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The Essential Clayton Christensen Articles

by The Editors

Editor’s note: Clayton Christensen died on Jan. 23, 2020. Here we present some of his seminal HBR pieces through an adaptation of the introduction to the book The Clayton M. Christensen Reader.

Clayton M. Christensen is best known for his theory of disruptive innovation, in which he warns large, established companies of the danger of becoming too good at what they do best. To grow profit margins and revenue, he observes, such companies tend to develop products to satisfy the demands of their most sophisticated customers. As successful as this strategy may be, it means that those companies also tend to ignore opportunities to meet the needs of less sophisticated customers — who may eventually form much larger markets. An upstart can therefore introduce a simpler product that is cheaper and thus becomes more widely adopted (a “disruptive innovation”). Through incremental innovation, that product is refined and moves upmarket, completing the disruption of the original company.

Christensen’s work on disruption is nuanced and often misunderstood. Not every hugely innovative technology is “disruptive” (though you wouldn’t know that from the way journalists and tech enthusiasts throw the word around). Not every start-up will beat the incumbent. Not every big company is going to be disrupted. Reading Christensen’s original Harvard Business Review articles on disruption yields a more accurate picture of his theory and how businesses can prepare for and overcome the threat he describes.

Much of that picture comes from the case studies embedded in each article. Christensen was a deliberate storyteller, and his business examples serve as parables; compelling and memorable, they give readers the context to apply his ideas to their own industries. Those who know Christensen’s work are familiar with the success of steel minimills (disrupters!) and the fate of Digital Equipment Corporation (disrupted!); they know what goes into the creation of the best milk shake (a product with a job to do) and why the iPod was the MP3 player that really took off (an innovative business model). In “How Will You Measure Your Life?” Christensen reflects on his use of storytelling to persuade one powerful CEO to change strategy and go to the bottom of the market. “If I’d been suckered into telling Andy Grove what he should think about the microprocessor business, I’d have been killed. But instead of telling him what to think, I [told him the story of the minimills and] taught him how to think.” Christensen’s articles do the same for readers.

Here we’ve collected the most essential and influential of Christensen’s HBR articles. In them, Christensen examines many different pieces of the disruption puzzle. Understanding those pieces is critical for strategy teams, product development units, and organizational leaders. They include:

The threat of disruptive innovation: the core theory of why bad things happen to good companies. “Disruptive Technologies: Catching the Wave” is the big-picture “why is this a problem” article warning established companies that a seemingly rational concern with profit margins can have disastrous results. It outlines several classic examples — primarily disk drives, along with Apple and Digital Equipment Corporation — to show that there is a pattern big companies should pay attention to.

Organizational structure:Meeting the Challenge of Disruptive Change” describes how leaders can structure their organizations to allow the kinds of innovation that stave off disruption. Here Christensen runs Digital Equipment Corporation through his framework to show how it can be used to explain that company’s infamous reversal of fortune.

Product innovation:Marketing Malpractice: The Cause and the Cure” again asks why good managers struggle to innovate successfully, this time focusing on the discipline of product innovation itself, rather than on organizational and management structures. By understanding the tasks that customers look to a product for (the “job to be done”), a company can develop offerings — products, services, and whole brands — that customers truly value. Christensen uses the “milk shake” example to show how product developers should be considering their task.

The financial tools in the way: Established financial incentives often make it unattractive for companies to innovate. In “Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things,” Christensen and his coauthors target metrics such as discounted cash flow, net present value, and earnings per share, along with attitudes towards fixed and sunk costs. They suggest that leaders take up other methods for evaluating investments — ones that consider future value.

Business model innovation: Product innovations might be necessary, but to be truly disruptive, they often need to be delivered to the market through new business models. In “Reinventing Your Business Model,” Christensen and his coauthors describe how to determine if your company needs a new business model and what makes one successful, using examples ranging from Apple’s iTunes to CVS’s MinuteClinics.

The role of business models in M&A: To reinvent their business models, companies sometimes decide to merge with or acquire another firm. But the failure rate of M&A is somewhere between 70% and 90%. “The New M&A Playbook” explains that the failures often stem from a lack of clarity about why a merger or acquisition is being pursued. Companies need to consider whether they are really after business model reinvention or are simply looking to bolster their current model. These purposes demand very different implementations of a deal — from paying the right price to determining how employees and other resources will be handled.

Where your industry’s future growth lies: If disruption is predictable, we should be able to step back and look at markets as a whole to understand how disruption will change an industry over time. “Skate to Where the Money Will Be” describes a pattern of evolution of markets and industries that can help managers see where their next source of profits will be — so that they don’t find themselves outpaced by another company in that new sphere.

The extendable core: How do you know how big a particular threat to your business actually is? “Surviving Disruption” helps you calculate the strengths of your own potential disrupter’s business model along with your own relative advantages and determine what conditions could keep your disrupter from triumphing. Christensen and his coauthor build on the jobs-to-be-done theory and introduce the “extendable core” — the part of a disrupter’s business model that enables it to keep undercutting you as it creeps upmarket into your territory.

