Review: The Innovator’s Dilemma — Clayton Christensen

9/10 Intelligence Boost · 5/10 Enjoyable

1997 Harvard Business Review Press · Revised editions in 2000 and 2016

Overview

Why is success so difficult to sustain?

It’s the question that gave birth to The Innovator’s Dilemma — a book that would go on to be called “a holy book for entrepreneurs in Silicon Valley” (Businessweek) and would dub Clayton Christensen “the most influential business thinker on earth” (The New Yorker). This question drove Christensen to leave his role as CEO of a public company and to enroll at Harvard Business School as a PhD student at the age of 38 so he could study it full time.

If you’re wondering, do real human beings actually do things like that? — Christensen’s status as a real human might already have been in question. He graduated in the top 1% of his class at BYU, attended Oxford as a Rhodes Scholar, earned an MBA from Harvard, consulted at BCG, served as a White House Fellow, and became a CEO of a public company— all before 40.

He clearly had a thing for intellectual powerlifting.

His research led him to a fascinating answer: even the best-managed firms often fail because of what he called disruptive technologies.

Of course, the word “disruptive” has since been thrown around with such abandon that it's almost lost all meaning. But at its origin, Christensen’s theory is disciplined, careful, and compelling.

While it is audacious to assert a single, sweeping answer to this question — and Christensen certainly overreaches at times — the book’s lasting value lies less in an airtight theory of disruption and more in its brilliant, data-backed retelling of recent business history.

Drier Than Death Valley

Fair warning: before you reach Christensen’s legendary insights, you must make it through an exceedingly dry history of the disk drive industry. At least half of the book is devoted to a painstaking analysis of the rise and fall of various disk drive technologies.

Yes, mentioning disk drive history may cause your date to excuse themselves for the bathroom. And no, disk drives have nothing to do with disc brakes or disc jockeys.

If you don’t know, they are the distant ancestors of the memory chips in our phones. Today, they survive mostly in phrases like “copy the hard drive” or “out of disk space.”

If reading a hundred-odd pages about 8-inch drives overtaking 14-inch drives, only to be overtaken in turn by 5.25-inch and 3.5-inch drives, sounds thrilling, you’re in luck.

If not, this might be the time to take an Adderall.

Just when you think you’ve survived the disk drives, Christensen summons up heaps of data on mechanical excavators, steel mills, discount retailers, and motorcycles.

Still, if you can hang in there, our reward is a stunning view of how industries rise, fall, and transform.

View of History

Somehow, through Christensen’s explanations and charts of megabytes per cubic inch, he starts to win us over. By the end of Chapter One, we feel like we’ve gained the wisdom of living through 50 years of business history.

His thesis is that industrial evolution has recognizable patterns. He shows us recurring scenarios — performance oversupply, northeasterly drift, value networks, sustaining and disruptive technologies — that start to explain failures and successes.

Christensen argues that companies often serve their existing customers too well: chasing higher margins, more features, more performance, until suddenly a cheaper, simpler alternative invades from below.

These concepts, once described, are intuitive and broadly applicable — like cognitive biases for companies. Through Christensen’s eyes, mind-numbing charts turn into real, high-stakes dramas that help explain our world today.

Disruption Can Be Exciting

There’s something thrilling about disruption.

Kids have an instinctive sense of what’s new and cool and what is not — the new phone, the new toy, the new app — these are the subjects on which companies rise and fall. Sometimes the next big thing comes from the expected source, like The Wire following The Sopranos. Other times, it comes out of nowhere — like when Google search appeared one day and knocked Yahoo search out of the ring.

Christensen’s book tries to explain that second case: the upset by the underdog.

We do love an underdog. And in most cases, the disruptive technologies Christensen describes seem to democratize access, creating cheaper and more widely available products.

Is disruptive technology a path to utopia? Probably not. But Christensen makes a strong argument for the power of competition to create societal good.

That said, when we put on our entrepreneurial hats and go looking for the next disruptive rocketship, we may find Christensen’s theory less useful than we had hoped.

