Just Read : The Innovator's Dilemma

In a previous post I hyperlinked a short text by Clayton M. Christensen - remarking then that the article may have just been a rehash of the ideas from his bestselling book The Innovator's Dilemma. It was.

It is a very interesting book and it is well researched, with precise accounts of cases of disruptive and sustaining innovation in a number of different markets.
The ideas presented are clear, and clearly backed up by the cases given. After having read it one can't help though to be left with two feelings:

1. The article really explains the ideas with sufficient detail in a much shorter space
2. There is surprising little reference to the obvious and quite complete biological analogy of his findings

As to the first point: The description of Christensen's discovery is quite adequate in the Tech Review article. What is not there, is the accounts of how to deal with disruptive change, as well of course as the detailed case stories.

As to the second point: There is a passing reference only to the almost complete analogy to the theory of evolution Christensen's ideas present.

We can give his findings in biological terms, cluetrain style. First in Christiansens terms:

• Companies exist in value networks of suppliers and consumers offering 'compatible' goods to one another
• Different value networks coexist in the same market
• Well-run companies generally are good at offering products competing within their own value network with substitutable products from other companies within the network
• Value networks migrate. That is, as technology changes supply chains relevant in one value network may invade other value networks, beating out the existing companies within the network

And in biological terms:

• Companies are biological organisms
• The market is their ecosystem
• The value network is an ecological niche
• The survival of the fittest takes place as a fight for resources within an ecological niche - as a direct competition for comparable resources
• Ecological niches migrate. As organisms evolve, they migrate toward consumption of other more available resources, thus crowding out original consumers of a given resource

The analogy is perfect and explains Christensen's findings. The fact that companies fail to see the disruptions as competition may be seen simply as a case of the disruptors utilizing different resources. Eventually the disruptors migrate towards the resources consumed by the incumbents but not at onset.
Clearly the evolutionary pressure does not pitch the disruptors against the incumbents, since they occupy different niches, so the incumbents do not evolve to fight the disruptors.

Christensen does mention ideas like this that apparently appear in the literature, but he dismisses them, even though they perfectly explain his findings. His dismissal comes from a an unwillingness to accept the determinsm inherent in this biological mapping, but even his alternative theory of how organisms, er companies, adapt to disruption has biological interest.

Let's just review the two main competing ideas of evolution when that theory was new. The idea that environmental pressure forces change has been discovered by several scientists through history. Before Darwin there was Lamarck. Lamarck is mainly famous for his theory that behavioural change forced by environmental change is actually heriditary, which is obviously false for the theory of gene based evolution, that has been so successful.

The determinism in the economic uses of evolutionary theory comes about as a darwinian consequence of the mapping to biological terms.
While evolution in darwinian terms means that the species adapts, no individual organism can change to adapt, they merely fail or succeed. But companies can adapt. Indeed, the dstinguishing characteristic of cultural, knowledge based systems - as opposed to natural, gene based systems - is that culture is Lamarckian.
Cultural evolution is based on adapting individuals that are changed by the changes in their ecological niche.

The other reference that comes to mind related to this book is Thomas Kuhn's 'The strufture of scientific revolutions'. This too presents a mapping, an even more obvious one, where the disruptions constitutes paradigm shifts in the field of industry. This analogy is also absent from the book.

Posted by Claus at February 02, 2003 12:19 AM