Managing Disruption: An Interview with Clayton Christensen

Abstract

Clayton Christensen talks with James Euchner about how companies can anticipate disruption and challenges of managing change. Clay Christensen is best known for formulating the innovator's dilemma: observation that same behaviors that sustain a company-listening to customers and investing in innovations to meet those customers' needs-can ultimately lead to failure. Focusing too heavily on current customers' needs can blind company to a one that starts in new markets and changes way customers perceive current product. Since he articulated problem in The Innovator's Dilemma and described how well-managed companies fail precisely because they do what rational analysis would dictate, Christensen has worked with many companies confronting change. We spoke with him about how companies can anticipate forces, tactics they can use for moving before customers do, and organizational challenges associated with confronting disruption. James Euchner [JE]: Thank you, Clay, for spending time with me this morning. Clayton Christensen [CC]: Oh, I'm delighted. Thank you. JE: As those responsible for innovation in our organizations, we're very interested in how people get close to their customers, understand what their customers' needs are, and then innovate into them. You've studied this in great depth, and you caution people that you can get too close to your customers or listen too much to your customers. Can you comment on that? CC: Sure. If you look across sweep of business history, big new waves of growth have been started by companies that actually develop what I call disruptive innovation, and a innovation is an innovation that makes it so much simpler and so much more affordable to own and use a product that a whole new population of people can now have one-people who, historically, didn't have money or skill to be in market. Some examples of these sorts of innovations are personal computer, router, Toyota's automobiles, Kodak's original camera, Xerox's original photocopier, Canon's desktop photocopier. All of these innovations made something so much simpler and more affordable that a new population of customers got pulled into market. In every one of those cases, though, performance of products wasn't anywhere near as good as performance of established products that were being sold to players in market. For example, when Canon disrupted Xerox, their most important customers operated high-speed photocopy centers, and they needed even faster, ever more fully featured machines. These little tabletop copiers [from Canon] could do three or four copies a minute. They couldn't collate; they couldn't enlarge or reduce or do grayscale replication. But they made it so much simpler to make photocopies that many people actually had two copiers for a while. For simple things, we had a little Canon around corner from our office, and for high-volume jobs, we still took work to corporate photocopy center. When Xerox listened to its [photocopy center] customers, it got no signal from them that this little tabletop thing was important. But then Canon, little by little, made it better and faster and more capable and more convenient to use until, ultimately, an entirely new market was created. Now it seems that to be within 15 seconds of a high-speed photocopy machine is almost a constitutional right, you know? And Xerox missed most of that growth. Oddly, it's because they listened to their customers rather than doing a deeper analysis of, Well, what is job that customer is really trying to get done? JE: In that case, it was actually same customer-the large enterprise customer-that used both products. How could Xerox have picked up weak signal as it was coming out? …

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