Tag Archives: clayton chirstensen

Savvy Saturday August 6th, 2016

The worst place to develop a new business model is from within your existing business model. – Clayton Christensen

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Disruption Defined

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Like “innovation”, “disruption” is becoming a buzzword – losing the real meaning behind the original theory made famous by Clayton Christensen.

I came across an incredibly clear explanation of disruption provided by the New York Times (it’s actually from an innovation report that was leaked last week). You can read it here (Page 16). I was drawn to this description through Ezra Klein’s piece entitled “Read the New York Times’ insanely clear explanation of disruption

The key points:
1) The original disruption theory comes from Clayton Christensen’s study of things like the hard drive and steel industries where he realized that disruptive products tend to combine new technologies, cheaper production, and — crucially — worse products.
2) Poor quality and low profit margins of the new product prevent the incumbent business from recognizing the threat. (Also relates to Chris Dixon’s Good Ideas look like Bad Ideas see it here).
3) As the competitors experiment with the new production technologies they become better able to produce high-quality, high-profit products than the incumbents, and they eventually move up the value chain and disrupt the incumbent’s core business.

EMC

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