Ted Audio Collective HBR Presents Hi everyone, this is Yang Mi.
It's been a tough week at HBS, as you may have heard, Professor Clay Christensen passed away this week.
In their obituary, the New York Times called him a Superstar Management Guru, best known for his theory of disruptive innovation.
But the three of us knew him more simply, as a dear friend and colleague.
For years, my office was next door to his, and I'll never forget how gracious and patient he was with every single person who came knocking on his door.
And believe me, there were so many.
He was a kind, beautiful, purpose -driven man.
And the three of us will miss him dearly.
Felix was able to sit down with our Dean at Harvard Business School, Dean Nitin Noria, for a conversation about Clay.
And in memory of him, we thought we'd share that conversation about him with you.
Thanks for listening.
The very sad news is still with us.
It's hard to believe that Clayton Christensen is no longer here.
But I appreciate the opportunity to speak with you about him as a scholar, as a teacher, as a person.
You followed his career for a long time.
First, as a colleague on the faculty, the last decade as Dean of Harvard Business School, his early research found such amazing resonance.
What was it about the idea of disruptive innovation that fascinated Steve Jobs and many other CEOs?
I got to know Clayton actually when he was a doctoral student.
I was on the faculty.
And even though he's almost a decade older than me, it's one of these strange experiences that I had early on where I was the faculty member.
But it was very clear that this person who was a doctoral student was in many ways, even then I could tell, was going to be a better academic than I was ever going to be in my lifetime.
You could see it. I could see it early on.
And the reason why I could see it is that he had latched on to this very interesting phenomenon in the world, which was now we're going to all date ourselves.
There may be young people who listen to this podcast who might say, what the hell are these people talking about?
But you remember those disk drives, right?
We went from these giant 11 and a half inch things and they had this evolution where every 18 to 24 months disk drives would go from one format to a second format.
So these are the early days of the computer industry.
I remember when I came to the United States, we were on the five and a half inch floppy drive and then I moved to the three and a half inch version.
So even I saw that evolution in my own time at the school.
And Clayton ran into this interesting observation that the people who had been the dominant player in one generation of disk drives were never the dominant player in just the next generation of disk drives alone.
So it's not even the case that this is like mini computers and PCs.
You're producing the same thing, which is supposed to play the same function.
So it's not about seeing the future.
We know where the future goes, except you can somehow not keep up.
Yeah, so he couldn't understand why would it be the case that even in a product with a life cycle of 18 to 24 months, the dominant player in one generation of a technology was never the dominant player in the second generation of the technology.
And Joe Bauer, who is another colleague of ours at Harvard Business School, was his advisor.
And Joe Bauer had this theory of resource allocation.
He said that all companies have habits of how they do resource allocation.
And somehow Clayton took that idea and this observation and said maybe the reason why companies are not good at anticipating what the next thing will be and someone else produces it is that they get so locked into resource allocation on the technology that is dominant for their company and from which the cash
flows of their company depend that when they see something out of the corner of their eye, even though they might suspect that this is going to be important, their goals are all focused on driving the innovation that they're best known for.
And that little insight is what led to this idea of the innovator's dilemma because each of these companies have been innovators and yet couldn't innovate the next time.
I think that the timing was extraordinary because it was almost as if while Clayton studied this in hardware, the software revolution was just ready to take over the entire world and the internet was just coming.
So sometimes I do believe that the timing of great ideas is not unimportant.
It matters. And part of what always fascinated me is like what's deeply not intuitive is that it's the fact that companies are really good at what they're doing, which then in the end becomes an issue.
You get better and better and better at serving the customers you have with the products you know about.
And then you have a whole resource allocation mechanism that doubles down on that.
Just consider hardware business school.
We are extraordinary at the MBA program and so any investment that says we can make our MBA program better will always gain first priority at the school.
Heaven forbid, but if the MBA were ever going away...
And Clay used to say that right, you know that he would challenge us and say, what's the future of the MBA?
