Disruptive Innovation

Knowledge Center


Impact of new technologies (revolutionary change) on a firm's existence. Explanation of Disruptive Innovation of Clayton Christensen. ('97)

Contributed by: Neusa Hirota



Clayton Christensen disruptive innovation

What is Disruptive Innovation? Description

The Disruptive Innovation model from Clayton Christensen is a theory that can be used for describing the impact of new technologies (revolutionary change) on a firm's existence. Clayton Christensen first coined the phrase "disruptive technologies" in 1997, in his book "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail".
He showed that time and again almost all the organizations that have "died" or been displaced from their industries (because of a new paradigm of customer offering) could see the disruption coming, but did nothing until it was too late.

By doing what good companies are supposed to do - cater to their most profitable customers and focus investments where profit margins are most attractive - established industry leaders are on a path of Sustaining Innovations and leave themselves open for disruptive technologies to bury them. This happens because the resource allocation processes of established companies are designed to maximize profits through sustaining innovations, which essentially involve designing better and better mousetraps for existing customers or proven market segments. When Disruptive Innovations (typically cheaper, simpler to use versions of existing products that target low-end or entirely new customers) emerge, established companies are paralyzed. They are almost always motivated to go up-market rather than to defend these new or low-end markets, and ultimately the disruptive innovation improves, steals more market share, and replaces the reigning product.

Types of Innovation

Companies have two basic options when they seek to build new-growth businesses. They can try to take an existing market from an entrenched competitor with sustaining innovations. Or they can try to take on a competitor with Disruptive Innovations that either create new markets or take root among an incumbent's worst customers.

There are two distinct types of Disruptive Innovations. The first type creates a new market by targeting non-consumers. The second competes in the low end of an established market.

Origin of the Disruptive Innovation model. History

Christensen's research and studies at Harvard.

Usage of the Disruptive Innovation method. Applications

  • All kinds of companies - as they can be impacted by technology innovation/change.

Steps in Disruptive Innovation. Process

  • The model shows that, as the performance demanded by the customers of an existing market increases over time, so does the performance provided within a technological paradigm. Often the performance improvement provided has a different trajectory to the trajectory of performance improvement demanded by the customers (see figure). When the trajectory slopes differ, and the performance provided exceeds performance demanded, new technologies that were only performance competitive in remote market niches may migrate into other customer networks. This provides innovators with a vehicle to new customers, who would have previously viewed their offerings as substandard; and enables them to offer established mainstream markets a new set of performance value attributes that are now more relevant than the current paradigm.
  • Disruption and commoditization actually go hand in hand. A company that overshoots, simply can't win (a firm that improves a product to the point that it is more than good enough for customers to use and pay a premium for). Either disruption will steal its markets, or commoditization will steal its profits. While new waves of disruption wash over an industry, the place where the money will be will shift across the value chain over time. While this happens, companies that position themselves at a spot in the value chain where performance is not yet good enough will capture the profit.

Limitations of Disruptive Innovation. Disadvantages

  • Disruptive Innovation requires a separate strategy process. This process must be emergent and focused on unanticipated opportunities, problems and successes, rather than intended and focused on improved understanding of what works and what doesn't.
  • Instead of designing products and services that address current behavior of current customers, the underlying aims of people should inform the design of innovations. Understanding what people really need is however far from easy.
  • Disruptive businesses can't achieve big profits very fast, due to their nature (addressing new markets, or addressing low end of existing markets). Venture capitalists are increasingly impatient for businesses to deliver profits.

Assumptions of Disruptive Innovation. Conditions

Companies risk death with decisions to ignore technologies that do not appear to address their customers' needs, as they become fatal when two paradigmatic trajectories of progress interact.

Book: Clayton M. Christensen - The Innovator's Dilemma -

Book: Clayton M. Christensen - The Innovator's Solution -

Book: Clayton M. Christensen - Seeing What's Next  -

Disruptive Innovation Special Interest Group

Special Interest Group (420 members)

Disruptive Innovation Forum  

Recent topics

  Disruptive Innovation: Product versus Platform
DISRUPTIVE PLATFORMS often have a bigger impact than disruptive products. Some examples:
  • Uber owns no vehicle, but is now the ...
  Diversity of Perspective is Key to Disruptive Innovation
“All new ideas are combinations of old ideas, but not all idea combinations are created equal,” writes Frans Johannsen.

