New Yorker chat on HWYMYL and Clay
Following on from the earlier profile piece, Larissa MacFarquhar of the New Yorker hosted a live chat on Clay Christensen and How Will You Measure Your Life, that just ran in their magazine. The chat took place here on Wednesday May 9th at 3pm ET.
A full transcript follows:
Larissa MacFarquhar on Clayton Christensen
The New Yorker:
Larissa MacFarquhar will be joining us in just a few minutes. For now, please submit your questions.
Hello All, I’m here for the next hour to answer questions about my article on Clayton Christensen. Please feel free to send questions.
Comment From Mike Cena
Hi. Have you had a chance to read the new book that is referenced in the article? What did you think of it?
Hi Mike, I did read Christensen’s new book, and I thought it was terrific. There’s much more in it than I was able to write about, so if you are intrigued I do recommend it.
Comment From Edward
In Christensen’s book on health care, he advocates moving towards individual savings accounts and high-deductible plans, thus farther from nationalized medicine. He presents much theoretical justification for this, but outcomes in European countries are as good or better than American outcomes for a fraction of the cost. Do Christensen’s theories get criticized for being theoretical and anecdotal rather than empirical?
Edward, thanks for your question. Most criticisms of Christensen’s work focus on its applicability for managers. It’s all very well to say, in hindsight, that a company ought to have brought out a product that has already proved to be successful, but much harder to say what product will succeed in the future. Christensen points out that it is often an initially inferior product that drives a superior one from the market, but aiming at inferiority isn’t a viable strategy.
Comment From Bob
Are all industries susceptible to disruptive technologies? I work in the manufacturing of large airplanes in the Pacific Northwest, and I wonder if my company is in danger of an upstart companies building smaller & less expensive jets that “eat our lunch.” I would like to think that our business is too complicated and regulated to be in immediate danger, but I would like to get other opinions.
Bob, Christensen has written about the airline industry, and he has a lot to say about it. Briefly, yes, he does suggest that smaller airlines working shorter, local routes with smaller, cheaper planes are poised to disrupt larger companies.
Comment From Rich
Could a company like Google, that does so many different things, avoid the disruption pattern?
Rich, I don’t think Christensen would say that any company is immune to disruption, but it’s true that disruption is a process that works, at least initially, on products rather than whole companies, so the more diversified a company is, the less likely it is that the failure of any single product will bring it down.
Comment From Kal
Which businesses today do you think are most primed for disruption?
I wouldn’t presume to predict specific failures, but I believe that Christensen would say there are certain indicators to watch out for. A company that has abandoned its high-volume, low-margin products in order to focus on manufacturing higher-margin, more expensive products is poised to be disrupted by start-ups for whom the lower margins are attractive in a way that they no longer are to the big company. Focusing on products rather than companies, Christensen’s attention tends to be drawn to products that seem too expensive and too fancy for most consumers–that are only of interest to customers at the very top of the market. Then again, it was this focus that led him to predict that the iPhone would not succeed: he saw it as an overly-fancy phone, not, as he came to see it later, as a disrupter of the laptop.
Comment From Troy Torrison
I don’t think there is a book I’ve read about business that had a greater impact on my thinking than ‘The Innovator’s Dillema’. That said, as an investor (small time stock picks, 401k, IRA) I find it very difficult to apply his ideas. The example he cites of his failure to predict the iPhone success is emblematic of my trouble. Imagine selling your Apple stock and buying Nokia around the time the first iPhone came out. How do outsiders like us find the disruptors of the future if THE GURU gets it so wrong?
Troy, you’re right, it is very difficult to predict what products will succeed, and this has been the main complaint with Christensen’s theories. But think about the iPhone prediction: Christensen now says he got it wrong because he saw the iPhone as a fancy phone rather than a kind of cheap, ultra-portable laptop. He might have avoided that by applying his own jobs-to-be-done theory and realizing that a consumer might use a product to solve a problem that its manufacturer hadn’t even thought of. Then again, it’s just as hard to know exactly how consumers will use a product as to know how much they will like it, so I’m not sure that gets you very far.
Comment From Umair
What impressed you most about how Clay manages his time across all of his professional and personal commitments?
Umair, what I found most extraordinary about Christensen’s time-management is the way that he values and uses every single minute. On his way to the hospital having suffered a major heart attack that could easily have killed him, he grabbed his briefcase, just in case he had some down time. He has always been like this, even when he was a young man. His mentor while he was on his mission in Korea, Elder Brown, told me that at the end of his two-year stint, Christensen told him that he hadn’t wasted five minutes in two years.
Comment From KL
The smaller airlines working shorter, local routes requires access to the airports which are already overly congested (think O’Hara, for example). I would think that the better model would be high-speed rail, connecting Chicago to places like Milwaukee, and connecting right to O’Hara. This would free up airports like O’Hara for long-haul flights. Another example would be Heathrow, of course, which is the world’s most congested airport.
