January 30, 2018

Why Disruption is good for Businesses… and everyone

In 1992, the business world added a new word to its lexicon: ‘disruption.’ The ‘business origin’ of the word, however, can be traced back to 1989 when Clayton M. Christensen was offered a place on the doctoral program at Harvard Business School (HBS). Christensen’s main interest revolved around why companies fail and shortly after he joined the HBS faculty in 1992, coalesced his ideas into a book published in 1997 and titled, The Innovator’s Dilemma.

 

In the book, Christensen argued that companies fail not because executives don’t make good decisions but because they focus on existing market and value and fail to identify what an untapped customer wants. Consequently, the market gets ‘disrupted’ because a new company breaks the market chain by introducing a new (and often cheaper) product thereby displacing an earlier product and ‘disrupting’ the market. Although this idea has been attacked elsewhere, it is instructive to point out that there are merits to Christensen’s findings.

 

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