By AMA Staff
Clayton M. Christensen is the Kim B. Clark Professor at Harvard Business School. He is the bestselling author of nine books and more than a 100 articles. His first book, The Innovator’s Dilemma, received the Global Business Book Award as the best business book of the year (1997); and in 2011 The Economist named it as one of the six most important books about business ever written. His most recent book is titled How Will You Measure Your Life? Christensen spoke to AMA recently for an Edgewise podcast. The following is a condensed and edited version of that interview. You can also listen to the complete podcast.
AMA: What prompted you to write this book?
Clayton M. Christensen: There were two vectors that converged in my life. The first one was from my study of the theory of disruption that emerged from my early work, where successful companies—including General Motors, RCA, and Bethlehem Steel—that did everything they thought was right, still ended up being killed. What was puzzling about this is that the senior management never pulled the team together and said, “Ladies and gentlemen, why don’t we hatch a plan to kill this company?” They all planned to be successful and they tried to pursue what seemed to be the most profitable venues. Yet doing what’s right killed them. They didn’t end up where they planned to go. That’s what we call “The Innovator’s Dilemma”—doing the right thing.
And as I just looked at what is happening to my friends and classmates as we have gotten older, I can tell you that there never was a time in their past when they said, “You know, I’m going to have kids, and then I’m going to divorce my spouse so that she can marry somebody else and raise my kids on the other coast.” Nobody ever planned to do that, and yet a shocking number of people actually executed a plan in their personal lives that they never planned to do. And that observation caused me to say, ah, the same understanding of why this happens in companies actually explains to a stunning degree why this happens in our personal lives.
AMA: How Will You Measure Your Life? includes a story about Andy Grove at Intel. He asked for your opinion about new product or service offerings. And while he was looking for specific Intel-only perspectives, you told him a story about U.S. Steel. Now, why did you have to tell Andy that story, and why did you have to tell the readers that story about you telling Andy the story?
Christensen: Well, somebody in his organization had read about the theory of disruption, and said, “I think this theory has an implication for Intel.”
So Andy called me up and said, “Look, I don’t have time to read your stuff, but come out and tell us what it means for Intel.” And when I showed up, it turned out that Andy’s life had changed. He didn’t even have time to talk to me. But he said, “Just tell me what your research implies for Intel. I got to get on with life.”
And I said, “My problem is, I actually don’t have an opinion about Intel. But there’s a piece of my research that has resulted in a theory, and the theory has an opinion about Intel. And so I just need to have the time to explain this theory.” As quickly as I could, I described what the theory of disruption was, and then Andy said, “Look, I got your stupid theory. Tell me what it means about Intel.” And I said, “I can’t quite tell you this yet, because I need to describe the process: somebody comes into the bottom of the market and kills the leader. It happened in a totally different industry, so you can abstract yourself from the detail.”
I described how this had happened in steel. And when I was done with the story, Grove said, “Oh, I got it. What you’re telling me is...,” and then he went on to describe how there were two companies that were coming in from the bottom of the market, like Toyota did it to General Motors. And then he said, “Now we got to go down to the bottom of the market, don’t we?” They did, and launched what they ultimately called the Celeron processor.
I have thought about this a million times. You know, if I had tried to tell Andy Grove what he should think, I’d have been killed. So I told him how to think about it, and then the answer was obvious. I didn’t have to convince him of anything. And that’s what I’ve tried to do ever since: help people understand how to think through a problem so that the answer is then obvious to them.
AMA: In an age of helicopter parenting and entitled childhoods, you make a strong case in the book for letting kids benefit from their mistakes and failures. Can you talk a little bit about that?
Christensen: If your child has never taken algebra, she’s not going to understand algebra. You don’t really understand a problem unless you have wrestled with that problem. And so if you, as a parent, try to protect your children so that they don’t have to wrestle with messy problems whose outcome could be uncertain, and which are onerous, they will grow up not having the courage and the high self-esteem to wrestle with these problems as adults. And so, we actually have a very large portion of the young men and young women who are chronologically in their 20s yet who emotionally are still in their teens.
AMA: Today, some parents outsource their children’s development and many companies outsource their production. Why is this dangerous?
Christensen: I’ll give my answer with a story. When my wife Christine and I were married and moved to Boston to go to graduate school, we had no money. Christine was a really talented seamstress, so she made all of our clothing. We got a large chunk of land from the town and built our own garden. We raised almost all of the vegetables that we were going to need and we canned them for the winter. We’d pick the apples and make applesauce for us and our kids. We did this because it was a cheaper way to put food on the table than to buy it.
But over time it became so much easier and so much cheaper to buy clothing rather than make it, and to buy food rather than grow it. So little by little, we outsourced those things to entities for whom it was their core competence, and who could provide higher quality at a lower cost.
It turns out that the doctrine that is taught to every company is: if there is somebody else who can make it better and at lower cost, you should outsource to them what is their core competence so you can focus on your own. But in the process of following that prescription, company after company begins to outsource literally everything they used to do, until there is nothing left inside of them. If they wanted to do something, they wouldn’t have the ability to do it. Even companies as magnificent as McDonnell Douglas; in the DC-3 they made everything. By the time they came to the DC-10, they outsourced everything and there was nothing left to do; the company was gone. So there isn’t a DC-11, because they outsourced the company.
We have done the very same thing in our personal lives. Step by step, we find people outside the family who can provide better quality at lower cost. So there really isn’t much work left to do in the home, except to clean up your own mess—and we don’t do that very well.
As a consequence, because we have outsourced work, how in the world can we create the next generation of Americans, when they don’t have an instinct for what it means to confront difficult problems and to solve them, and to take responsibility? So in so many ways, we have ended up where we did not intend to go.
AMA: Even though your intentions were good.
AMA: A couple of times in the book, you either say or imply that for older people, it may be too late to undertake some of your recommended steps for either improving your relationships, or staying true to a straight ethical stance. Does that mean the book is of more value to a younger adult than to a person who’s further along the path?
Christensen: Well, I do think the book is very useful for young people, but there is also value for those of us in middle age who are trying to understand, “Why have things happened to me in an unpredictable way? And is there anything I can do?” It’s really important for us to look back and say, “Did I live a really good life? Will people remember me for the good impact that I had, or not?”
Because we all are judged. Some people believe that God will judge us, but those who don’t believe that will find that the people they know and their family and friends will judge them.
You can further explore some of the topics explored in this interview in these AMA seminars:
Doing It All: How to Stay Focused and Engaged
Developing Your Emotional Intelligence
About the Author(s)
AMA Staff American Management Association is a world leader in professional development, advancing the skills of individuals to drive business success. AMA’s approach to improving performance combines experiential learning—“learning through doing”—with opportunities for ongoing professional growth at every step of one’s career journey. AMA supports the goals of individuals and organizations through a complete range of products and services, including seminars, Webcasts and podcasts, conferences, corporate and government solutions, business books and research.