Disney’s purpose, “make people happy,”8 or Hewlett-Packard’s
“make technical contributions for the advancement and welfare
of humanity.”9 Perhaps due to my advertising background, I
always look for differentiation. I have a distinct preference for
purposes with more specific substance, like those of Pampers,
Dove, or Airbnb. These seem to me better equipped to fit
Collins’s objective of understanding and communicating what
you can be the best at.
Jim Collins
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Collins directed his advice to companies, but it can also apply
to individuals. I don’t mean just the heads of industry, but also
people who don’t have management responsibilities, those who
do not lead, but are led. They, too, can try to go from good to
great. This is what William Faulkner suggested when he gave
the advice: “Don’t bother just to be better than your contempo-
raries or predecessors. Try to be better than yourself.”10
the era of the and
In 1994, Collins denounced the “Tyranny of the Or.” He ex-
plained in his book Built to Last that posing a problem in terms
of alternatives, A or B, reduces the scope of possibilities. It locks
the thought process into conventional approaches, and reduces
the ambition to stray from well-trodden paths. Alternatives often
turn out to be too restrictive. They imperfectly describe issues
in a world that is more and more complex, harder and harder to
understand. Collins was one of the first to explain that we have
entered the era of the and.
The capacity to reconcile opposing forces is a common trait
among great captains of industry and it extends to all aspects
of management. As we all know, business leaders are constantly
faced with contradictory objectives. They have to reconcile the
short and long terms, conjugate internal and external growth,
and determine the point of equilibrium between global and local,
between centralization and decentralization. When it comes to
choosing employees, they must find a fair balance between inter-
nal promotion and outside hiring. They must manage the syn-
ergy between generalists and specialists, knowing that despite
specialists’ essential skills, it’s often the broader experience of
generalists that provides the alchemy at the heart of the creation
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of real value. They must also make the crucial decision of what
should come from internal research and what should be brought
by outside partners. Finally, they have to reconcile their share-
holders’ expectations of return on investment and their employ-
ees’ no less legitimate demands for a fair reward.
Refusing to become trapped between two sets of alternatives
preserves your mental agility. It allows you to integrate different
points of view without settling for an often-sterile equilibrium.
Instead of choosing by excluding things, leaders should make
decisions by reconciling contraries. Francis Scott Fitzgerald
wrote on this: “The test of a first-rate intelligence is the ability
to hold two opposed ideas in the mind at the same time, and still
retain the ability to function.”11
Steve Jobs did not choose between software and hardware,
but brought them together into each of his devices, with the
one allowing Apple to charge a premium for the other. Bernard
Arnault did not choose between making LVMH’s brands more
and more prestigious or making luxury accessible to all. He did
both at the same time. As for Herb Kelleher, he did not sacrifice
quality for low cost at Southwest Airlines.
But with time, I have learned that it is not always possible to
reconcile the two alternatives in an either/or choice. The answer
does not necessarily reside in the both option, but it can be some-
where else—in a third place.
Toyota decided to hold off on making electric cars until
the market was ready and public authorities had installed the
necessary charging infrastructure. But Toyota could not ignore
the essential place that electricity would play in the future. So,
the Japanese company opted for a third way, the hybrid car.
Space X, Elon Musk faced a difficult choice. On the one hand,
he could attempt to raise massive funds to finance a program
Jim Collins
65
that would have been as expensive as that of Arianespace, which
completed 11 launches in 2018. On the other hand, Musk could
settle for a program that has less frequent launches. The solution
lay elsewhere and it seemed natural once it was found. It was to
employ reusable booster engines. These were more expensive to
make initially, but could be reused up to once a week. As a result,
they could be amortized quickly enough to render Elon Musk’s
intended business model viable.
What is true for business also goes for the world of nonprofit.
I work for UNICEF. Like many people, I was shocked to learn
of the conditions suffered in the United States by migrants’ chil-
dren. France is also far from exemplary when it comes to the
treatment of migrants. In this country, children continue to be
interned with their parents in detention centers. Many think the
only two solutions are to separate children from their parents or
to lock the families up together. However, there is a third option.
We looked for it, and found it being used in Ireland and some
Nordic countries. Immigrants there are not confined in deten-
tion centers. Instead, they simply have to register themselves and
their children every week at the closest police station. If they fail
to do so, they are immediately kicked out of the country. This
proves that the choice of separating children or keeping families
incarcerated is a false choice.