What's the future of hardware business school?
So he pointed that same mirror at us too, but I think that that was his great intuition that in fact it is the strongest companies who have the most dominant position in any generation of a product or a service that weirdly it's the very excellence that makes them the most vulnerable.
So it's not like weak companies are the ones that suffer.
It's the strongest companies that suffer.
Yeah, the universality of the idea is really interesting, but part of it is also that that's not really how we think about business because you want to be really good at what you do.
And then that somehow becomes...
Yeah, in fact you look at the number of ways in which we teach people that, core competence, stick to your knitting.
I mean, there's so much in business thinking that says to you, focus on what you know how to do, focus on your core competencies, don't expand yourself in ways that are going to distract you from the thing that you're very good at.
So it's almost as if the things that we teach you to be excellent in one generation have built in them the risk of missing where something else might come from.
I think the rise of the internet, the rise of all these digital businesses that provided very different ways for people to enter a market, whether it was Amazon that enters strangely through books, and you say, is a bookseller going to be a threat to me if I'm Walmart?
I mean, you don't imagine.
Like, you know, you say, okay, how much of Walmart shelves are books?
Like, it's a small part of what I sell, so you ignore them, and they grow from books to selling other things, and before you know it, they become an extraordinary rival of Walmart.
So I think that what made his idea so important was that embedded in them was something that was probably universally true and could have even been applied before the internet.
He used examples like the steel industry in which he talked about how mini mills succeeded, integrated mills.
But I think that what made the idea cash fire is that its timing came with the rise of the internet when this was happening to every physical company who was facing disruption by this new world in which software eats everything, and then this was the perfect idea.
You burst onto the scene with this idea of disruptive innovation.
How did you see it change business in America?
What influence did it have in companies?
I don't know about you, Felix, but I've never been in a conversation with any company now in the last 20 years in which the word disruption doesn't come up somewhere in the conversation.
Now, at times it comes up in ways that you say, did you actually ever read Clay's work?
But it's almost become a core idea, like the very idea where your competitive threat might come from.
It's become literally synonymous with people thinking, what might competition look like that I'm not anticipating today?
So I think disruption has almost become a phrase that people use to say, there's some competitor out there who is using technology in ways that will take away my business today.
And everybody has at least begun to be somewhat paranoid about that.
And Andy Grove, who was the first person who gave wind to Clay's ideas, he wrote the book Only the Paranoid Survive.
And in many ways I think that Clay has allowed everybody to be paranoid now.
Yes. Is your sense that companies have gotten better at it?
Are they less likely to overlook these unlikely competitors?
Slightly, but I wish I could say a lot is the honest answer.
I at least think that people are now a little bit more vigilant, a little bit more open to the possibility.
But I still think what Clay said, which is there's something about organizations as almost internal ecosystems that get fully aligned around their existing way of doing business.
And that creates a stickiness that is not that easy to move out of.
Yeah, yeah. To be honest, you still experience that more than not.
I mean, just take Walmart, I had the great privilege of recently visiting that company.
And Amazon's been around for 20 years now, right?
It's not like some surprise.
And yet you can see that this company still has to struggle with figuring out, okay, we can't disinvest from our stores.
To keep our stores still vibrant, we actually have to invest to refresh them to make sure that they're still exciting places.
So how much do we invest in that versus how much do we invest in this new digital technology?
Yeah, yeah. And at least Walmart is saying maybe our answer is that we're never going to beat Amazon and Amazon, so we're going to create something that's different.
We're going to create omni -channel, we're going to leverage our stores and digital at the same time.
But in just being at that company, you realize how hard it is for existing companies, even when the threat is known, right?
This is not like some...
Yeah. Like Clayton was worrying about people who may not even know where the threat is from here.
Yes, that's right. It's known, it's been around for 20 years.
Yeah. So that's one sense in which his idea is far more precise than I think sometimes people give him credit to.
When he mentions disruption, there's a specific meaning having to do with the difficulty of being the leader in seeing the threat.
