Chances are, unless you are an MBA, you’ve never read anything by business guru Clayton Christensen, the author of a series of self-help business books beginning with The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, in 1997. Now, however, an interesting brouhaha has erupted surrounding Harvard historian Jill Lepore’s systematic evisceration of the arguments of Christensen last week in The New Yorker.
Lepore describes the Harvard Business School professor’s “disruption theory” as the product of a particular mood and moment in time – “the manufacture of an upsetting and edgy uncertainty,” as she puts it, a “competitive strategy for an age seized by terror.” In the end, she says, it turns out to be an unreliable guide to action. “Transfixed by change, it’s blind to continuity. It makes a very poor prophet.”
Christensen immediately responded in an interview he gave to Bloomberg Businessweek. “I hope you can understand why I am mad that a woman of her stature could perform such a criminal act of dishonesty—at Harvard, of all places.” The American Enterprise Institute, Paul Krugman and Salon's Andrew Leonard oeach chimed in. Harvard computer science Prof. Harry Lewis, himself something of an expert on disruptive change, added a couple of illuminating posts, "The Bogosity of Disruption Theory'' and "Clayton Christensen is Mad''. Meanwhile, Harvard Magazine dubs Christensen a "Disruptive Genius" in a lengthy story in its summer issue.
To understand the contretemps, it helps to begin with a profile by staff writer Larissa MacFarquhar that appeared in The New Yorker two years ago. To describe ''When Giants Fail: What business has learned from Clayton Christensen'' as credulous is an understatement; it is, in fact, a modern-day hagiography. It begins this way:
'“You can tell from the way I speak. I had a stroke about eighteen months ago. I’ve been learning how to speak English again, and you’ll see I still can’t come up with the right words sometimes.” The most influential business thinker on earth looked up and smiled apologetically. He stood with his hands in his pockets. His hair was neatly parted on the side. He was very tall. “I have a tendency to speak to the floor,” he said. “It’s because if I look at you, you distract me.”'
I would like to have been in the room when the magazine fact-checker asked for the source on the “the most influential business thinker on earth.” Later in the article, it turns out to depend mainly on a magazine cover story at the height of the dot.com boom:
"Andy Grove [CEO of Intel] stood up at the Comdex trade show in Las Vegas, holding a copy of The Innovator’s Dilemma, and told the audience it was the most important book he’s read in ten years. The most important book Andy Grove had read in ten years! A man from Forbes was in the audience that day, and in 1999, Grove and Christensen appeared together on the cover of Forbes, and things were never the same for Clayton Christensen again.''
Thereafter, Michael Bloomberg sent copies of the book to 50 friends. Bill Gates invited the professor to his home. Christensen partnered (for a time) with technology writer George Gilder.
To that point, MacFarquhar’s article had been a chronicle of the early studies of computer disc drives and steel mini-mills (no mention of unions or foreign competition) that sparked Christensen to write The Innovator’s Dilemma, plus an account of his growing up Mormon on the wrong side of the Salt Lake City tracks. Well-managed businesses frequently remained too close to their customers’ needs to recognize, much less develop, new technologies that anticipate future needs, he had discovered; it was at the less profitable low end of the market where disruptive innovations most frequently emerged. Like his innovators, Christensen was “a low end kind of a guy,” MacFarquhar wrote, a diamond in the rough who nevertheless attended Oxford University as a Rhodes Scholar.
A key moment in MacFarquhar’s exposition came when Christensen is hired to find a way to grow the market for milkshakes at one of the big fast-food chains. Survey data were extensive, but no improvement the company made seemed to increase the market. The consultant took a different approach, asking himself “what job is a customer trying to do when he hires a milkshake?” Extensive observation and interviewing followed; it turned out that most purchasers wanted a breakfast drink, one that wouldn’t spill and that would last longer on the drive to the office. Thus more viscous, not less, was the answer, along with tiny chunks of fruit to surprise and briefly stop up the straw. The implication is that the market for milkshakes began growing again, though how much, MacFarquhar didn’t say.
Christensen concluded that the only way a big company could avoid being disrupted would be to start a “skunk works” – a small spinoff unit located far away from headquarters, staffed by out-of-the-box thinkers who are charged with entering new businesses inimical to the interests of the company’s main business. This is not exactly a new idea, but Christenson applied it with greater abandon than ever before. He told Then-Defense Secretary William Cohen his parable about mini-mills and sheet steel, whereupon the Defense Department sets up a counter-terrorism unit in Norfolk, Va., Later, Christensen himself became Harvard University’s skunk works, taping a lecture for the University of Phoenix to demonstrate the potential of massive open online courses. Harvard promptly entered into a joint venture with the Massachusetts Institute of Technology to pursue the possibilities.
So much for Christensen, New Yorker release 1.0. MacFarquhar is an accomplished writer, but in dealing with business history, she was operating outside of her comfort zone. Her Christensen article was one of a series of profiles of “moral saints,” part of a book about extreme morality that began with a 2009 New Yorker article about a series of persons who donated kidneys to others whom they did not know.
Harvard’s Lepore on the other hand, approaches her topic as a professional historian. She is the author of several well-received books, beginning Name of War: King Philip's War and the Origins of American Identity (Knopf, 1998). She is at pains to establish the sources of her background knowledge as well. For a short time at the end of the 1980s, as an assistant to an assistant, she answered phones for Harvard Business School’s Michael Porter, the business guru whom Christensen has gradually displaced. (Before Porter there was Peter Drucker, and before Drucker there was Bruce Henderson, of the Boston Consulting Group.)
Lepore does a good job of marshalling evidence against Christensen’s more sweeping claims as an industry analyst. His sources, she writes, are “often dubious and his logic questionable;” his theories lack predictive power. His stylized graphics may provide the underpinning of the analysis of The New York Times “Innovation Report.” but most of its would-be disrupters have yet to turn a profit. And his 2011 book, The Innovative University: Changing the DNA of Higher Education from the Inside Out, with Henry Eyring, contributed to a frenzy for MOOCs, which hasn’t begun to live up to expectations.
Hooray for The New Yorker for permitting one staff writer dispute another, even obliquely (MacFarquhar is married to fellow staffer Philip Gourevitch). Hooray, too, for Harvard University, for merely wincing as one professor attacks another, and, from the citadel of the faculty of arts and sciences, mocks the methods of the business school. Disruption vs. continuity? Lepore has broached an important topic. You haven’t heard the last of it.
David Warsh, a long-time financial journalist, is proprietor of economicprincipals.com and an economic historian.