I’ve cited these different examples to underline the fact that,
when confronted with a choice between two unsatisfactory alter-
natives, it’s often productive to look for the solution elsewhere.
In order not to allow yourself to become trapped in, it’s worth
searching for a third option.
A last point: When one observes such contradictory forces,
it appears that they are often expressed in the form of a para-
dox. The Harvard Business Review went as far as to talk about the
importance of knowing how to “unleash the power of paradox.”12
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According to the article, a primary quality of great leaders is the
capability to thrive on paradoxes and use them to discover orig-
inal solutions.
Here are some examples of paradoxes:
“It’s still the L’Oreal of always, but has nothing to do with
the L’Oreal of yesterday,”13 Jean-Paul Agon, chairman and
CEO of L’Oreal.
“Our task is to read things that are not yet on the page,”14
Steve Jobs.
“Finance is the only way to make money when you have no
idea how to cr
eate wealth,”15 Peter Thiel, founder of PayPal.
“I was so much older then. I’m younger than that now,”16
Bob Dylan. *
It is worth dwelling on paradoxes. They always contain a
hidden truth. A paradox with a seductive formulation prompts
the thought process and leads us to question our own logic.
Paradoxes are the spark between two contradictory ideas. The
apparent contradiction in terms obliges us to reflect, works on
us from the inside, and liberates us from conventional thinking.
Niels Bohr, co-founder of the quantum theory of physics,
summed it up beautifully: “How wonderful that we have met
with a paradox. Now we have some hope of making progress.”17
* Copyright © 1964 by Warner Bros. Inc.; renewed 1992 by Special Rider Music. All rights reserved. International copyright secured. Reprinted by permission.
Chapter 8
Clayton Christensen
ON DISRUPTIVE INNOVATION
While Jim Collins thinks in terms of paradox, Clayton
Christensen does so in terms of dilemma. But when it
comes to analyzing the conflicting objectives faced by heads of
industry, both are in agreement. In his bestseller The Innovators’
Dilemma, 1 Christensen examines two alternatives. Should a com-
pany prioritize protecting its existing business, or investing more
massively to counter disruptive innovators, who, sooner or later,
will drastically alter the market? This choice is all the more diffi-
cult since, most often, radical innovations provoke a change in a
company’s economic model. Christensen’s alternatives are at the
heart of the eternal debate between improvement and transfor-
mation, exploitation versus exploration.
In The Innovator’s Dilemma, Christensen introduces the
notion of “disruptive innovation,” the concept that made him
famous. He first described the idea 24 years ago in the Harvard
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Business Review 2 and, since then, it has been subject to analysis
the world over. The concept describes how companies enter
the market at the low end, build a solid base of consumers, then
move progressively upmarket, destabilizing or even annihilating
existing companies that have been present in their market sector
for decades.
This theory owes its success to the original thinking of its
author, but also, and this is far from negligible, to his judicious
choice to use the expression “disruptive innovation.” The dis-
tinction between gradual innovations and non-gradual ones had
been established for decades. In 1962, Thomas Kuhn introduced
the idea of “discontinuity.”3 Then in the late seventies, academ-
ics and business analysts referred to “discontinuous innovation.”
Christensen’s term, “disruptive innovation,” sounds better. It’s
memorable. It has contributed largely to spreading his theory.
In semantic terms, the path had already been cleared for him.
He coined the expression “disruptive innovation” years after our
agency had launched the Disruption methodology.4 Our initial
work on disruption in the early nineties had already begun to
popularize the expression. Christensen started to use the adjective
disruptive, whose connotation is less entrenched than the noun
disruption. Over the years, journalists and writers began using
simply the word disruption to qualify Christensen’s thinking. The
Harvard professor even ended up adopting the word himself.
Christensen is indeed a disruptive thinker and he has left his
mark on the academic world as no one else has over the past
20 years. The books he has published, and the articles that
they prompted, have stimulated massive discussion of the word
disruption and provoked a lasting wave of reactions.
His theory has proved itself clearly useful. Christensen uses his
model to show how many companies were disrupted and how he
can alert others to the nature of the dangers that may threaten them.