An HBR article by J...
  Timing is Important to Make an Innovative Idea Disruptive
America had to be discovered more than once, until it really had been discovered. The Apple Newton was a superior answer to a question that people did...
  The Resources-Processes-Values (RPV) Framework
The resources-processes-values (RPV) framework is a useful tool to understand why big companies fail in responding to disruption:
  • RES...

Best Practices - Disruptive Innovation
  Innovation Strategy: The Three Horizons of Growth (McKinsey)
One of ways of thinking about innovation strategy is to use the 3 Horizons of Growth developed by Steve Coley at McKinsey.
The framework ...
  Disruptive versus Incremental Innovation
Typically, Incremental Innovation exploits existing forms or technologies... Improves upon something that already exists or reconfigures an exi...
  Strategic Options for Old-Technology Firms
What should be the strategic response of old-technology firms when a promising new technology shows up? Typically firms respond by either
  The Jobs to be Done Approach (JTBD) and Disruptive Innovation
The theory of disruptive innovation helps companies navigate threats coming from their external environment. However, it fails to expl...
  Tips for Innovation Strategy
As a part of corporate success factor development process, we have found a need to build up an "Innovation Strategy". Can anybody give good hints or e...

All you need to know about management

  Impact of the New Technology
Our countries are not concerned by this issue because not developed. We are only getting negative impacts due to this technology development.
  Typical Disruptive Technologies
It is important that business and policy leaders understand which technologies might matter to them and prepare accordingly. But which technologies co...
  How to Develop Disruptive Innovation Skills?
I believe disruptive innovation skills can be mostly taught.
Beyond the associative skills which is cognitive, the other behavioral skills...
  Disruptive Change and HR
Innovation is necessary and mandatory for a firm to be competitive in the current operating business environment. However, when introducing new ideas...
  How to Find Innovative Ideas? From Analogous Markets...
When trying to find innovative ideas for your organization, several studies have revealed that it is highly valuable to access expertise from outside ...
  How to Sustain Disruptive Innovation?
After gaining entry into some (new) market segment through disruptive innovation, how do you SUSTAIN your position and growth...
Does that requir...
  Leadership and Taking Action
Don't forget the important point of taking action after all the theorising! Sometimes I think it's more down to the leadership of the company.
  WHAT is Being Innovated? The 4 Ps of Innovation
There are actually 4 things or objects that one can innovate:
  Asymmetric Innovation
Asymmetric Innovation = Asymmetric Situation + Customer Value.
Asymmetric Situation is a resulting none-direct-competitive situation in favor of ...
  Disruptive Innovation or Improved Technology?
Disruptive innovation is only a means of improving existing products as it creates new, better and unexpected sets of values of products. Every modern...
  Ways to Incorporate Disruptive Innovation as Part of the Management Agenda
A few days ago I was in a conversation with Adam Hartung, who observed brand managers are constrained, as a matter of practicality, to focusing exclus...
  The Hybrid Innovation Approach to Manage Technological Disruptions
Companies need to carefully think about the timing and way to adopt technological disruptions. Adopting technological disruption too late can squander...
  Business Model Innovation
Dear all fans of Clay!
IPTV is probably and most likely a disruptive technology, but more important, is it feasible to follow a disruptive strate...
  Is Cirque du Soleil the iPhone or the Seiko of Circus?
An article about the Cirque du S...
  Disruptive Innovation and Public Sector Organisations
This model appears to describe the potential life cycle of a firm in market economies where profit maximisation is the goal. If public good is the goa...
  Comparison Disruptive Innovation versus Blue Ocean Strategy
Is Disruptive Innovation a liitle more detail of Blue Ocean Strategy??
If not whats the difference between the two?...
  Paradigmatic Changes Require Re-orientation of Ones World Views
So often there are changes which are semantic. My view is that paradigmatic changes require re-orientation of ones world views. That is very ambitio...
  Is Value Innovation Disruptive Innovation?
Should value innovation, the corner stone of Blue Ocean Strategy be conside...
  Leadership Skills / Approaches for Successful Innovation
Innovation leadership requires other approaches than general leadership for the core business. Furr and Dyer (2014) outline some unique lead...
  Disruptive Innovation: What Causes the Creative Leap?
What causes the difference in magnitude of creative leap? One may create a quantum leap, but other innovations may not be that significant. Is ther...
  The Word 'Disruptive' in Disruptive Innovation
I wonder if the term 'disruptive' is in fact the appropriate word.
If it's agreed that it means: unexpected, large scale, sudden, different appro...
  Better Input from Consumers Needed for Disruptive Innovation
Technological innovations bring positivity, a better quality of life. But have they considered those without access to normal technology, to achieve c...
  What is Disruptive Innovation Exactly? Definition
A "definition" of Disruptive Innovation that's frequently quoted is one which is located on Christensen's website. It reads:
  Are Clayton Christensen’s Disruptive Innovation Characteristics Useful in Practice?
A recent write up published in MIT Sloan Management Review concludes that Disruptive Innovation theory is "not very useful" for making predictions bas...
  Leapfrogging Technologies by Developing Countries
Leapfrogging is a way for developing countries to benefit from earlier skills and advancements of the developed world by skipping altogether a technol...
  Is Disruptive Innovation Radical?
Disruptive Innovation is often incorrectly described as a radical rather than incremental change in technology. In fact, one of the fundamental elemen...
  Slow Innovation: PROs, CONs and Tips
When we talk about innovation, we often associate it with disruptive innovation efforts / large-scale processes that change an organization’s business...
  Distinguishing Three Types of Innovation
Christensen (2014) argues that investing in different types of innovation will influence markets and firms in different ways. Therefore it is importan...
  Disruptive Innovations Question our Knowledge
It's hard to change. This holds for organisations and people. A disruptive innovation questions what we know and exposes that we don't know, what we d...
  Practical application
I have set up a new company specifically to apply Christensen's theories to the £750m a year qualifications sector in the UK. If you want to check out...
  Blue/Innovate and Red/Disrupt
An interesting exercise is to work through a product's feature set using both the Strategy Map of "Blue Ocean Strategy" (Kim & Mauborgne) and the disr...