Comment From Troy Torrison
I wonder if he’s seen The Book of Mormon. Talk about disrupting orthodox opinion.
I didn’t ask him whether he’d seen it–I doubt he has, just because he’s so busy. But he has a great sense of humor, so I doubt he would be bothered by its satire.
Comment From Bob
There are those who do not buy into the disruptive technology thesis. For instance: http://www.pcmag.com/article2/0,2817,1628049,00.asp.
Bob, there are indeed critics of Christensen’s theories, though fewer than you’d think, considering how enormously influential he is. A few years ago–in 2006, I believe–the Journal of Product Innovation Management ran an entire issue on his theories, including both suggestions and criticisms, so if you’re interested, that’s a good place to start.
Comment From mitch
i’ve known quite a few mormons and they seem to spend time amongst one another to the exclusion of folks of other beliefs. was that the impression you got meeting with christensen?
Not at all. On the one hand, Christensen’s faith is extremely important to him, and so is the Mormon community, so that is a large part of his life. He lives in Belmont, a suburb of Boston, in which there is a small Mormon community (including Mitt Romney) and a Mormon temple. But he loves discussions, he loves talking about his faith, and he is a missionary at heart, so I think he really likes living in a part of the country where he is surrounded by people whose views are different from his own. If he lived in Salt Lake City, there would be far fewer opportunities to explain Mormonism to people who would otherwise harbor prejudices about the church, or know nothing about it at all.
Comment From Phil
Part of the theory of disruptive technology is that managers stress ratios over profits, and so are willing to jettison low profit-margin parts of their businesses. Why didn’t Christensen stress changing that mindset, instead of the downstream strategy of fostering disruptive technology that issues from it?
Phil, he does focus on both, and he considers them, I believe, equally important. I spent much more time in my article writing about disruption only because it takes longer to explain. But Christensen does believe that the Church of New Finance is crucial to the disruptive process, and at the root of the wrong-thinking managerial practices that put it into play.
More generally, he points out that you should always think carefully about the way you measure success, because that will determine your strategy and your results. His new book is titled “How Will You Measure Your Life?”, because he believes that one of the reasons well-intentioned people make a mess of their lives is that they are measuring the wrong things, watching the wrong indices–they notice the obvious professional indicators like whether their salary is increasing year by year, and fail to notice the subtler but more important family indicators such as whether their kids join in the conversation at dinner.
Comment From Rory
Why would anyone want to put up with a disruptive business that provides something like lower-quality education?
Well, Christensen would ask you, lower-quality compared to what? If your choice is taking on-line courses at home, writing papers that are corrected by robots, and never interacting with a human being, versus going to Harvard Business School, he would say, go to Harvard Business School! But he points out that online learning, like all disruptive products, is poised to succeed because it initially competes not against the best products in the field but against non consumption. The people who will buy it are those who don’t have any other options–who don’t have access to the particular courses, or the particular learning strategies, that it offers. Then, over time, it will get better and better until it is able to compete even with Harvard.
Comment From Troy Torrison
It seems that many innovations end up destroying jobs (at least in the short run). Creative Destruction they call it. Kodak was destroyed by digital cameras (which they, irony alert, helped invent). Many countries try to regulate this wrenching change by throwing up trade barriers, imposing taxes and tariffs and the like. America is no exception. I wonder what sort of policies he would favor to maximize innovation, GDP and, for lack of a better word, happiness.
Troy, I asked him whether he thought it was necessarily a bad thing for old companies to die and new ones to take their place. He thought that it was, for precisely the reasons you’re alluding to–the enormous social upheaval and general misery that results when a company fails, particularly a very large company that provides most of the jobs in its area. This is why he feels so strongly about helping companies avoid being disrupted. As for maximizing happiness, he has just written a book on that subject, “How Will You Measure Your Life?”, but it discusses happiness on a purely individual level–it is psychology, not sociology.
Comment From mj
The book sounds deeply personal. Did you get a sense why its written with two co-authors? Are they Mormon too?
His most recent book is indeed very personal, there is much in it about his own life and his family. He co-wrote it mainly for the same reason he co-wrote all of his other books except the first one: he is trying to do so many things at once (four or five companies, full-time teaching load, giving talks constantly, in addition to being a very involved father of five) that he simply doesn’t have the time to write it by himself. But his co-authors (in this case as in all the others) are full participants, and I assume they make the books better than they would otherwise be, precisely because they are not Christensen clones. James Allworth is a former student of his, bu far from being a Mormon, he is an atheist; Karen Dillon isn’t an atheist but she isn’t a Mormon either. Both James and Karen say that discussing how to live a good life with Christensen has affected them deeply, and I imagine that goes both ways.
Our time is up, thank you very much for all your questions and for listening in.