Ackoff, Capitalism, capitalist, Christensen, dilemma, disruptive, Drucker, effectiveness, future, Innovation
“The Innovator’s Dilemma” catapulted Clayton Christensen to the world’s top echelon of innovation experts. He has been called for example the architect of and the world’s foremost authority on disruptive innovation. In the book that became his claim to fame he was first to describe the mechanisms that are behind disruptive innovation, the type of innovation that entranced players never see coming as they are unseated from their dominant market positions by new entrants. Christensen explained how the business world’s Davids can beat their Golliahs.
More recently Christensen upgraded his innovation insights to address a much loftier goal: the future of capitalism. To ensure continuity with his earlier work, he has framed this new-found and larger scope interest with an appropriate catch-phrase: “The Capitalist Dilemma”. In short he proposes that there are different flavors of innovation and that not all innovation creates jobs; in fact innovation can destroy jobs and thus make capitalism unsustainable.
Christensen proposes three innovation categories: empowering, sustaining, and efficiency. A short definition of these and their relationship to job creation and destruction follows (source: http://edition.cnn.com/2013/01/21/business/opinion-clayton-christensen):
“Empowering” innovations transform complicated, costly products that previously had been available only to a few people, into simpler, cheaper products available to many. Empowering innovations create jobs for people who build, distribute, sell and service these products.
“Sustaining” innovations replace old products with new. They have a zero-sum effect on jobs and capital.
“Efficiency” innovations reduce the cost of making and distributing existing products and services. Efficiency innovations almost always reduce the net number of jobs in an industry, allow the same amount of work (or more) to get done using fewer people.
Since the world’s elite are interested in both innovation and the future of capitalism, Christensen was one of the special guests at Davos, where he was asked to clarify his ideas on the fate of capitalism. While non-trivial to understand, his thesis is nonetheless simple to state: there are reasons to believe the world is putting too much emphasis on efficiency innovation, leaving capitalism at risk. Because of an erroneous finance doctrine, as more capital is freed by efficiency innovations, it is put right back into more efficiency innovations, compounding the job elimination effect.
More interestingly however, he started his argument with the need to define the right “categories” for any problem one might tackle, in this case innovation. He said that it took him a long time to arrive at the three innovation categories that finally fit the model for sustainable capitalism.
Now here’s my problem with Christensen categories, which I’ve appropriately termed “Christensen’s Category Dilemma”. But firstly, let me say that in general I absolutely agree with him that a prerequisite to an effective solution is framing the problem rightly, which in many cases means categorizing the problem’s constituent elements correctly. Ambiguity begets ambiguity. But the issue is that he is not acknowledging his predecessor and contemporary thinkers that have already defined similar categories 20-30-40 years ago. To his merit, Christensen applies existing categories to new contexts, resulting in novel insights. And he does so based on pure observation with apparently little a-priory knowledge of the existing related categories. This further reinforces the existing categories. And that in itself – a reconfirmation of existing categories based on observations in new contexts – is a powerful insight providing continuity of thought. And so, Christensen’s “efficiency” innovation category belongs for example to Peter Drucker’s more general “doing things right” category, and “empowering” innovation belongs to “doing the right things” respectively. Efficiency innovation is also traceable to Roger Martin’s “reliability” category, and empowering innovation to Martin’s “validity” category respectively. And the list can continue. Just to be clear, I am not suggesting plagiarism by any means. While Christensen’s categories can be traced to existing thinking, he is applying these to new phenomena resulting in new and unique insights. I am merely proposing that without the tractability to related existing thinking we those following his thinking are poorer when it comes to the larger context.
So the “category dilemma” is this: with fame and glory appears to come a mandate which carries a huge responsibility: that of framing knowledge, of raising the knowledge scaffolding on which others can build. Since success can have a self-reinforcing effect, gurus can find themselves on a pedestal that is largely beyond peer review and they often have the power to define their own categories. With that power also comes the responsibility to connect new knowledge to existing knowledge. That is because naming an existing category by a different name prevents access to potentially very useful insights already proven and tested in the past. In Professor John Gero’s words, “Ontologies provide a domain with a structure for the knowledge in that domain. Domains without ontologies are constantly inventing new terms for existing knowledge and find it difficult to develop foundations on which others can build.” And so, until Christensen and others of his statute acknowledge this implicit responsibility, the “category dilemma” will live on, and the world will make slower progress than it otherwise should.
The reader may have noticed that I did not debate or critique Christensen’s thesis; that is because I wholeheartedly agree with it. I can do so because I can relate Christensen’s thinking to principles that have been proven time and again, which can be traced to evolutionism, complexity, design, and systems thinking. So to me, Christensen’s thesis comes as a confirmation rather than a revelation. But Christensen has a responsibility to not assume that his audience at large can do the same. It’s not a matter of the facts, it’s a matter of the principles.