Clayton Christensen
69
Yet, as I will explain later in this chapter, this concept, like all
theories, is constrained by its proper limits. I recommend not to
applying it systematically, but rather learning to use it the right
way, with discernment. Above all, this allows me to emphasize a
point that is very important to me, namely that disruption does
not always equate with destruction. Far from it. Christensen’s
thinking has kept this debate alive.
Bottom-up Disruption
In trying to continually improve their offers, many companies
eventually end up producing products and services that are
actually too sophisticated, too expensive, and too complicat-
ed. In doing so, these companies create space at the bottom
of the market for the entry of those companies Christensen
identifies as “disruptive innovators.” The entrants that seize
this opportunity begin by giving a new population of custom-
ers access to a product category at the low end. Later, they
progressively move upmarket and conquer a share of the his-
torical consumer base belonging to legacy companies, thus
upheaving those established positions, sometimes to the point
of disruption.
Salesforce is frequently used as an example to illustrate the
theory of disruptive innovation. This is because its chief execu-
tive officer, Marc Benioff, initially targeted small companies and
start-ups, to whom he offered his software on a free trial basis.
At that time, Salesforce’s software was much simpler and less
sophisticated than what was being proposed by its competitors.
Benioff gradually added new functions, enabling Salesforce to
move upmarket and, in doing so, permanently destabilize Siebel,
which was the market leader at the time.
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Huawei is another example. As we’ve already discussed,
the Chinese company started by conquering the low end of
its domestic market before little by little enriching its offer.
When the time came to turn to foreign markets, you might have
thought that Huawei would have exported the improved ver-
sions of its products, which were better suited to Western needs.
This was not the case. Instead, Huawei opted for an inverse
strategy, first exporting its low-end products worldwide. This is
how it imposed its business model, country by country. Huawei’s
approach reflects Christensen’s theory. Only after penetrating
markets at the bottom end did Huawei begin to upgrade its offer.
The originality of Christensen’s thinking resides in this dou-
ble movement: the entry by the low-end, then the progression
up the value chain toward the top. At the beginning, the offer is
less expensive and simpler. It democratizes innovation by being
accessible to most. It’s what Ford’s Model T did 100 years ago,
and more recently Club Med or Ikea. Today, most start-ups
provide access to new markets. They tend to penetrate at the
bottom, and then create a new kind of consumption or us
age.
Christensen had thus defined the principles that would guide
the success of future start-ups, 10 years before they even existed.
Recognizing this pattern, he was also able to predict the fate of
Kodak long before its fall.
Christensen’s theory was rightly credited with having a real
ability to predict. It helped existing, established companies
be alert and be prepared. The bottom-up disruption sequence
he describes exposes the potential risks these companies will be
confronted with. This highlights a dilemma, and also a paradox.
According to the Harvard professor, if companies fail, it’s not
because their managers made bad decisions, but rather because
they continued to follow the same logic and apply the same deci-
sions that had previously made them successful. Success, which
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71
induces a kind of blindness, prevents them from seeing growing
menaces. “Doing the right thing turns out to be the wrong thing
to do,”5 as Christensen wrote.
the Disruption Controversy
All this being said, no conceptual framework, however irrefut-
able it may appear, can avoid attracting a degree of controversy.
When cases no longer fit into its established model, a theory can
become contested.
Jill Lepore, a fellow professor of Christensen’s at Harvard,
published an article in the New Yorker magazine6 that created
considerable media noise by attempting to deconstruct Chris-
tensen’s theory. She points out that many of the companies that
he qualifies as failures actually ended up being successful.
Two other professors of the Sloan Business School at MIT
have since written another critical paper. After close examination
of 77 of the examples7 of disruptive innovation Christensen cites
in his books The Innovator’s Dilemma and The Innovator’s Solution, they argue that his hypotheses should be taken with caution. Both
MIT scholars come to the conclusion that predictions based on
Christensen’s theory do not always prove true.
As a result, Christensen has sometimes struggled with his
own model in order to preserve it—and he has used it to issue
some questionable predictions. For instance, in 2007 he pro-
jected the failure of the iPhone. More recently, he claimed that
there was nothing disruptive about Uber. This latter assertion
led me to publish an article in Forbes,8 explaining that some of