Management Thinker Profile

Clayton Christensen

a) Born on April 6, 1952, Clayton Christensen is a name synonymous with the study of innovation for commercial enterprises. He currently is the Robert and Jane Cizik professor of Business Administration at the Harvard Business School. Harvard business school has awarded him in 1992, with the best dissertation award from the institute of management sciences for his doctoral thesis on technology development in the disk drive industry.

Christensen has started three successful companies and is an experienced entrepreneur. His business profile includes being director on several boards of different public and private companies. Currently he holds a position of board member at Tata Consulting Services, Frankiln Covey, W.R. Hambrecht and Vanu Inc. Apart from being on boards of these companies, Christensen also serves on Singapore's Research, Innovation and Enterprise Council (RIEC). He has also consulted for many of the world’s major corporations. Taking inspiration from his research, these companies have been able generate tens of billions of dollars in revenues every year from product and service innovations. He has also helped Boston Consulting Group, 1979 to 1984, where being a consultant and project manager, he was involved in founding the firm's manufacturing strategy-consulting practice.

Professor Christensen has been instrumental in writing also. His books have received various awards and accolades. He is the bestselling author of five books, including his seminal work The Innovator's Dilemma (1997), The Innovator’s Solution (2003), and Seeing What’s Next (2004). Recently, Christensen two new books have focused on disruptive innovation for social issues. His book for school, Disrupting Class (2008) was named one of the "10 Best Innovation and Design Books in 2008” by BusinessWeek and the best Human Capital book of the year in the Strategy + Business Best Books of 2008. Disrupting Class analyzes the cause behind schools struggle and offers solutions for these issues. His latest book for healthcare industry, The Innovator's Prescription (2009), goes in detail about how to fix our healthcare system.

“In 2000, Christensen founded Innosight, a consulting firm that builds on disruptive innovation frameworks to help companies create new growth opportunities. In 2007, he founded Rose Park Advisors, an investment firm, which is focused on identifying investment opportunities by applying the framework of disruptive innovation. Christensen is also the founder of Innosight Institute, a non-profit think tank, whose mission is to apply his theories to the most vexing problems in the social sector.”1

“Consistently acknowledged in rankings and surveys as one of the world’s leading

1 http://www.innosight.com/team/profiles.html?id=13

Management Thinker Profile

thinkers on innovation, Christensen is widely sought after as a speaker, advisor and board member.  His research has been applied to national economies, start-up and Fortune 50 companies, as well as to early and late stage investing.”2 Having all these accomplishment justifies Christensen’s position in Thinker’s 50 list.

b) Christensen is the architect of and the world’s foremost authority on disruptive innovation, a framework which describes “the process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.”3

“A key finding of Clayton Christensen's research is that many of the companies that grow from start-ups to become industry giants are built around innovations that create new markets or reshape existing ones. Just as established companies systematically underestimate how large entrant competitors will become, tools of financial analysis systematically under-estimate their growth potential. Because these entrant companies tend to be misunderstood, the market misjudges their impact, presenting an investment opportunity.”4

“Disruptive innovations have characteristics that traditional customer segments may not want, at least initially. Such innovations will appear as cheaper, simpler and even with inferior quality if compared to existing products, but some marginal or new segment will value it.”5

6

2 http://www.innosight.com/team/profiles.html?id=133 http://www.claytonchristensen.com/disruptive_innovation.html4 http://www.roseparkadvisors.com/5 http://innovationzen.com/blog/2006/10/04/disruptive-innovation/6 http://innovationzen.com/blog/2006/10/04/disruptive-innovation/

Management Thinker Profile

“According to Christensen the crucial factor to understand is the concept of value network, described as “the context within which a firm identifies and responds to customers’ needs, solve problems, procure inputs, react to competitors and strive for profits”.

First of all, operating under such value network might lead a company to “listen too much” to its main customers. As a result it will not recognize potentially disruptive innovations that serve only marginal customers. Secondly large companies will not be interested in small markets; they hardly offer significant growth opportunities. Again this will lead companies to completely ignore the disruptive innovation or to wait until the market is “large enough to be attractive”. That is exactly when new entrants attack incumbent’s turf, and by that time it is usually too late.

In order to solve both of these problems organizations should create an independent business unit whose size matches the emerging market. Quantum Corporation, a leading producer of 8-inch drives, recognized that 3.5-inch drives could have some applications in the computer industry, but they were not sure what those applications were exactly. Instead of shelving the project they created a spin-off unit to develop such 3.5.inch drives. After ten years the 8-inch market had completely disappeared while their small venture had grown to become the world largest disk drive producer.”7

Christensen academic findings are very important part of a company’s strategic management. His findings act as an important force for companies, which suggests them to be always cautions and never close their eyes towards new opportunities. If they indeed do this mistake, then it might result into a disaster in long run for them. His new book relates his findings to the social causes, which shows that his theory is widely.

7http://innovationzen.com/blog/2006/10/04/disruptive-innovation/

Management Thinker Profile

BibliographyChristensen, C. (2010). Key Concepts - Disruptive Innovation. Retrieved from http://www.claytonchristensen.com: http://www.claytonchristensen.com/disruptive_innovation.html

Christensen, C. (2010). Rose Park Advisors - Home. Retrieved from http://www.roseparkadvisors.com/

Christensen, C. (2010). Team Profiles. Retrieved from www.innosight.com: http://www.innosight.com/team/profiles.html?id=13

Scocco, D. (2006, 10 4). Disruptive Innovation. Retrieved from www.innovationzen.com: http://innovationzen.com/blog/2006/10/04/disruptive-innovation/