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Interesting criticism of the Innovator's Dilemma


Liberty
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http://www.newyorker.com/reporting/2014/06/23/140623fa_fact_lepore?currentPage=all

 

This criticism reminds me a bit of the Halo Effect (excellent book). The piece is long, but it gets really interesting in the middle when he looks at the case studies on which the theory is based. Not saying it means it's 100% flawed (it isn't), but like most theories about business, I think it's wise to take it with a lot of salt and not give it more predictive power than it actually has.

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http://www.newyorker.com/reporting/2014/06/23/140623fa_fact_lepore?currentPage=all

 

This criticism reminds me a bit of the Halo Effect (excellent book). The piece is long, but it gets really interesting in the middle when he looks at the case studies on which the theory is based. Not saying it means it's 100% flawed (it isn't), but like most theories about business, I think it's wise to take it with a lot of salt and not give it more predictive power than it actually has.

 

Unfortunately, sometimes we also adhere to criticisms of a theory primarily because they fit with our own beliefs (e.g., my particular company or investment is not subject to forces described by X theory).  Even when the criticisms are very poorly constructed.

 

As I told another investor, much of the animus in Lepore's piece is directed towards those who throw around the word "disruption" as a buzzword that fits their particular narrative.  Christensen, himself, in his response to Lepore notes that he was happy at first to see her criticize the "almost random" overuse of the term "disruption."

 

But then Lepore veers off into criticism that is very shallowly put together and that, frankly, indicates that Lepore hasn't read any of Christensen's subsequent academic work (including the Innovator's Solution), which modifies, expands, and negates some of his earlier work.  It's a surprisingly poor piece for an academic to put forth.  Any decent academic understands that ostensibly predictive theories evolve over time, although perhaps historians have a different way of doing things because they focus on what happened in the past and try to come up with their definitive thesis or narrative of what actually happened.

 

Lepore equates "innovation" with the idea of "progress stripped of the aspirations of the Enlightenment," but  even if that is true, it has very little to do with the specific business mechanisms posited in Christensen's academic work.  Then she equates disruptive technologies with business success by particular companies, which simply doesn't follow from the entirety of Christensen's work.  It's really more of an industry-wide examination, though it is true that Christensen often touts particular companies as successful innovators.  Lepore also criticizes Christensen for declaring that his theory is meant to be "predictive" in nature but goes way overboard in trying to tear it down with the particular case studies he uses.  In fact, Christensen's posited "solutions" to disruptive innovation (again, developed in his subsequent work) contemplate that there will be failure by companies who are trying to win the market through their innovations.

 

Having said the above, there are a number of valid criticisms of the Innovator's Dilemma that ought to be put forth (but which Lepore does not).  For one thing, Christensen doesn't seem to understand valuation -- he essentially focuses on growth as the driver of increased value over time (buying into EMH in many respects).  Another one is that Christensen doesn't realize that the creation of wealth and having one's business subject to "disruptive innovation" is not mutually exclusive.  That is, a company can have their incumbent business severely affected by a disruptive innovation, but still generate far more value from the incumbent biz than if they try to "cannibalize" that incumbent biz.  These are just two of the criticisms that one can levy against Christensen.

 

Basically, there are always issues if one adheres to a particular theory or mental model as an iron law, particularly if you don't really understand it properly.  Indeed, that is the whole point of the "man with a hammer" aphorism.  But to agree with a poorly done criticism of a mental model because of "confirmation bias" is also wrong-headed.

 

Here are a number of response pieces worth reading:

 

http://www.businessweek.com/articles/2014-06-20/clayton-christensen-responds-to-new-yorker-takedown-of-disruptive-innovation#p1

http://www.slate.com/articles/technology/technology/2014/06/clayton_christensen_and_disruptive_innovation_is_the_concept_a_myth.single.html

http://www.vox.com/2014/6/17/5817824/disruption-is-a-dumb-buzzword-its-also-an-important-concept

http://www.digitopoly.org/2014/06/16/the-easy-target-that-is-the-theory-of-disruptive-innovation/

 

Even the Stratechery guy, who is a favorite of investors in a particular tech company discussed on CoBF, recognizes the faults in Lepore's article:

 

http://stratechery.com/2014/critiquing-disruption-theory/

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