Disruptive Innovation – Why Steve Jobs IS Apple!

Let’s face it: we all like to think that we work at innovative companies that are destined to conquer their current industry and eventually rule the world. But, the reality is far different.

If you have never read the breakthrough research on innovation by Dr. Clayton Christensen of Harvard Business School, then you need to stop reading this and come back after you have read his works. His book, The Innovator’s Dilemma, explains clearly why huge, highly successful companies who literally OWN their industry fail to continue to be successful.

Let’s look at a few examples: 

 Xerox – They created the world of copiers, they had the Palo Alto Research Center, they invented the GUI. What do you buy from them today? HP, Canon, Lexmark…they own the printers and copiers. Microsoft and Apple…they own the GUI.

• Microsoft – They owned the search world. Heck, they had the only viable browser, they owned MSN, and their OS drove virtually every platform used to access the Internet. What happens? Two guys pop out of nowhere, and in a few years Google has stolen the brass ring.
• Wang Labs – Dr. An Wang invented computer memory! They owned the foundations for the future of high speed processing and storage. Are they even still in business?
• ATT – ATT was the largest company in the world. I am speaking of Ma Bell, the old ATT before the breakup. It had so much cash that it was stated that ‘ATT could never go broke’. Along came a disruptive force, MCI, and the giant collapsed. Today, ATT is big, but it owes most of that to its acquisition of Cingular. They bought their way out of innovation extinction.

Dr. Christensen states, “the logical, competent decisions of management that are critical to the success of their companies are also the reasons why they lose their positions of leadership.” (The Innovator’s Dilemma, 1997, Harvard Business School Press)

So, what does Dr. Christensen’s work have to do with Steve Jobs and his medical leave from Apple? Jobs was forced out of Apple in 1985 and the company proceeded down the road to near-destruction. He was begged to return in 1996, and has driven Apple into places no one would have ever guessed. The Iphone has now dominated the phone industry even at premium prices. Itunes is the number one music distributor. How much further away from building computers and developing an OS can you get?  Now Jobs has taken a medical leave, the stock dropped 10% and the world is wondering if Apple will continue its string of successes.

In short, Jobs is an innovator. I know, I know: everyone has talked about how great an innovator he is. And I agree. But the difference between Jobs and many other innovators is that he is in a position as CEO to force the company to make risky decisions and investments.

When asked about creating the Mac, Jobs said “The people who are doing the work are the moving force behind the Macintosh. My job is to create a space for them, to clear out the rest of the organization and keep it at bay.” He clearly understands that risk is necessary and that you have to make decisions that are not always the best for the immediate bottom line.

When asked about creating products such as the Next computer, Jobs stated, “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”  He also said “Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.”

The key, though, is ‘disruptive innovation’. Jobs has created new technologies and new markets that completely knock the existing players out of the competition. This is what Dr. Christensen calls disruptive innovation. The giant killer of large corporations is the small guy rising out of nowhere with creative new products that disrupt the existing status quo.

The big, legacy players focus on keeping customers happy, continuing to sell existing products, enhancing existing product feature sets and mostly keeping investors happy all the time at all costs. Computers have become so powerful that the bulk of the machine is not used by the majority of consumers. Microsoft Windows has become so powerful that most of us have no knowledge of large portions of the software we use everyday. Corporations and consumers have no desire to upgrade to Vista until end of life threats start to make life difficult. Cell phones have so many unused features that it is estimated that the average consumer never uses 60% of those features. And yet, the enhancements keep coming.

Jobs is still back in the garage coming up with new, cool ideas everyday. I am sure he looks at other company’s products and knows -not just thinks, but KNOWS- how to destroy them with disruptive new ideas.

Are there other people that can innovate phenomenal product opportunities already working at Apple? Definitely! Will the executive team at Apple, without Jobs at the helm, have enough faith to gamble millions on disruptive innovations that may fail? Only time will tell.

David Croslin

CTO, GigaSpeed International, Inc.

http://www.davidcroslin.com