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5by5 | The Critical Path #36: An Interview with Clayton Christensen

Horace interviews his teacher Clay Christensen to discuss his new book, How Will You Measure Your Life. We discuss some of the concepts of learning, jobs to be done and approaches to self-disruption. We also cover what Clay is working on next in his writing and research. Lastly, we talk about what Apple should worry about in its disruptive journey.

via 5by5 | The Critical Path #36: An Interview with Clayton Christensen.

  • Ian Ollmann

    Next time you have Clay on, I suggest a 2 hr format. I wish there was more time for meat.

  • Aditya Jain

    When Clay suggested that Apple is not disrupting itself, what he meant was that it has not found itself in a position where its new product (which is eating its old product) offers a lower margin than old product. With iPad cannibalizing Mac sales, apple is still better off (in the sense of sustaining innovation) since iPads make more money.

    Although one should also consider distinction between improvement in absolute margin vs percent margin (my guess is that iPad Mac in latter).

    • http://www.asymco.com Horace Dediu

      The iPad is, for the time being, a higher margin product than the Mac. However it’s quite early days. The disruptive credentials of the iPad is not in dispute. The only question is whether it is aimed at the Mac or PCs in general. I think it’s very likely that there is cannibalization and market expansion with the product.

      • Sam doji

        Thanx Horace for engaging Clay to clarify what worries him about Apple because as an investor I always look new insights about the future of the company.

        What really strike me when I listened the exchange between Clay and you is how the iPad is a strange disruptive product when confronted to the definition of a new disruptive product. So my understanding is for Clay iPad does not fit to the classical sens of low quality low margin disruptive product according to the innovator’s dilemma theory. So for him, iPad by offering higher margin than macs it’s more an improvement of existing product rather than a new lower quality lower margin in accordance with the definition of the theory.

      • http://www.asymco.com Horace Dediu

        I think Clay believes that tablets are disruptive to PCs. What is unclear is whether iPad is disruptive to Apple (Computer). That would indicate an ability to introduce self-disruption. I believe Apple does have this ability.

  • http://twitter.com/ChristianPeel Christian Peel

    A few links for the uninitiated:

    Biography from Forbes: http://www.forbes.com/sites/davidwhelan/2011/02/23/the-survivor-part-1-clayton-christensen-a-life-in-health/
    Open source and disruption:  http://itc.conversationsnetwork.org/shows/detail135.html
    The article from which his “measure your life” book grew:  http://hbr.org/2010/07/how-will-you-measure-your-life/ar/1

    • Matthew Gunson

      The HBR article is one of the best things I have ever read.

  • Karthik Ramani

    Horace…I was expecting Clay to give an example that relates to the effect of Apple creating a category or product that is disruptive to Apple itself and not just disruptive just to the status quo around the industry. I understand his point that Apple like Sony in 50’s has created a string of products that are disruptive compared to the industry…is he talking about ways of doing business or entering into new areas totally unfamiliar to Apple (phones / music probably fall in that category –> hence iPhone and iPod)

    Can you please elaborate on his thought? What does he mean by “disruptive to Apple”

    Thanks!!

    • http://www.asymco.com Horace Dediu

      The iPad can be considered disruptive to Apple as it undermines the core value proposition of the Mac. It’s “not as good” and much cheaper. It should be seen by the Mac group as a poor substitute. And yet, given time it will get better and strip users away from the Mac. In so doing it should also grow the market by competing effectively with Mac “non-consumption” and thus bring Apple to a larger base of users. Clay’s point was that the iPad is not exhibiting the lower margins that usually accompany a low end product–the iPad’s margins are actually higher than the Mac’s. I contend that the iPad still may move into a mass market model where they do reduce margins in exchange for a far larger base.

  • capnbob67

    I thought Horace was quite gentle on Clay who was delving into waters well swum on this blog and covering issues addressed and resolved a long time ago. Horace will always offer more insight into Apple than someone who has nothing but a passing interest in the company or industry no matter how bbrilliant. I feel it would have been more valuable to direct the conversation more towards Clay’s more recent work or more about the application of ‘jobs to be done’ in real world situations, or basically anything except a regurgitation of basic Apple stuff.

