Monday, July 09, 2007

Disruptive Change

Clayton M. Christensen, author of The Innovator's Dilemma, along with Michael Overdorf, wrote a paper in 2000 about why companies succeed or fail at disruptive innovation. They argue that established companies by definition can't do disruption - the processes and values of the organization keep them on a track of evolutionary changes, which Christensen calls sustaining innovation. The idea is that the very things that make a company successful are at odds with creating a disruptive innovation. The combination of values and process determine what decisions will be made in the organization, at every level. They point out that a key metric to good management is whether distributed decision making can be made consistently with the strategic direction and business model of the company. That behavior is what makes up the value system -- the answer to why we do it this way; the processes are how we do it. To be disruptively innovative, why and how have to be free to move.

They show a simple 2x2 table which indicates various ways of separating innovative work so that it is most likely to succeed, with value and process change as the axes. Where there is little change to either, go ahead and keep the formal team together. All other changes they recommend factoring the team out for success, so that it can break free from the constraint.

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