Disruptive innovation, revisited: The ideas summed up in the phase “disruptive innovation” have become a powerful part of business thinking in the 20 years since they were introduced — but they’re in danger of losing their usefulness, because they’ve been misunderstood and misapplied. In “What is Disruptive Innovation?” Christensen and his coauthors revisit the essential concepts, show the importance of using the term precisely, and share what they have learned from two decades’ application of the idea in the field.

What makes good management theory: By testing a business theory with the scientific method — by conducting a reality check — we can learn whether the theory will really help us predict the future. “Why Hard-Nosed Executives Should Care About Management Theory,” argues for a more rigorous testing of theories so that managers can gain a better sense of whether an idea is relevant to their specific situation.

A personal strategy: Christensen extends his examination to the personal realm, arguing that bad things sometimes happen to good people because those people lack a strategy for their lives. In “How Will You Measure Your Life?” he uses concepts from business to challenge readers to manage their careers and personal lives in a way that leads to lasting satisfaction.

To Christensen, the role of every general manager is to lay a foundation for future growth. To that end, managers need to understand disruptive innovation, the threat it poses, and how to lead their teams and organizations to create growth that can keep pace with ever-evolving technologies, industries, and customers.

This article is adapted from The Clayton M. Christensen Reader (Harvard Business Review Press, 2016)

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8 Lessons Product Managers Need to Learn From Clayton Christensen

Clayton Christensen is one of the greatest business minds of our time. His recent passing caused me to reflect on all I learned from him. His life was dedicated to his family, his faith, and the theories he taught. He personified servant leadership.

Almost every single topic he taught is relevant to the work of product management. Here I share 8 key lessons I’ve learned from his work that have helped me be a better product manager, leader, entrepreneur, husband and father.

  1. The Theory of Disruptive Innovation
  2. Jobs to be Done
  3. Don’t Outsource Core Capabilities
  4. The Pitfalls of Best Practices
  5. How You Measure Success Matters
  6. Relationships Matter
  7. The Importance of Strategy
  8. Success Beyond Work

1. The theory of disruptive innovation

Clay’s seminal work deals with this question:

Why do big companies with lots of resources miss out on innovative solutions?

Disruptive innovation is the theory that explains the answer. I encourage every PM to read the book

    and read some of his best articles. Here are 3 I recommend:

    • Disruptive Technologies: Catching the Wave — the original
    • What is Disruptive Innovation — this one is a good clarifier
    • Surviving Disruption — about long-term disruption

    The theory of disruptive innovation is nuanced and often misapplied. His theory doesn’t describe all “innovation”.

    The key lesson from disruptive innovation is that what ends up being disruptive technology starts by looking inferior. They are cheaper solutions that usually appeal to another segment of the market. The technology that makes them disruptive is unappealing to the current leaders at first.

    Blockbuster vs Netflix. Hotels vs Airbnb. Taxis vs Uber.

    The new solutions seemed a lot worse at first, but the technology and improvement over time made them much more successful over time.

    So what do you need to do?

    “Managers must beware of ignoring new technologies that don’t initially meet the needs of their mainstream customers.”

    Question who your customer is and realize that unmet needs in new segments can represent massive opportunities.

    At its core, the concept that future growth and potential are worth more than current status. It’s an incredibly powerful idea about how the world works. Used well this theory governs not just the rise and fall of companies, but also how we need to think about potential in all domains.

    “It’s important to remember that disruption is a positive force. Disruptive innovations are not breakthrough technologies that make good products better; rather they are innovations that make products and services more accessible and affordable, thereby making them available to a much larger population.”
    source

    Existing businesses you need to invest in more than ideas that have obvious, immediate returns. Disrupt yourself by developing low-cost ways to serve customers that seem to cannibalize your existing market.


    2. Jobs to be done.

    The Jobs to be Done concept is similar to user stories or job stories, but with some important distinctions. It’s more effective to answer the question “What job are you hiring this product to do?” compared to the plug and chug user stories or job stories alone encourage.

    The example of the milkshakes is one of my favorite examples to share. It’s common for non-product people to think that gathering user insight can be done by running a survey and adjusting the product according to the overall results. But in-person observation and interviewing find distinct use-cases that could then be optimized to serve those customers.

    Many organizations have unwittingly designed innovation processes that produce inconsistent and disappointing outcomes. But firms don’t have to continue down that path. Innovation can be far more predictable—and far more profitable—if you start by identifying jobs that customers are struggling to get done. Without that lens, you’re doomed to hit-or-miss innovation. source

    One of the first rules of product management is to be obsessed with your customers (thank you Hiten Shah). In a world that supports in-person relationships less and less, Clay was an advocate for getting out of the room and being with the people.

    Key questions you can ask to apply the theory to your product include:

    • Who is hiring this product?
    • What are they hiring this product to do?

    This simple reframe and examples from Clay help product managers as they seek to become not just a delivery team or a feature team, but a real product team solving real problems for users.


    3. Don’t outsource core capabilities

    This principle is applicable to product managers from a talent standpoint, both for your own company’s abilities as well as your own personal skills.