Expert Tips - Disruptive Innovation

How Can Incumbents Respond to Disruptors?


How to Find Good Product Ideas? List of 10 Approaches


Innovation Pitfalls


Challenging the Existing Strategic Logic


The Simple-Cheap-Convenient Approach


Distinguish Disruptive Technology Innovation From Disruptive Marketing Innovation!


How to Detect Consumer Needs that are Unmet?


Key Challenges of Internet Age for Management and for Product and Service Development


Recent Innovation Trends | New Innovation Types


How to Think Differently in Innovation?


How to Lead an Innovation Team


Innovating by Reconsidering Value Delivery


Creating Organizations to Produce Breakthrough Innovations


How to Design Experiments to Support Decision-making on Strategic Innovations


Classes of Innovation | Sources of Innovation


Why Large Firms are Having Difficulties to Deal with Disruptive Innovations


Big-Bang Disruption


What Makes a Company Innovative?


Three Critical Capabilities in Developing a Strategic Corporate Disruptive Innovation Competence


Predecessor of Christensen


How BOP Countries Can Disrupt Western Markets


Designing Complex Products or Systems Through Iterative Rapid-cycle Prototyping


Misunderstandings on the Concept of Disruptive Innovations


Why Some Technology Revolutions Take Off and Others Don't


Geographic Dimension to Explain Disruptive Innovation in Emerging Countries


Advance yourself in business administration and management

Resources - Disruptive Innovation

Asymmetric Innovation


Disruptive Technologies


Introduction to Innovation and Disruptive Technologies


Explained: How can Innovative Players Beat Large, Established Firms?


Prof. Clay Christensen Explains Disruptive Innovation


Design Thinking for Innovation


Disruptive Innovation: Why Market Leaders Fail


Strategic Innovation Leadership


Distinctive vs. Dynamic Capabilities


The Importance of Noncustomers


Disruptive Innovation Diagram


News about Disruptive Innovation


News about Disruptive Change


Videos about Disruptive Innovation


Videos about Disruptive Change


Presentations about Disruptive Innovation


Presentations about Disruptive Change


Books about Disruptive Innovation


Books about Disruptive Change


More about Disruptive Innovation


More about Disruptive Change


Accelerate your management career

Compare with:  Product Life Cycle  |  Twelve Principles of the Network Economy  |  Bass Diffusion Model  |  Ten Schools of Thought  |  Blue Ocean Strategy  |  Positioning  |  Innovation Adoption Curve  |  Marketing Mix  |  Forget Borrow Learn  |  Four Trajectories of Industry Change  |  Co-Creation  |  Three Dimensional Business Definition

Return to Management Hub: Change & Organization  |  Marketing  |  Strategy

More Management Methods, Models and Theory

Special Interest Group Leader
Rick Mueller
Student (University)


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2018 12manage - The Executive Fast Track. V15.0 - Last updated: 16-12-2018. All names ™ of their owners.