicon Valley. His 1997 book, The Innovator’s Dilemma, was embraced by Intel’s Andy Grove, quoted by Steve Jobs, and called one of the six best business books ever by The Economist. In it, Christensen introduced his theory of disruption, which explains how established, successful companies leave themselves vulnerable to competition from upstarts by abandoning the lower end of the market. Transistor radios, for example, were sold cheaply to teenagers and eventually overtook the expensive, high-quality vacuum-tube radios that once dominated the market. A more recent example might be AirBnb’s assault on the hotel industry.
Riding the success of his ideas, Christensen, a Harvard Business School professor, has published several more books exploring innovation, established a nonprofit think tank (the Clayton Christensen Institute), and launched consulting and investing firms. He’s also faced criticism, like this New Republic piece decrying how disruption has become an odious cliche.
In his latest book, Competing Against Luck: The Story of Innovation and Customer Choice, Christensen, with co-authors Taddy Hall, Karen Dillon, and David Duncan, tries to explain why some products are successful and so many are not. The difference is based on what he calls the “jobs to be done” theory.
Customers, he says, aren’t really interested in products or services themselves but in what they do. When people have a need, that’s a job to be done; products or services are simply “hired” to solve them. Innovative companies focus on developing products that do the jobs customers want, no matter what form they take. Netflix, for example, succeeds because the job to be done is entertainment, and it does the job by mailing DVDs and producing TV shows—two very different ways to be hired for the same job.
Quartz interviewed Christensen by phone about his new theory, how it fits into his theory of innovation, and why he regrets using the term “disruption.”
Quartz: Why did you call your book “Competing Against Luck?” It seems like the real competition is not luck but a company’s own flawed understanding of its product and its customers.
The reason we chose that was every time a company puts a new product into the market, they’ve done their market research as best they can and they believe it will be successful, but the data shows that, gosh, somewhere around 20% will be successful and 80% won’t and they thought the other 80% would be successful.
“I just had a sense that it’s not a crap shoot, that there’s more predictability to innovation than the data shows is possible.” Is it just intrinsic to innovation that you can’t predict in advance whether your product will be bought by the customer or not? I just had a sense that it’s not a crap shoot, that there’s more predictability to innovation than the data shows is possible. A key element of unpredictability is the customer is very unpredictable but the job is very stable over time, and that brings predictability to innovation. If you understand the jobs to be done, you’re actually competing against companies who still believe it’s just a crap shoot.
How does the jobs-to-be-done theory fit into your more established disruptive-innovation theory? They seem to nest together.
At its core, disruption is a theory about competitive response. If I have a new innovation I want to introduce into the marketplace, I want to predict if competitors in that market are going to ignore me or going to fight me. The theory of disruption helps you understand that quite well. But in many ways, it’s not a manual for how to grow or how to predict what customers want. [Jobs to be done] is the second side of the same coin: How can I be sure that competitors won’t kill me and how can I be sure customers will want to buy the product? So it’s actually a very important compliment to disruption.
If you organize your company around a job to be done, it’s actually a lot harder for a new entrant to disrupt you, because most disruptive companies just have my product versus your product, and mine’s cheaper than yours. Jobs to be done is actually good protection for companies worried about being disrupted.
Your book mentions an example of product that no one really needed and therefore wasn’t successful—Segway, which no one hired to do a job. I wonder if there’s an inverse: how do you account for things that no one thinks they need but turn out of be very useful or desirable. Facebook strikes me as product that no one thought they needed, but is now indispensable to many of us. Does the theory allow for the truly innovative, outside-of-the-box ideas that no one thought they needed?
“Jobs to be done is actually good protection for companies worried about being disrupted.” The vast majority of products organized around a job to be done were discovered by chance, by customers who realized they had a job to do, and realized there’s something they had to do the job—and they talked about it, and other people said, “Oh gosh, I have that same job to do and I didn’t realize I needed this product to do that job until I happened upon it.”
We discover jobs to be done, we don’t develop them or consciously iterate toward them. In the book, we’re tying to say, now that you understand the idea, there’s a methodology that will help you identify these jobs. You’ve got to keep your ear to the ground, because you’ll happen upon the job.
How about really hard-to-define traits, like taste and style? Can a clothing designer at the high end apply jobs-to-be-done theory to color, for example? Or are there some things that are beyond the reach of the theory?
I think you’re right. I cannot apply the concept of disruption to choices of preference. It doesn’t have anything to say about preference. Thank goodness.
Have you been surprised by the reaction to your disruption theory, by how it has taken hold, and by the backlash?
There are criticisms that are very important. Never does a theory just pop out in complete form. But rather, the first appearance of the theory is half baked. Then it improves when people say, it doesn’t account for this, or this is an anomaly and it doesn’t explain that. It’s very important to have people willing to criticize it for that purpose.
What we didn’t anticipate, and what in many ways was a fault of mine, was that the term disruption has so many different connotations in the English language, that it allows people to justify whatever they want to do as, “Oh, this is disruptive,” and they don’t ever read the book. The population of people where the fewest have read the book are venture capitalists. They are arrogant and smart and why do they need to read something?
[Princeton psychologist] Daniel Kahneman has this book Thinking Fast and Slow, and in the language he uses, there is type 1 activity and type 2 activity. What a brilliant idea, because it forces you to go back to see what is type 1 or what is type 2. Instead of calling it disruptive and sustaining innovation, if I had called it type 1 innovation and type 2 innovation, it would have forced all of these people who have misused the term to read another paragraph.
But as someone who knows a lot about branding, you might want to be associated with this powerful brand of disruption.
I have never wanted to be famous.