Monthly Archives: June 2014

Is Clayton Christensen’s ‘The Innovator’s Dilemma’ Wrong?

Clayton Christensen’s website declares him to be “The World’s Top Management Thinker.” And judging by accolades, position (Harvard Business School), and books, that may well be the case. His (great) first book, “The Innovator’s Dilemma,” published in 1997, is widely-admired. In fact the Economist in 2011 named it as one of the six most important books about business ever written.

Which is why Jill Lepore’s, June 23, 2014, New Yorker piece attacking “The Innovator’s Dilemma,” was so intriguing.  Prof. Lepore, also at Harvard (she’s a historian), writes:

“The Innovator’s Dilemma” consists of a set of handpicked case studies, beginning with the disk-drive industry, which was the subject of Christensen’s doctoral thesis, in 1992. “Nowhere in the history of business has there been an industry like disk drives,” Christensen writes, which makes it a very odd choice for an investigation designed to create a model for understanding other industries …

Disruptive innovation is a theory about why businesses fail. It’s not more than that. It doesn’t explain change. It’s not a law of nature. It’s an artifact of history, an idea, forged in time; it’s the manufacture of a moment of upsetting and edgy uncertainty. Transfixed by change, it’s blind to continuity. It makes a very poor prophet.

To summarize the debate, In a nutshell, “The Innovator’s Dilemma” argues that big successful companies put too much of a focus on current needs and fail to adapt to new technologies that will address future needs, and so those companies eventually fail (disrupted by the new startups). Prof. Lepore points out that several of the companies he says were disrupted by innovative upstarts, in fact survived, and several of his disrupters, in turn, didn’t make it.

Prof. Lepore would seem to be making a powerful case .. until one reads Prof. Christensen response in an interview with Business Week:

… in order to discredit me, Jill had to break all of the rules of scholarship that she accused me of breaking—in just egregious ways, truly egregious ways. In fact, every one—every one—of those points that she attempted to make [about The Innovator’s Dilemma] has been addressed in a subsequent book or article. Every one! And if she was truly a scholar as she pretends, she would have read [those]. I hope you can understand why I am mad that a woman of her stature could perform such a criminal act of dishonesty—at Harvard, of all places.

Andrew Hill backs with Prof Christensen in the Financial Times:

Prof Christensen is no ideologue. He has developed his original idea, in a continuing and valuable attempt to understand how innovation works and how to realise its benefits. In the latest Harvard Business Review, he explains why strict adherence to financial measures of success drives investment away from the type of innovation that could increase jobs and growth.

The New Yorker article is a useful corrective for overzealous executives and consultants who took a 17-year-old idea and turned it into a religion. But complacent managers and smug strategists who think they can return to a golden age of known rivals and predictable markets should not take comfort from it.

That point is perhaps one of the positive outcomes of this debate, although it will be interesting to see Prof. Lepore’s response (or apology?)

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How to Spot Talent (Hint: Experience is Overrated)

Top recruiters are changing how they work. Or they should be. That’s because the market today for top talent is too tight, and business is too volatile and complex, for the old method of focusing on “competencies” when hiring and developing talent to work.

Instead the focus needs to be on potential: That is the ability to adapt to an ever-changing business environment and grow into new roles.

This is the thesis put forward by Claudio Fernandez-Araoz in the June 2014 Harvard Business Review, entitled “21st Century Talent Spotting” (although I prefer the front cover’s title, pictured.)

HBR June 2014 cover copy

He declares we are in “a new era of talent spotting – one in which our evaluations of one another are based not on brawn, brains, experience, or competencies, but on potential.” (The first era of recruiting, he explains, was based on physical attributes, the second era focused on IQ, and the third era was focused on competence.)

The reason today is different, and competence, for example, is not enough, is because “what makes someone successful in a particular role today might not tomorrow if the competitive environment shifts, the company’s strategy changes, or he or she must collaborate with or manage a different group of colleagues.”

Therefore, the test is not whether they have the right skills, but whether they have the potential to learn new ones. 

And so to the big question: How do you tell if someone has potential?

The key is to focus on the following:

  1. The right motivation (real commitment to the pursuit of the right goals)
  2. Curiosity (seeking new experiences and knowledge, and openness to learning and change)
  3. Insight (ability to gather and make sense of information that suggests new possibilities)
  4. Engagement (using emotion and logic to communicate a persuasive vision and connect with people)
  5. Determination (wherewithal to fight for difficult goals and bounce back from adversity)

You discover if people have this, he says, both by mining their history and having in-depth interviews. Questions like “What steps do you take to seek out the unknown?” and “What do you do to broaden your thinking, experience, or personal development?” help elicit that information.

This thesis is something my colleagues and I at Apploi subscribe too, as do many of our clients. We are built on the assumption that the one-dimensional resume, which predominately shows work experience and education, is not enough on which to filter potential employers.

By letting candidates showcase themselves and their talents, and answer video and audio questions, companies are allowing potential to shine.

While a candidate might not have a top GPA, they can, for example, showcase community work they’ve done rebuilding their local center that was devastated by Katrina.

Or while their work experience may be thin, when challenged with a real-life complicated logistical scenario in a video question, their ability to think through challenges in a clear and rational way can shine through.

The results we see is that companies are now bringing in for interviews people they previously would have discarded based just on their resume – and those people are turning out to be top performers (and with lower turnover). What Mr. Fernandez-Araoz is saying, we’re seeing through our data.

It’s fascinating to see this concept being embraced by everyone from pioneers within the international community (UNOPs) through to banks and financial institutions through to leaders in the retail and services space.

Whether you’re hiring a barista or a barrister, there’s a growing consensus that potential deserves to play a major (and early) role in that decision. Do you do that? (and how?)

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