Distractions, reflections

David Ing, at large … Sometimes, my mind wanders

Disruptive innovation, product design vs. business model

I was listening to Clayton Christensen’s talk at the Open Source Business Conference 2004 posted at IT Conversations. I was pretty impressed by the way he spoke. Slowly and clearly, as I could imagine him in a classroom. This talk was given after the release of his second book, The Innovator’s Solution, and referred to his first book, The Innovator’s Dilemma.

In this talk, I learned two things that I hadn’t known before.

  1. Right after publishing the first book, focusing on disruptive innovations of product performance, he was visiting Intel. Andy Grove heard what Christensen had to say, and suggested that it wasn’t about disruptive innovations in product development, but disruptive innovation about business models. Christensen said that he wished he had said that in the first book.
  2. Although we may think that disruptive innovation is a problem in business, Christensen states that the same thing is happening in business schools. Both Harvard and Stanford are facing that they’re doing a better and better job at a smaller market, and their prices are going up. Meanwhile potential students are getting similar content at conferences — such as the OSBC session — or even for free, i.e. the podcast!

I’ve generally been disappointed at the output from business schools — I graduated from a top American school, and still am active in academic circles — because I don’t think that the content has changed much since I was a student in the 1980s. The fees have gone up a lot — although I admit that the starting salaries have gone up, too — but these gaps are unsustainable, particularly when compared to what a business professional makes in India or China.

My eldest son (Adam) is 18 years old. My second son (Eric) is 16 years old. Both have asked me about doing degrees in business. I’ve been discouraging them from this path.

Eric, in Grade 11, asked me for some help with his homework from high school. It was a course in marketing. He was asking about the 4 P’s. I told him that he was asking the same questions that I used to get from MBA students, who had already done four years of undergraduate training. This is a signal.

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