Dated, Highly Unique Industry

He largely defines disruptive technology through examples — and at first, all his examples seem to be just smaller and smaller disk drives.

It begs the question: how representative is the disk drive industry?

If a team of engineers left Villeroy & Boch to build a revolutionary 3.5-inch dinner plate, I wouldn’t sell the family farm to invest. Nor would I back the 1.7-inch dinner fork.

The disk drive industry — and the broader computer industry it supplied — have experienced something incredibly unique since the 1950s: They have grown at a mind numbing pace; we’re talking in the ballpark of a million percent growth.

Christensen chose disk drives because their rapid evolution made patterns easier to observe. But we can’t help doubting whether a theory born from such a breakneck industry can be broadly applicable.

To his credit, he does show that disruption happens outside of disk drives — in mechanical excavators, steel mills, discount retail, motorcycles, and computers.

Still, it’s easy to imagine that once armed with a disruptive hammer, every industry starts to look like a nail.

“Disruptive” Becomes Arbitrary

It doesn’t help that being “disruptive” or not is highly debatable.

In trying to fit his theory so neatly to the disk drive industry, Christensen may have weaved too fine a net. Plenty of innovations have toppled leading firms without meeting his criteria for being "disruptive."

By his definition, a disruptive innovation must (1) initially underperform the mainstream alternative, and (2) enter either a low-end or entirely new market.

It’s frustrating — and bad for the credibility of the theory — that you can propose examples like taxi companies losing to Uber, or Nokia and Motorola losing to Apple, only to find out Christensen said neither was disruption because they didn’t precisely fit the mold.

It is possible Christensen played up his strict criteria simply to stop businesspeople from adding "disrupt" to every other sentence.

Still, if too many real-world examples don’t fit the model, the theory starts to feel more like Monday morning quarterbacking than a reliable roadmap.

Backed by Data and History

Yet these critiques don’t diminish the achievement of The Innovator’s Dilemma.

Christensen's cognitive rigor is something to behold. We can tell he is deploying considerable mental horsepower in an earnest pursuit of the truth.

In the preface, he tells us something key to his thinking: “Data only exists in the past. Theory must be derived, therefore, from careful observation of the past.”

Christensen is trying to apply the scientific method to business strategy — and in doing so, he almost defines a new genre.

The Innovator’s Dilemma is that rare thing: a scholarly business book. Between the piles of biographies, autobiographies, how-tos, and advice books, Christensen’s work stands as one of the few examples of evidence-based business theory.

Are his conclusions always supported by ironclad proof? Maybe not. But they are drawn from a virtuosic study of history and a firm grasp of a daunting number of facts.

Unintended Consequences

While The Innovator’s Dilemma often frames disruption as a democratizing force — giving startups a path to challenge giants — it is, at its core, a handbook for incumbents. Christensen’s goal is to help great companies stay great. Yet one wonders: if the most powerful corporations learn to shield themselves from competition, is that really a win for society?

Christensen’s solution to the dilemma is essentially to create conglomerates, and he supplies a framework for making them successful. But without the fresh faces of successful startups, don’t industries drift toward monopolies?

By hacking disruption, has he created a cure that is worse than the disease? If disruption slows — if startups find it harder to topple the entrenched — we risk not just stronger monopolies, but a world that is less diverse, less dynamic, and less alive to possibility.

Final Verdict

The Innovator’s Dilemma is far from a perfect book. It’s almost as dense as a black hole, its central theory is brittle, and it may even be unraveling the forces of creative destruction that kept our economy healthy.

But it is also a serious, courageous attempt to combine science with business strategy — and a vivid journey through fifty years of industrial history.

Though by the end of the book your brain may feel lightly poached, Christensen’s ideas, even when imperfect, sharpen the way we see the world. Once he’s shown you sustaining and disruptive technologies, the pull of value networks, and the slow drift of industries, you can’t unsee them.

If you can endure the desert of disk drives, the view from the other side is worth it.

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Quinn Mitchell is a product manager in Brooklyn, NY writing about startup strategy, product theory, and technology. More at LinkedIn.