Good companies are fallible to disruptive innovators: HBS Clayton Christensen

So well run companies need to watch out, and if possible be the disrupting force themselves. Thats the messages from noted Innovation Thinker and Harvard Business School professor Clayton M Christensen. While addressing the Fortune Global Forum in capital on October 30, Prof Christensen said, Good businesses are killed by disruptive technology and business models. Leaders have to watch out for disruptions, and perhaps be the disruptive force themselves.

Prof Christensen said that in most cases disruptive companies begin to work at the bottom end of the market and move upward. He gave the example of Toyota which entered the bottom end of the US car market and then moved up the value. In his presentation, he highlighted that given that bottom end of a market is not as attractive for the leader, they tend to ignore it - much to the advantage of disruptor.

In the car market, yesterdays company was Ford, said Prof Christensen. He added that Toyota is the company today. But the company of tomorrow is Cherry. In a similar way, Apple was yesterdays company, Microsoft is todays company and its Linux that is the company of future.

Highlighting the India opportunity, Prof Christensen said, For large global companies, using emerging markets like India as platform for disruptive innovation is a great idea. However, such companies should try to create new business and product models for non-consumption market. Non-consumption market is the bottom end of the market that is unable to use the current products because of the cost. Disruptive players create low-end products that fit the bill for these consumers.

Clayton M. Christensen is the Robert and Jane Cizik Professor of Business Administration at the Harvard Business School, with a joint appointment in the Technology & Operations Management and General Management faculty groups. He holds an MBA with High Distinction from the Harvard Business School in 1979, graduating as a George F. Baker Scholar. He was awarded his DBA from the Harvard Business School in 1992.

A seasoned entrepreneur, Christensen has founded three successful companies. From 1979 to 1984 he worked with the Boston Consulting Group (BCG). Professor Christensen became a faculty member at the Harvard Business School in 1992. He is author or co-author of five books: The Innovators Dilemma (1997), which received the Global Business Book Award for the best business book published in 1997; The Innovators Solution (2003), also a New York Times best seller; and Seeing Whats Next (2004).

The term disruptive technology was coined by Clayton M. Christensen and introduced in his 1995 article Disruptive Technologies: Catching the Wave, which he coauthored with Joseph Bower. He describes the term further in his 1997 book The Innovators Dilemma. In his sequel, The Innovators Solution, Christensen replaced disruptive technology with the term disruptive innovation because he recognized that few technologies are intrinsically disruptive or sustaining in character. It is the strategy or business model that the technology enables that creates the disruptive impact. The concept of disruptive technology continues a long tradition of the identification of radical technical change in the study of innovation by economists, and the development of tools for its management at a firm or policy level.