Clay Christensen's Life Lessons
Money and Finance

Clay Christensen's Life Lessons


Thanks to Will for passing this along.

On a warm April evening, Clayton Christensen arrived at his home in Belmont, Mass., desperate for a peanut butter sandwich. Christensen is diabetic, and with his blood sugar low, he seemed out of sorts. As he crushed the sandwich in a few massive bites, it had the effect on him that spinach does on Popeye. No longer confused about why a reporter had been waiting on his stoop, the 60-year-old Harvard Business School professor and celebrated author of The Innovator’s Dilemma began to form his thoughts with two distractingly huge hands. He said that he’d sometimes regretted calling his most admired theory “disruptive innovation,” because the disruptive part strikes some as more alarming than advantageous. He confided that he read the entire World Book Encyclopedia by age 12. And he shared two intimate encounters he’d had with God, including one on the eve of a “widow-maker” heart attack in 2007, the first of three life-threatening health issues in as many years.

At the turn of the century, The Innovator’s Dilemma became a surprise best-seller and a holy book for entrepreneurs in Silicon Valley, where Christensen’s theory arrived ready-made to explain what Internet companies were going to do to established businesses. Andy Grove swore by it. Steve Jobs admired it, although Jobs’s biographer, Walter Isaacson, points out that Christensen predicted that if Apple (AAPL) kept on using only its own software, the iPod would likely remain a “niche product.”

Pointedly, Christensen demonstrated that it wasn’t because of obsolescence or ineptitude that top companies falter, the way General Motors (GM) did after Toyota Motor (TM) rose up (and the way Toyota is now, under pressure from Hyundai Motor and Kia Motors). Rather, what caused executives and companies to fail was doing everything right. They listened to their customers, constantly improved their products and services, and maximized profits. Their undoing came from failing to do something counterintuitive: pursuing new opportunities at the low end of their markets. Hence, the dilemma of Dilemma: When do you cannibalize your own business in order to save it?

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Related link: Clayton Christensen on Charlie Rose

Related books:

How Will You Measure Your Life?

The Innovator's Dilemma

Related previous posts:

Clayton Christensen Presentation: Reinventing IT

Clayton M. Christensen on Disruptive Innovation in Health Care




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