I remember this article that he wrote in the Harvard Business Review where he argued, I think in a very powerful way, that we shouldn't think of Uber as disruptive.
If I'm a taxi company and I see Uber come along, I know that very minute, this is something that I need to take seriously and I need to think about my business model.
So the way he uses disruption is less, you know, there's a new flavor of yogurt on the shelf and that's disrupting the market for yogurt.
He uses disruption in this very particular way that speaks to the difficulty of successful organizations to see the next wave.
And to, even if they see it, to then begin to change enough of their internal habits of mind, habits of resource allocation, which customers they imagine the need to serve.
So I think what he was trying to remind us is that very successful companies are successful because they have ingrained, habitualized, powerful ways of serving a group of people and that's not easy to change.
Yeah, yeah. Like, just think of us again.
I keep reminding, you know, whenever I think of his stuff, and especially since he's past, I've become even, there have been many an occasion when I've said, oh, my God, let's just remind ourselves of what he had us think about the future of business education.
So it was a really powerful idea at the right moment in time.
And then, of course, I think it's also true that the messenger himself had a big influence on the resonance that the idea found.
What was he like? What made him so special as someone pointing out these deep insights?
So I don't know if you ever attended a talk that Clay gave where he would present the idea.
It was almost slow.
Like, you know, he wasn't one of those people who tried to vow you with flashy brilliance or wit or anything like that.
He would like gradually build up an idea.
And he wanted to take you through it step by step.
As you said, he was so meticulous.
I sometimes worry that the word is used so casually and so with such electricity that you might imagine a person on the other side who has that same character.
But he was anything but that.
It was almost as if he caused you to quieten down.
The feeling that I had in any time I heard Clay, and I had many, many occasions to hear Clay, was he asked you to slow down as opposed to speed up.
You might think that the person who was teaching you disruption would say, come on, get on with it.
But it was the other way around.
It was like, slow down.
Think about this carefully.
Let's think about it together.
It's almost a way of thinking that he was trying to promote as much as a particular idea.
And that, of course, had a profound impact on him as a teacher also.
Did you ever see him teach?
Yeah, I saw Clay teach.
We have many, many different styles of teachers at her business school.
We do. And you have some of them are your colleagues who know how to jump on tables and jump on boards.
And they're fabulous at what they do.
And what he wanted students, and he would say this openly, he says, look, everyone needs a theory by which to approach the world.
That's what he would say to students.
He says, you might not think that you need a theory, but you have a theory.
You can't act on the world without having some cause -effect understanding of what's going on.
So my entire goal is to help you a surface what your theory might be in terms of how you understand any problem.
And over time, help you develop a better theory by which to look at the world.
And he just viewed disruption and his ideas as one example of a theory that would cause you to say, what causes some people to be winners and some people to be losers, and what causes successful companies to sometimes fail, and an upstart that you would hardly imagine would be their rival to then succeed?
He says, I have a theory for that, but that's a way of thinking.
So if you want to hire a good employee, what would be your theory for that?
And how would you think about that?
He used to teach students to say, in the end, I want you to think about a better theory that would be more useful to you in the world.
And so his entire orientation was to just push students to say, so what makes you believe that?
What evidence would you have that would allow you to support that?
Can you think of a counterfactual?
It's really a very interesting approach to teaching.
Yeah, I had an early encounter with him.
This was towards the end of the semester.
And I think it speaks to your point about this push for an ever better theory.
I went to his office and there were two stacks of papers on his desk.
And one was really, yeah, I don't know, 50, 60 papers or so.
And the other stack was really minimal, just like four or five.
He said, oh, I got the student papers back.
These five think the theory of disruptive innovation is exactly right.
These 62, and I'm sure it's not a coincidence that it was 62, these 62 think there's something deeply wrong with the theory.
These are the ones that I'm really interested in.
And I thought it's so remarkable that, you know, a person of his stature has become so well known for a particular theory that even decades after he developed it, he still pushed to make it better.
