How and why disruption “provides an explanation of creative creation
Frankly, I was unable to fully understand (much less appreciate) the significance of what Joseph A. Schumpeter shares in his masterwork, Capitalism, Socialism and Democracy, when I first read it in 1975. Only much later, after several re-readings, have I begun to “get it” in terms of what “creative destruction” is and isn’t. I mention all this by way of introducing my gratitude to Michael E. Raynor for what I have learned from him in The Innovator’s Manifesto as well as from books written or co-authored by Clayton Christensen, who wrote the Foreword to this book. For me, one of the most valuable “lessons” is that “creative destruction” is the means and “creative creation” is the ultimate objective. Whereas Charles Darwin explains evolution as a process of natural adaptation and elimination, what Raynor examines in this book are deliberate efforts to survive and then thrive. He asserts, and I agree, that “deliberate disruption” is the key to “transformational growth” by both individuals and organizations.
As he explains, “The first objective of this book is to demonstrate that Disruption has true predictive power…Second, I will make the case for Disruption’s unique and superior explanatory power…Finally, I will offer some thoughts on how one can go about applying these concepts to greatest effect at the least expense.” Raynor carefully organizes and then presents his material as follows:
In Part I: Prediction (Chapters 1-2), Raynor describes the design and results of carefully controlled experiments testing “the predictive power of Disruption’s central claims” while explaining why, for a theory that seeks our allegiance, “there must be evidence that it improves our ability to predict future outcomes.”
In Part II: Explanation (In Chapters 3-5), he makes the case for “generalizing beyond the experimental sample and suggests that Disruption can be used to do more than merely `pick a winner,’” although that is obviously a substantial benefit.
And in Part III: Application (Chapters 6-8), he discusses how and why non-Disruptive innovations can succeed and some revolutionize an industry; then in the final chapter, takes a process perspective on the application of Disruption. By now, Raynor has made a compelling case for the unique power of deliberate Disruption, explaining how it fully utilizes creative destruction to achieve creative creation, “the how, if, when, and how long of the kinds of innovations that have repeatedly remade the economic landscape in the service of the general weal.”
Wednesday, November 2, 2011 Posted by Bob Morris | Bob's blog entries | "creative destruction" is the means and "creative creation" is the ultimate objective, "deliberate disruption" is the key to "transformational growth" by both individuals and organizations, Capitalism [comma] Socialism and Democracy, Charles Darwin explains evolution as a process of natural adaptation and elimination, Clayton Christensen, Crown Business, How and why disruption "provides an explanation of creative creation, Joseph A. Schumpeter, Michael Raynor, The Innovator's Manifesto: Deliberate Disruption for Transformational Growth | Leave a Comment
Michael E. Raynor, Director, Deloitte Consulting LLP, provides consulting services to senior executives in the world’s leading corporations across a wide range of industries. In his client projects and research, Michael explores the challenges of corporate strategy, innovation and growth. However, as he once observed, ”Case studies of past results are a weak foundation for predicting future outcomes. And the increasingly popular ‘fail fast to learn soon’ approach to innovation can work, but is also unnecessarily wasteful.” His first book, The Innovator’s Solution, coauthored with Professor Clayton M. Christensen, has been on The Wall Street Journal and The New York Times bestseller lists, and won several “best book of the year” awards in 2003. His second book, The Strategy Paradox, was released by Currency/Doubleday in February 2007. In 2007, strategy+business magazine named it one of its top five picks in strategy, and BusinessWeek named The Strategy Paradox one of 2007′s 10 Best Business Books.
His third book, The Innovator’s Manifesto published by Crown Business (2011), is now available and has already garnered much attention from the media. In addition, Michael has published extensively in managerial and academic journals and has taught in the MBA and Executive Education programs at the Richard Ivey School of Business at the University of Western Ontario in London, Canada, and at the IMD Business School in Lausanne, Switzerland. Michael has a doctorate from the Harvard Business School, a master’s degree in business administration from the Ivey School of Business, and an undergraduate degree in philosophy from Harvard University. He lives in Mississauga, Ontario, Canada.