    Horace, you are probably too humble to think that Clay is no help to you on Apple or Tech industry issues but in this area I (and probably most of your readers) would say that the student has surpassed the master. Now where’s the preorder button for the new book…

    • Matthew Gunson

      A couple things.

      I agree that Horace knows Apple better than Christensen. He clearly wasnt prepared to talk details. And they really didn’t spend that much time on Apple. They spent the first half of the interview talking more about themes from How Will You Measure Your Life. Which was entirely appropriate given next weeks release. But I think the reason that Horace engaged Clay on Apple was because they differ a bit on the subject and that makes for fascinating content. I think the integration/modularity issue is a point where perhaps the theory needs to advance a little, Christensen admitted that it is still in a nascent stage

      It was nice to hear Horace and Clay talk. They clearly have deep mutual respect which is refreshing in my opinion.

      • capnbob67

        I thoroughly enjoyed most of the pod cast. It was the modularity discussion (the old Mac vs. Windows argument) that I felt we were way past.

        As Horace and Clay said, without constructive criticism, it is hard to get better.

        I loved the stuff on learning and applying it to the enterprise. The point about people learning when they are ready not when you want to teach them was eye opening and is making me rethink my own management approach. It really points out the lie in “do as I say not as I do” kind of thinking.

  • NatRod

    Wow, that was embarrasing. Out of respect for your audience and Clay’s reputation, can you please not interview him “live” again? I am assuming his difficulties are the result of his health problems, but it was not a postive experience listinening to him wander into the weakest aspects of his theories: wrapping tautological statements in consultant-like lingo and religion. I assume Clay is now much better in print, or when his theories are filtered through a more rigorous voice. Horace, you are now older than Clay was when you first heard his theories. I think it is time for the baton to be passed.

  • http://twitter.com/Niilolainen Niilo

    Listened on way in to work this morning on my bike. Great stuff. Embarrassed by some of the uncivil comments above.

    Nice article:

    http://www.businessweek.com/articles/2012-05-03/clay-christensens-life-lessons#p1

     

  • poke

    I think the higher margins of the iPad vs. the Mac are due to Apple leveraging existing components and manufacturing capacity rather than Apple being conservative. If a new company had introduced the iPad, would they have Apple’s margins? Judging from the inability of competitors to field similar products at the same price point, the answer would appear to be no. There’s also the uncertainty involved with introducing a new product like the iPad. Apple might’ve had to move quickly to a lower price point. Despite that uncertainty they still went ahead with it. If the question is their institutional capacity for self-disruption, then surely you have to take into account how things might have reasonably turned out as well as how they did turn out.

    You could say the same about the iPod and iPhone too. Yes, the iPhone has higher margins than the iPod, but when Apple passed the point of no return on its commitment to developing the iPhone, did they really know the iPhone would be such a high-margin product vs. the iPod? The phone market was not a high-margin industry and they could not have anticipated the demand that has ultimately allowed them to dictate terms with the carriers. In the case of the iPhone they went with a very risky single-carrier strategy in order to get the terms they wanted and actually had to change the price soon after release and give a rebate.

  • tmconnolly

    My dad was a proud employee of IBM when I was young. He told me about this book written by one of the Watsons who was the CEO. The book was named something like “A Company and Its Culture.” The theme of the book, as my dad explained, was that within a company, a company culture will always develop. And unless a specific effort is made to define that culture, it will otherwise come to match the personality of the top person. This reminds me of the discussion between Horace and Clayton about a company learning when it’s not being taught. I’ve worked at both types of companies. My sense is that the organization will learn and a culture will develop, but a systematic, on-going effort is required if management wishes to determine that culture. Perhaps the same processes used by companies to create a culture can be used to define or change any aspect of the company.