The Master Of Innovation

Management theorists have spent little time pondering potato salad. But on the apparently mundane subject of how to transport that all-American picnic dish, there's a lesson in what's becoming the hottest business theory of the new century. Decades ago, Tupperware solved the problem of how to carry deli items to the neighbor's cookout, but the company's heavy-duty plastic containers created unspoken anxieties. Because the containers can cost $5 each and will last for years, moms carefully guard their Tupperware trove, refusing to let kids use the containers for school lunches (for fear they'll be lost) and awkwardly trying to retrieve them after the neighbors' picnics without appearing rude.

Then a team of marketers devised a solution. Launched in 1999, GladWare is a line of lighter, less expensive plastic containers with a simple marketing proposition: Not as Good as Tupperware. GladWare won't withstand as many trips from freezer to microwave, and it's not meant to be bequeathed to your grandchildren. But at 50 or 75 cents a container, there's no violin music if it ends up in a cafeteria trash can or Barney next door "forgets" to return it. And consumers love it: today GladWare, made by Clorox, holds an $80 million slice of the $450 million retail container industry.

In a world where companies spend billions developing better mousetraps, there's growing recognition of a different breakthrough: the cheaper, mediocre mousetrap. It's a strategy called "disruptive innovation," and it's leading its creator, Prof. Clayton Christensen of Harvard Business School, into the top ranks of management gurus. Christensen first set out his ideas in the 1997 best seller "The Innovator's Dilemma," which sold 500,000 copies in 10 languages. Now he's written "The Innovator's Solution" (with consultant Michael Raynor), which is climbing best-seller lists.

While the first book described the forces that lead companies to "overshoot" customer needs and leave themselves vulnerable to down-market competition, "Solution" teaches companies to use those forces to their advantage--to become the hunter instead of the prey. The books are turning Christensen into a huge draw on the corporate lecture circuit. His most recent seminar quickly sold out 160 seats--at $2,000 a ticket.

Christensen is an unlikely managerial rock star. The former Rhodes scholar, who's 6 feet 8 and a devout Mormon, spent the 1980s running a start-up industrial-ceramics company, and he wondered why his small firm could cause fits for bigger rivals. In 1989, nearing 40 and with five children, he joined Harvard's doctoral program. "It was very risky," he says, but jumping into academia in midlife had advantages. "I had a lot of questions that were relevant to the world that managers lived in."

To find answers, he spent the early 1990s studying the history of unsexy industries like disc drives and earth excavators. Wherever he looked, he saw established players being toppled by upstarts whose inferior products slowly crept up-market, and from those examples he drew larger lessons. "I think God blessed me with an ability to see beyond the industry-specific situation, to be able to say that disc drives aren't different from excavators or Honda motorcycles--that the phenomenon isn't industry- or product-specific, but in the forces that act upon the managers."

It's a slightly different approach from the one that's fueled a generation of successful business books, from Tom Peters and Robert Waterman's "In Search of Excellence" (1982) to Jim Collins's "Built to Last" (1994) and "Good to Great" (2001). Those titles dissect companies that exhibit an attribute--long-term financial success, say--and then describe the behaviors they use to achieve that result. Christensen's work feels more akin to physics, as he explains how different forces shape industries. Among established gurus, Christensen is most often compared to Harvard Business School strategy professor Michael Porter, who popularized the concept of "competitive advantage."

Why has Christensen's thinking proved so popular? First, the question at the heart of his research is one that people can relate to: how do Davids slay Goliaths? "It's a really big question that involves people personally," says Thomas Stewart, editor of the Harvard Business Review. "You see it happen to yourself, your organization, your friends, your competitors."

Second, Christensen is clear but not simplistic. He dismisses management tomes that reduce complex theories to five-point plans. His writing shows awareness of how corporate politics really works. For example, he describes how budgeting pressures and the race to win the next promotion can lead managers to place bets on the wrong products. And parts of his theorizing are just plain fun as he invites readers to brainstorm along as he formulates ideas for disruptive products.

His theories have also proved profitable. Intel once put most of its development dollars into building ever faster microprocessors. But after hearing Christensen's shtik, Andy Grove redirected his R&D team to look down-market, creating the cheaper-but-passable Celeron chip, which became a huge seller. At Kodak, whose core film business has faced massive disruption from digital cameras, managers have embraced Christensen's teachings as "a way to look at technology transitions and the opportunities they afford," says chief technology officer James Stoffel. For instance, disruption theory contributed to Kodak's decision to divert dollars from building pricier cameras with ever more megapixels, and instead develop products that make less expensive cameras more consumer-friendly, such as docking stations, which ease the process of downloading images to PCs or printers.

As his following grows, Christensen admits it's becoming difficult to balance demand for his consulting with his campus duties. But despite the lure of full-time gurudom, Christensen says he finds B-school life too invigorating to give up. As he develops his theories, he says, "there's nothing like a blank stare from a student to tell you you don't quite have it right yet." And while many business books spark fads whose fade seems inevitable (in 2020, will anyone really remember "Who Moved My Cheese?"), there are exceptions. "Some are like supernovas--they burn really bright and then dim," says Michael Hammer, coauthor of the 1993 megahit "Reengineering the Corporation." "The other kind comes out strong but has a long tail." Indeed, Hammer's evolving ideas have fueled three subsequent books, and he still draws thousands of people a year to his seminars. "Big ideas take a long time to get institutionalized," Hammer says. "I wouldn't be surprised if that's the same for Clay's work."

For now, Christensen is busy expanding his ideas beyond big business. Last month he traveled to Singapore to talk with officials about preventing its economy from being overtaken by more nimble competitors. And even as he looks abroad, his ideas will continue to have a big impact in the trenches of Corporate America. Beth Springer, the Clorox vice president who oversees GladWare (which was a case study in a recent Harvard strategy newsletter), says her team is always looking for new ways to implement Christensen's theories. "We're big fans," Springer says. "We do refer to him as an inspiration." In fact, disruptive theory is at the heart of their latest product launch, Press 'n Seal, a new plastic wrap. It's cheaper than a Ziploc bag, but it's actually better for many food-storage uses, she says. As Press 'n Seal users wrap their Thanksgiving leftovers, they'll owe a small thanks to the big idea that helped bring it into existence.