Eric Rauchway at Crooked Timber has a post about Jill Lepore’s takedown of the idea of disruption, popularized by Clayton Christenson. I’d clicked through to the article, from different places, a handful of times, without ever finishing it, but it’s worth reading. This article, recommended by Phil Edwards, is interesting, especially if you follow its embedded links, but has a different emphasis. As Rauchway notes, Lepore presents two arguments: one, that “disruption” has become a buzzword that’s being applied in too many places where it’s actually irrelevant, and another, that the concept of disruption is flawed on its own terms.
Lepore’s essay is good, but I’m not convinced by her attempt to refute Christenson’s work. Her argument depends on finding logical flaws and flaws in interpreting sources, without attempting to really grapple with the argument itself. She takes Christenson’s writing on its own, without taking account of what it’s actually trying to do and the other work it’s responding to. Business research can be frustrating and follows its own rules for sourcing—I’ve seen scholarly books that, where you might expect to find a primary source, you find a series of hyped-up articles from business weeklies instead—but before criticizing that research, it seems like it would be worthwhile to try to understand what it’s trying to do.
A big part of Lepore’s argument is that Christenson repeatedly identifies firms as having failed, when Lepore’s research shows easily that they had not. I think there’s a disagreement on definitions here, and that what Christenson might mean by “failure” is different from what Lepore has in mind. Here are a few thoughts on that:
It’s not about the firm, it’s about the market. Lepore’s article focuses almost entirely on individual companies and on revenue numbers. If a company’s still around, and the top line (sales) is still good money, the company must be doing well. She says very little about what those companies are selling and whom to. I’d guess Christenson’s research is focused, instead, on markets, and intended to explain something about markets and firms’ relationships to them, not simply sheer existence or absolute size within the economy as a whole. That may be why he says firms had already failed by a given year, when as Lepore points out, anyone can see they were around for years afterward.
It’s not about absolute revenues, it’s about market share. Increasingly, business people and researchers think not in terms of absolute sales numbers, but of how many units of a given type are sold by any one company. I’d guess that Christenson talks about companies being on a downward slope to final failure, when Lepore can find that the firm is still getting perfectly respectable revenues, the proportion of sales from things like support and parts for old products, or products that are peripheral to the company’s major line of business. If they dropped from first to third place in their primary business, that’s a big deal, whether the bottom line is dropping slowly or quickly.
It’s not about playing the game, it’s about being number one. These days, in certain circles, company that’s in third place is considered a loser. It may make a profit, but it’s not anticipated that it will be able to do so. It will be expected to do everything it can to move up in the rankings, and the actions it’ll need to take, such as cutting prices, will cut into its profits. This is partly the winner-take-all attitude that pervades the world today, but it’s not entirely a myth either. The company in first place can market itself just on the basis that it is in first place. There’s a good chance that the company in last place will drop out of the market eventually. It’s likely that the public will only be able to keep the names of two or three firms in a given field in mind at the same time. This is about stock price, too, of course, because investors will prefer to buy into the more successful firm.
It’s not about playing the game, it’s about being the quarterback. Some markets are more prestigious than others. U.S. Steel used to be one of the most important firms in the world. Now its place has been supplanted. It still exists, and it still makes money, but it doesn’t play the role it once did. Similarly, no matter what Yahoo! does in the future, no matter what new market it finds for itself, it will always be the company that lost search to Google in the most embarrassing way; and the idea of search has acquired a cultural significance that makes Yahoo!’s loss mean something. Those guys are still in the game, but they’re not in the big leagues anymore: they’re third- or fourth string. They’re Dennis Quaid in Any Given Sunday, with some lingering honor from their glory days, but they won’t play unless they get an illegitimate boost of steroids.
One other thing is worth keeping in mind: a company’s existence, and even its revenues, imply nothing about its payroll. The company may still exist, but they may have laid off lots of people, and it’s likely that the jobs lost were better than the jobs retained. Lepore seems, here, to be extrapolating a bit too much from her experience as an administrative temp at a very narrow range of bankrupt companies. Those companies had gotten rid of so many people from their core business that there was no one left to do the mop-up work. But even so, they could theoretically have had high revenue numbers—for instance, if what they were doing—say, collecting patent royalties—didn’t require a lot of workers hanging around.
So, although Lepore makes some reasonable points about the limitations of “disruption” as a concept, and about the unclear ways it’s often used—she may even demonstrate that “disruption” is less a scientific concept than a mere way of talking that reflects people’s feelings about the economy and its upward or downward trajectory—I don’t think her criticisms are wholly damning.
Another point she raises is that Christenson holds that when there’s disruption, good management results in failure. Lepore interprets this as “disruption means people ought to act badly,” and condemns the ideology of disruption as an excuse for unethical behavior. (Erich Rauchway notes this part of the argument when he calls for more emphasis on the public good.) I think this is a misunderstanding. She would have a better point if she’d instead argued that it’s nonsensical, because how can good management lead to a management failure? But to call one event nonsensical or absurd might make sense—to label as nonsensical or impossible things that keep happening, over and over again, is itself nonsensical. Rather, it seems to me, “good management results in failure” means something more like “what you would have believed, for good reasons, would have been the best thing to do, turns out to have had results you didn’t want: results you would have avoided if you’d been able to predict the results.”
Perhaps disruption is a symptom of a cultural need to modify our beliefs about what’s possible and what’s not. Lepore suggests that she understands this, but she seems to label the modification of beliefs as itself pathological. This doesn’t convince me. Modifying or abandoning some minor beliefs, about the way the world is, or about what’s most important at any given time, doesn’t amount to abandoning all principles or becoming totally “ruthless.” Modifying one principle doesn’t set up a domino effect that’ll result in a total loss of all belief, either. And it’s possible that the kinds of mind-changing Christenson and other business writers have in mind aren’t quite as deep as Lepore seems to feel they are. Here, a greater willingness to see business writing the way insiders do—whether or not a given business researcher has successfully explained his conceptual scheme, in his text, so that an outsider can understand it—might have helped her avoid some overstatement that could limit the essay’s appeal for part of its potential audience.