He still pushed to see the wrinkles where it wasn't quite right, the wrinkles where it could be improved.
Which was just astonishing to me as a personal trait.
And I think if you, all of us have had teachers, and when you meet a teacher like that in class, who you are willing to revere, right?
You say, I'm here to bow to you.
And that person then has this humility to say, no, no, no, you're not here to bow to me.
I'm here to learn from you.
And we're going to learn together, and we're going to try and develop theories of a range of things that we need to understand that would make organizations better.
He could have easily titled his course at Harvard Business School, Disruptive Innovation.
He didn't title it that.
He called it Building and Sustaining a Successful Enterprise.
I've often thought what made him choose that title as opposed to, if he just called it disruptive innovation, the whole world would have applied for the course because people don't.
The whole world applied for his course.
He had the most successful second year elective for at least this last decade and maybe even more than that.
You ran the MBA program for a period of time, and young me did too, so you know how the constant complaint of the students was that we were never offering enough sections of him.
There's one thing that specially moved me, you know, so Clay has had almost a decade of struggling with a variety of illnesses.
And as you know, at one point he had a stroke, and when he had a stroke, he started to lose some words.
His mind would not formulate all the thoughts that he had.
And I remember him coming to me, and I say, Clay, maybe you should, you know, you've done so much for the school.
You don't have to teach.
Perhaps you should take some time to recover.
He says, no, Dean, you know, I'll just tell the students that sometimes words don't come to me, and they'll help me find the word that I'm looking for.
And I remember seeing him teach at one of those times, and he would literally do that.
He created this magical relationship in the class in which he was so fully vulnerable in which he said, you know, I'm not sure there'll be times in this class where I'm going to lose my chain of thought.
It's because I had a stroke.
And with that, it's almost as if he created a more magical class.
And we saw it last week when we heard the sad news.
There was this incredible outpouring of love on social media.
So many students. The number of students he touched is just unbelievable.
Yeah. And, you know, after he had a stroke, I think he started to reflect on his own life and actually used his theory of disruption to construct a whole set of other arguments and, you know, the measure of your own life and how you measure your life.
And in the end, he used to say the measure of your life is the people you touch.
Boy, did we learn this last week that if he measured his life by the same terms by which he asked others, he had an extraordinary life.
I have never in my life had more people reach out, not to celebrate Clay's genius, which, of course, they could have easily reached out to celebrate, but to celebrate his humanity and how in some deep, powerful way they were influenced by him.
It's been just almost extraordinary to see how he touched people as a human being.
Do you have a favorite personal story?
So, yet more recently, Clay was beginning to find it difficult to walk.
So once again, he very politely, as he always did, and I could never, ever get over the respect he showed to me.
He'd always called me Dean.
He never called me Nathan.
And even though, you know, we had a long relationship, he could have easily called me Nathan, but he never ever once.
So he asked for an appointment and he came to see me and he says, you know, I don't think I have the capacity to teach one class anymore, but would it be okay if I went in my wheelchair and spent as much time as I could in all the classes that are being taught of BSSE?
I let other faculty members teach the class, but I just want to be there for them and for the students so that if there's anything I can offer, I might be able to offer it.
I don't even know what to say.
I said, of course, Clay, anything you want to do, but remember, in the end, take care of your health and we all need you and don't overdo it.
And every day, you know where my office is.
My office actually, the window from my office, looks at the path through which people come to the school.
I would see Christine, his wife, pushing him on a wheelchair.
I come to work early.
Early in the morning, he would be at school.
And that devotion that he had and even his family had to help him continue to do his work, that image will forever stay with me, that it meant so much to him that he would come in a wheelchair and just to do nothing but to be present for the faculty members and the students who were teaching the class.
What a remarkable, remarkable person, what a remarkable life.
Thank you very much for this conversation.
That's it for this week.
We will be back with Yung Mi and Me here next week.
Thank you for listening.