Here is an excerpt. To read the complete interview, please click here.
* * *
Morris: Before discussing any of your books, a few general questions. First, throughout your life thus far, who has had the greatest influence on your personal growth? Please explain.
Raynor: Like many other people, I had a number of teachers early and life and, luckily, throughout my educational career who took and interest in my work and encouraged me to follow what was most interesting to me. I can go all the way back to Grade 7 and Grenville Bray in small-town Ontario, through to John Aimers in high school, Alan Sidelle as an undergraduate, Don LeCraw as a graduate student, and Tom Eisenmann as a Doctoral candidate. Each step along the way these people have broadened my horizons and taught me important lessons about the world and about myself. I’m grateful for your question, as this is the first time all those folks have been mentioned in one place.
Morris: Greatest impact on your professional development?
Raynor: I think without question my collaboration with Clayton Christensen has been a defining element of my career. The opportunity to understand deeply and assist in the development of a critically important set of ideas on innovation has been a real privilege.
Morris: Was there a turning point (if not an epiphany) years ago that you set you on the career course that you continue to follow?
Raynor: I guess I’d have to say the realization that my longtime plan to go to law school was simply a default setting. Moving into business after my undergraduate degree was an unexpected turn, but it was, for someone with my experience, the “road less traveled”, and as Robert Frost put it, “…that has made all the difference.”
Morris: To what extent has your formal education proven invaluable to what you have accomplished thus far?
Raynor: It would be difficult to overstate the importance of my formal training. In my research and writing I try to apply the scientific method as rigorously as I can; my model has long been Stephen J. Gould, the late Harvard professor and paleontologist. His mantra was “no compromises”, and I’ve done my best to adhere to that, while still trying to be accessible and practical. That’s an especially tough circle to square, but it is a goal that fires my imagination. And it is one that would be, literally, unimaginable without the extent and nature of the schooling I’ve received.
Morris: In recent years, there has been severe criticism of M.B.A. programs, even those offered by the most prestigious business schools. In your opinion, what is the single area in which there is the greatest need for immediate improvement? Any suggestions?
Raynor: For me, it’s the ability to think critically and clearly about the nature of the arguments being made and the evidence adduced in business schools and, more importantly, in the popular management books – of which there are many! The key is not necessarily logical thinking: very few serious thinkers make elemental errors of logic when connecting a premise to a conclusion. Rather, deeper questions such as the rules of evidence, the meaning of probabilistic claims, and need to accept the incompleteness of our data the insufficiency of the advice we can offer – yet still act – often go unexamined. Something as relatively straight-forward as distinguishing between “explanation” and “prediction” is almost always overlooked, yet it is fundamental to the nature of research and prescriptions for action. If students understood more deeply these issues I think the marketplace for ideas would quickly become much more efficient, and the signal-to-noise ratio would improve dramatically.
Morris: To what extent (if any) are the challenges that your clients face now significantly different from those of (let’s say) 3-5 years ago?
Raynor: I don’t think the basic issues ever really change. For me, the four fundamental issues are (1) Innovation (2) Growth (3) Performance and (4) Uncertainty. Those categories are not necessarily mutually exclusive or collectively exhaustive, but they have for me been a very helpful organizing framework. How one addresses these questions might change in important ways depending on such contingencies as whether the global economy is in recession or not, but true theories for each of these will have within them the ingredients required to deal with transitory exigencies. Keeping one’s eye on the evergreen questions is part of not getting misled or even duped by fads and fancies.
Morris: In your opinion, what will be the single greatest challenge that CEOs will face during (let’s say) the next 3-5 years? Any advice?
Raynor: My best estimate is that it will be one of the four identified above – and getting the leadership agenda “right” will mean having the right level of emphasis on each. I’m willing to bet innovation and growth will be first and second priorities, but I’m not prepared to say which is which.
