The world’s foremost authority on disruptive innovation, Professor Clayton M. Christensen talks about unforeseen, unaccountable failures that face companies that are at the very top of their game. I believe Prof. Christensen’s ideas are slightly outdated in the 21st century as the world economy progresses with internet conglomerates firmly in the driver’s seat, viz. Google, Amazon, Apple, Microsoft, Facebook etc. For starters, ‘The Innovator’s Dilemma’ was published in 1997, at the very cusp of this revolution
But why does this theory not apply to the internet giants of today?
In a strict sense, I think the people running these companies embraced the ideas in The Innovator’s Dilemma by being innately, perpetually disruptive instead of succumbing to oncoming disruption. This can be evidenced by invalidating the principles of disruptive innovation that Prof. Christensen talks about, referring to one these companies (Google)-
Companies depend on Customers and Investors for Resources –
‘Google is on every neighborhood on the internet, in many ways it is the neighborhood’ says Dietrich Vollrath, in his NYTimes article on Google’s market power. He goes on to say that Google is so pervasive in our lives through the internet, that they do not need to exercise caution in terms of Customer/Investor whims, which Christensen says is detrimental to being disruption ready.
Small Markets Don’t Solve the Growth Needs of Large Companies –
Christensen talks about big companies needing to match growth numbers proportionate to their size. But I believe Christensen was talking about an era where Mergers and Acquisitions weren’t a common business feature. Google lives by M&As, acquiring scores of small companies being disruptive in their fields invalidating this cause of worry and adding to Google’s disruptive steamroller brand image.
Markets that Don’t exist Can’t be Analyzed –
Market research and planning, Christensen says, are hallmarks of good management. Again, I believe this applies to legacy firms which functioned very differently from Google. Google creates new markets, and is more growth and innovation oriented than on quarterly profits, making market analysis less important than it is for regular companies.
An Organizations Capabilities Define its Disabilities –
Google has grown from being a search engine running on a university server to a global behemoth generating ~66bn annually (as of 2015), constantly dabbling into uncharted territory. This has happened with values that are unorthodox, to say the least. When the company incentivizes disruption primarily, very little in terms of capabilities can have adverse effects on the company.
Technology Supply May Not Equal Market Demand –
Market demand follows supply in the economics involving this company, as opposed to the other way around. The vacuums at the lower price points are annulled by M&As and extensive spin-off research. There is no requirement of trend capturing to gauge demand when a market leader insists on disruption.
To conclude, Christensen’s ideas do not necessarily apply to present day internet biggies that are ‘Too Big to Fail’. In other words, is there any disruption too big to make these companies fail?
Time will tell.
The New York Times Company - https://www.nytimes.com/roomfordebate/2016/04/28/is-google-a-harmful-monopoly/theres-no-limit-to-googles-market-power
Google is the Internet, Too Big to Fail - Frugaling -Dogotek Says-Bette says-Sam says-Syed says-Rajkumar says - http://frugaling.org/google-is-the-internet/
Google, Alphabet and the Era of Internet Conglomerates » Skarpline -https://skarpline.com/next-level/google-alphabet-and-the-era-of-internet-conglomerates/