    It’s the classic tale of middle managers who no longer know how to do anything real. It’s easy to build a habit of always passing the grunt work along. While delegation is critical to leadership and potentially the biggest blocker to company growth, so outsourcing everything is a path towards skills irrelevance.

    One of the surest ways to rise in a company is to find something that no one else understands and do it better than anyone else. This is how Jeff Weiner got his rise through the ranks of Warner Brothers. It’s also how Mark Cuban put himself in a prime position to build a company and trade tech stocks to make his billions.

    Doing the hard work no one else wants to do is a path to success. Clay found over and over again companies that failed to do so, outsourcing the “boring” or “mundane” work which eventually led them into irrelevance.


    4. Following best practices doesn’t always work

    Just because something looks like it should work doesn’t mean you understand the underlying principles and mechanisms.

    Consider how our ancestors thought about approaching flight. They believed that feathers and flapping wings were the answer to how we would fly. The solutions that ended up actually working (based on the principles of flight vs just the outer look of birds) are very different than they expected.

    “[Using] robust theory to predict what will happen has a much greater chance of success.”

    For product managers, this is a clear invitation to avoid relying only on what the competition does or what customers say as fuel for your product concepts. Understanding the theory underneath problems (the why) is powerful.

    “That’s a hallmark of good theory: it dispenses its advice in “if-then” statements.”


    5. How you measure success matters (resource allocation)

    You get what you reward for.

    SonoSite had developed a new portable ultrasound machine. The CEO tagged along with a sales meeting. The sales rep wouldn’t pull the machine out of his bag and was laser-focused on selling the current, larger solution. The CEO later realized that the rep’s incentive plan wasn’t aligned with an important future shift for the company.

    Another example of this is the story of an archaeological discovery in the 1940’s:

    … a team led by Ralph von Koenigswald had found another group of early humans which became known as the Solo People, from the site of their discovery on the Solo River at Ngandong. Koenigswald’s discoveries might have been more impressive still but for a tactical error that was realized too late. He had offered locals 10 cents for every piece of hominid bone they could come up with, then discovered to his horror that they had been enthusiastically smashing large pieces into small ones to maximize their income.

    Unintended consequences happen with rewards. What you reward (both consciously and unconsciously) has incredible influence on the work.

    “The only way a strategy can get implemented is if we dedicate resources to it.”


    6. Relationships matter, especially on product teams

    This is especially critical for product managers because of a trend to be arrogant. Product managers need to be very intelligent. It’s one of the hardest and most critical roles in a company. It requires an incredibly broad skill set to manage a product. A PM helps the team figure out the right problems to solve and decide which bets to place.

    But PM is a role that can’t be done on an island. Without a team willing to follow, nothing happens. Investing in relationships is key.

    PMs can be attracted to the field because they believe the old myth that the PM is the CEO of the product. I have actually heard aspiring PMs say they are pursuing the role because “I want to be able to make all the decisions” or “I want to call the shots”. If you think you’re in charge, you have a long road ahead of you. Even at companies where the PM role is well respected and giving generous authority, you will find much more success by inspiring and working together with those around you vs telling everyone the “right answer”.

    The impact to both the work and the team is powerful when we take Clay’s advice:

    “If you want to help other people, be a manager. If done well, management is among the most noble of professions.”

    Help others. Don’t just try to look like the smartest person around.


    7. The importance of figuring out and communicating the strategy

    Getting aligned and staying aligned as a team is difficult. Too many product teams waste time and money because they lose sight of why they are building something and fall into the trap of becoming a feature factory.

    Activity ≠ Progress

    Figuring out which bets are worth making, which experiments should be run, and how to optimize for fast learning isn’t always straight forward.

    Clay warns:

    “93 percent of all companies that ultimately become successful had to abandon their original strategy”

    “[Successful] senior executives need to spend a lot of time articulating clear, consistent priorities that are broadly understood throughout the organization.”


    8. Don’t let personal work success become the driving force in your life.

    I’ll let Clay’s words speak for themselves:

    “Work can bring you a sense of fulfillment—but it pales in comparison to the enduring happiness you can find in the intimate relationships that you cultivate with your family and close friends.”

    “Don’t worry about the level of individual prominence you have achieved; worry about the individuals you have helped become better people.”

    “I have a pretty clear idea of how my ideas have generated enormous revenue for companies that have used my research; I know I’ve had a substantial impact. But as I’ve confronted this disease, it’s been interesting to see how unimportant that impact is to me now. I’ve concluded that the metric by which God will assess my life isn’t dollars but the individual people whose lives I’ve touched.”


    If you haven’t taken time to carefully study his theories, I encourage you to do so. I’ve included links throughout this article as a reference point for those wanting to read his thinking for the first time and for those wanting to review them again.

    If I could summarize the lesson Clayton Christensen has for every product manager, it is this:

    The way you architect your work and your life make a meaningful long-term difference, for success or failure. Success isn’t always gained by pursuing what is immediately obvious.

    Thank you, Clayton.

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