Difference between revisions of "Creative Destruction"

Revision as of 19:34, 9 February 2021

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Static societies do not innovate. Chaotic societies do not survive. A measured approach to Creative Destruction can build dynamic, growing societies.

Context

One of the shibboleths of the corporate reformers is their belief in “creative destruction,” “innovation, and “disruption” as an end in itself. These ideas justify their efforts to tear apart traditional public school systems, replace experienced teachers with inexperienced youngsters, close schools, and experiment with charters, vouchers, and anything else that will destroy the status quo. To be sure, some are in the school reform business to make money, but others see themselves as heroes of a movement that sees itself as blowing up “failing schools” and forcing fresh innovations into a stagnant sector of the economy.

This remarkable article by Jill Lepore, published by the Néw Yorker, explodes the dogmas of “disruption” as progress. I posted the article last year, but am posting it again because I see it as a classic. It sheds light on our narrative about how change happens.

Lepore attributes the fascination with disruption to the influential work of Harvard business professor Clayton Christensen. He popularized the idea that big companies die as they are overtaken by nimble start-ups that embrace innovation. Business leaders took heed and committed themselves to persistent re-invention and self-disruption, or buying up the start-ups before they overtook the established industry leader.

In education, we have seen the dogma of disruption in the policies of Arne Duncan, the Bloomberg administration of education in New York City (with its focus on closing schools and opening schools and closing the schools it opened), the Rahm Emanuel model (closing 50 public schools on the same day), the Broad Foundation, the Gates Foundation, the Walton Foundation, and business groups. They scorn incremental change and pursue the disruptive idea–like closing schools, the Common Core, federally funded tests–that will shake up schools across the nation with a series of bold and experimental strokes.

Do schools need to be disrupted by techniques borrowed from the business world? Do families need to be disrupted? Do communities need disruption? According to disruption theory, disruption is the precursor to success.

Lepore, it can be fairly said, demolishes disruption theory by showing that Christensen’s examples provide no evidence for the theory. To the contrary, the successful companies over the long haul were not the innovators that disrupted the industry, but those that changed incrementally, tinkering and constantly improving their processes and their products.

One of Christensen’s leading examples of disruption was the disk-drive industry. This was the subject of his doctoral dissertation. In his telling, a company called Seagate Technology fell by the wayside as competitors disrupted its market. But, Lepore shows, Christensen was wrong.

“In fact, Seagate Technology was not felled by disruption. Between 1989 and 1990, its sales doubled, reaching $2.4 billion, “more than all of its U.S. competitors combined,” according to an industry report. In 1997, the year Christensen published “The Innovator’s Dilemma,” Seagate was the largest company in the disk-drive industry, reporting revenues of nine billion dollars. Last year, Seagate shipped its two-billionth disk drive. Most of the entrant firms celebrated by Christensen as triumphant disrupters, on the other hand, no longer exist, their success having been in some cases brief and in others illusory…..

“As striking as the disruption in the disk-drive industry seemed in the nineteen-eighties, more striking, from the vantage of history, are the continuities. Christensen argues that incumbents in the disk-drive industry were regularly destroyed by newcomers. But today, after much consolidation, the divisions that dominate the industry are divisions that led the market in the nineteen-eighties. (In some instances, what shifted was their ownership: I.B.M. sold its hard-disk division to Hitachi, which later sold its division to Western Digital.) In the longer term, victory in the disk-drive industry appears to have gone to the manufacturers that were good at incremental improvements, whether or not they were the first to market the disruptive new format. Companies that were quick to release a new product but not skilled at tinkering have tended to flame out.”

Lepore systematically demolishes disruption theory. This is one of my favorite stories she tells:

“Christensen’s sources are often dubious and his logic questionable. His single citation for his investigation of the “disruptive transition from mechanical to electronic motor controls,” in which he identifies the Allen-Bradley Company as triumphing over four rivals, is a book called “The Bradley Legacy,” an account published by a foundation established by the company’s founders. This is akin to calling an actor the greatest talent in a generation after interviewing his publicist. “Use theory to help guide data collection,” Christensen advises.”

Lepore’s article is one of the best critiques of the corporate reform move my in education that I have read. The belief that education will improve if schools are closed and opened, closed and opened again, if change and turmoil are goals, if leaders are trained to accept disruption as a positive method, there we find the workings if disruption theory.

Lepore says it’s hooey.

She writes:

“Disruptive innovation as an explanation for how change happens is everywhere. Ideas that come from business schools are exceptionally well marketed. Faith in disruption is the best illustration, and the worst case, of a larger historical transformation having to do with secularization, and what happens when the invisible hand replaces the hand of God as explanation and justification. Innovation and disruption are ideas that originated in the arena of business but which have since been applied to arenas whose values and goals are remote from the values and goals of business. People aren’t disk drives. Public schools, colleges and universities, churches, museums, and many hospitals, all of which have been subjected to disruptive innovation, have revenues and expenses and infrastructures, but they aren’t industries in the same way that manufacturers of hard-disk drives or truck engines or drygoods are industries. Journalism isn’t an industry in that sense, either.

“Doctors have obligations to their patients, teachers to their students, pastors to their congregations, curators to the public, and journalists to their readers—obligations that lie outside the realm of earnings, and are fundamentally different from the obligations that a business executive has to employees, partners, and investors. Historically, institutions like museums, hospitals, schools, and universities have been supported by patronage, donations made by individuals or funding from church or state. The press has generally supported itself by charging subscribers and selling advertising. (Underwriting by corporations and foundations is a funding source of more recent vintage.) Charging for admission, membership, subscriptions and, for some, earning profits are similarities these institutions have with businesses. Still, that doesn’t make them industries, which turn things into commodities and sell them for gain.”

References

• MIT course work on Creative Destruction.