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Missing the Mark on Disruptive Innovation

by Juan Pablo Vázquez Sampere 3/15/2016

Missing the Mark on Disruptive Innovation

By Juan Pablo Vázquez Sampere

Every time I hear about a new study on disruptive innovation, I feel excited about the possibility that someone will come up with a way to explain the theory in a much clearer and more transparent manner. More often than not, I end up disappointed — as I was by Andrew A. King and Baljir Baatartogtokh’s article, “How Useful Is the Theory of Disruptive Innovation?” in the fall 2015 issue of MIT Sloan Management Review.

For starters, King and Baatartogtokh argued that Clayton M. Christensen’s theory of disruptive innovation has not been adequately tested in the academic literature. I would encourage the authors to revisit the literature, because to my count, there are more than 40 articles, including much of an entire issue in a leading academic journal (the Journal of Product Innovation Management in January 2006), that test and challenge disruption in many different ways. Furthermore, disruptive innovation is composed of more than four elements, yet the authors chose to test only four.

What’s more, the authors surveyed only 79 experts to evaluate 77 industries. As a result, some of the conclusions attributed to the experts are questionable — such as one expert’s argument that it was unreasonable to assume that wood-products companies could respond to disruption from plastics, since the capabilities required were different. Yet many companies develop new and different capabilities. To name just a few examples, the Goodyear Tire & Rubber Co. retooled extensively to develop radial tires, IBM was successful at diversifying from mainframes to personal computers, and incumbent landline telephone operators developed capabilities for wireless communication. If incumbents can increase their profitability by introducing a particular product or technology, they often find a way. However, one of the fundamental tenets of the theory of disruptive innovation is that, when contemplating a disrupter, incumbents are motivated by profits to flee rather than fight the disrupter.

Another conclusion King and Baatartogtokh reach is that 38% of incumbents did not flounder as a result of disruption. That statistic may not be meaningful for several reasons. In some industries, such as retailing, the process of disruption can take decades. (In other industries, such as minicomputers when they were disrupted by personal computers, things can happen relatively fast, which makes it easier to see the entire picture of how the industry evolves.) Second, the disruption might affect only one business unit of the incumbent, so in some cases, the entire company survives even though that particular unit is no longer successful. Regulators may also intervene to help protect powerful incumbent companies. For all of these reasons, a long period of coexistence between incumbents and disrupters does not necessarily mean that the process of disruption has halted.

More generally, I believe there is a responsibility on the part of researchers to proceed carefully when testing a theory. It is truly important to find some sort of data set that is large enough and verifiable enough to support valid conclusions. That’s more important than making headlines.

Juan Pablo Vázquez Sampere is a professor of operations and technology at IE Business School in Madrid.

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