Distractions, reflections

David Ing, at large … Sometimes, my mind wanders

Disruptive innovation, product design vs. business model

Posted on February 06, 2006 by daviding

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.

1 to “Disruptive innovation, product design vs. business model”

  1. Larry Hiner says:

    Assume for the moment that human history can be divided into ages:

    In the Pre-modern Age, we assumed that all was governed by some force from afar – fate, the gods, whatever – and our responsibility was to discover the will of the force and to comply (to live happily) or to fight it (in cosmic struggle).

    The Modern Age brought science and humanism, resulting in commerce and invention.

    The Post-modern Age is upon us – turbulent, fast, living in a simultaneous multitude of cultures, expectations, desires, and draws. Individuation (and innovation as a repsonse) is pre-eminent.

    Arguably (according to philosophers, anyway) we are in the dawn of the Age of Irony, in which we learn to hold all of these conflicting, opposing values and trends in consciousness all at once.

    Given these assumed ages, then, B-school is a Modern phenomenon (and functioned very well there). MBA’s are provided a set of tools to measure, calculate, and arrive at a risk assessment to help predict outcomes. That works fine in a relatively stable environment; trouble is – we’ve picked up the pace since the 1970’s. Change happens much more quickly and in unpredictable directions. The tools of the MBA, then, are declining in utility (and that’s being kind).

    Sounds like the scenario is that B-schools need to change or die; and the latter appears to be the option of choice.

    If your son wants to get a degree in business (to follow in his Dad’s footsteps?), I suggest looking at a place like Berkeley, where they are designing programs to train Business Transofrmation Architects – a new role crossing the Consultant with the technology Architect to find new ways to help businesses incorporate technology to generate business change. Check out the curricula – are they teaching the same old B-school stuff, or skills to accommodate the post-modern (and perhaps even the ironic) world?

    Whatever you or he decides now, do not fret too much. It is speculated that today’s graduates will change careers (not just jobs, but careers) at least 5 times over their professional lives.

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