The Cult of Disruption

The Cult of Disruption

The technology sector is obsessed with the concept of disruption.  As originally laid in Clayton Christensen’s 2011 book “The Innovator’s Dilemma”, the idea of disruption is fairly simple.  Businesses find an underserved part of the market, build a product which fills the void, and fly below the radar until they gain enough critical mass to upend established players.

Since the appearance of Christensen’s book, the concept and application of disruption has metastasized.  Disruption is no longer merely a strategy businesses pursue – it has become an ideology in and of itself.  In the beginning, disruption was about changing the market and making a profit.  Successful innovation meant displacing establishment businesses – or eventually becoming one. It was an entry strategy, designed for single use.

Now, disruption is about “changing the world” through a continuous cycle of innovation.  Dominating the market is no longer enough.  Disruption is something that companies want to keep doing, even if that entails near-continual turbulence in their business model.  In other words, disruption has become an end in itself – not dissimilar from the communist idea of permanent revolution.

But does continual disruption as a business strategy work?  It’s still a bit early to draw conclusions, but case studies are starting to emerge.

An early example of disruption gone wrong is Netflix, which tried to preemptively spin off its traditional DVD business so it could concentrate on the more “disruptive” potential of streaming.  (Remember Qwikster?)  Following a mass exodus of customers and a popular uproar, the plans were quickly scrapped.

CEO Reed Hasting’s comment on the debacle was telling:  “There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”  In other words, we’ll still be disruptive, just not as disruptive as we’d like to be.  From a long term business perspective, Netflix was probably right – streaming is the wave of the future, and the DVD business is going to fade away.  But there’s a fine line between disruption and alienation.

Now we have Alphabet, a holding company which allows Google’s founders to pursue innovation without damaging the company’s core business.  This is a different, perhaps more cautious model of disruption (if that’s not a contradiction in terms). Unlike Netflix, Google decided to pursue potentially disruptive businesses on the side.  It isn’t quite ready to sacrifice its enormously profitable product on the altar of disruption.  So far, investors and the general public have embraced the move, which mixes sensible caution with a capacity for risk-taking.

What does the future of disruption hold?  More than most business concepts, it seems likely to be a passing fad.  Innovation can be a very good thing, but turbulence in a business brings costs of its own – costs which may not be fully appreciated by those who pursue disruption heedlessly.  There may also be a limit to innovation in certain businesses and markets – when you create the perfect product, you should just leave it alone and let the profits roll in.  (Cue the mousetrap analogy.)

Maybe all of this is to say that disruption may be ripe for, well…disruption.