Morris: Please explain the relevance of Joseph Schumpeter’s concept of “creative destruction” to the modern business world.
Raynor: Economist Joseph Schumpeter’s signal contribution to economics was to put innovation at the core of economic development. He saw beyond the field’s obsession with marginal cost analysis and price-based competition, understanding that this fixation was merely a function of the ability to model such features of the landscape cleanly, with little regard for their ultimately secondary, and perhaps even trivial, role in shaping competition among firms. In Schumpeter’s words:
“[I]n capitalist reality as distinguished from its textbook picture, it is not [price] competition which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization…– competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives.” [i]
Schumpeter memorably labeled the outcome of this type of competition “creative destruction,” a term that has become for many synonymous with innovation.
* * *
To read the complete interview, please click here.
Michael Raynor cordially invites you to check out the resources at this website: www.michaelraynor.com
[i] Schumpeter, Joseph A. (1942). Capitalism, Socialism and Democracy. This quotation from pp.84-86 of the Harper Colophon edition of 1975.
Friday, September 30, 2011 Posted by Bob Morris | Bob's blog entries | BusinessWeek, Capitalism [comma] Socialism and Democracy, Clayton M. Christensen, Currency/Doubleday strategy+business magazine, Deloitte Consulting LLP, Harper Colophon, Harvard University, Joseph Schumpeter, Michael E. Raynor, Richard Ivey School of Business at the University of Western Ontario IMD Business School Harvard Business School, Robert Frost, Stephen J. Gould, The Innovator's Manifesto, The Innovator's Solution, The New York Times The Strategy Paradox, the Wall-Street Journal | Leave a Comment
Next LIVE Event
- First Friday Book Synopsis in DallasJune 7th, 201319 days to go.
- Blogging on Business Update from Bob Morris (Week of 5/13/13)
- Does it matter where you went to school?
- Predictive Analytics: A book review by Bob Morris
- HBR’s 10 Must Reads on Strategic Marketing
- Amy Jen Su and Muriel Maignan Wilkins: An interview by Bob Morris
- Some of My Best Friends are Black by Tanner Colby — Here are my 11 Observations
- Randy Mayeux on Our Wonderful (and at times Exhausting) Custom Nation
- Randy Mayeux on Our Wonderful (and at times Exhausting) Custom Nation
- I am at Richland College today with my ESL class. It meets for 3 hours on T and TH. 1 month ago
- On Tuesday, March 12, I will speak to the Cedar Hill Lions Club about the biography CRONKITE by Douglas Brinkley at 11:30 a.m. 2 months ago
- I just taught the Tom Steely class at FUMC-Garland. Very good people - lots of fun! Join us next Sunday morning. 2 months ago
- The FFBS program on 3/1 features me with the best-seller CONSCIOUS CAPITALISM. Register now - (972) 980-0383. 2 months ago
- My Research Methods course in the MBA UDallas program resumes on Saturday 3/2. I look forward to this! 2 months ago
- If you think top executives have to have charisma, think again. bobmorris.biz/if-you-think-t… 9 hours ago
- Blogging on Business Update from Bob Morris (Week of 5/13/13) bobmorris.biz/blogging-on-bu… 9 hours ago
- HBR’s 10 Must Reads on Strategic Marketing: A book review by Bob Morris bobmorris.biz/hbrs-10-must-r… 1 day ago
- You wanna see work ethic? - watch a special 1 yr. old work to defeat the onslaught of sleep- really needing to sleep! - at nap time... 2 hours ago
- Blogging on Business Update from Bob Morris (Week of 5/13/13) wp.me/pmm68-7Bj via @wordpressdotcom 6 hours ago
- Business Longreads for the week of May 18, 2013. thebea.st/10MsN97 via @thedailybeast 10 hours ago
Recent visitor count
- 671,511 visits
- Site created and maintained by Dallas website design company bigDwebsites.com