Clayton Christensen Changed a Lot of Minds, Including Mine

The business world is littered with companies that failed to change as markets transformed around them — Kodak, Toy ‘R Us, Blockbuster, Circuit City and US Steel are just a few. One company that made reactive changes when needed was computer chip giant Intel. Smaller companies were making inroads with less expensive, or low-end computer chips, and beginning to challenge Intel’s lock on the high-end, high margin chip. Intel was faced with choices that unanswered might have undone the company. Should they hold on to their high margin business, drop prices, or something else?

They chose to do something else. Intel took the rare step of creating Celeron, a new less expensive chip to thwart the up-and-coming competitors. Within a year, Intel captured 35% of the market for cheaper chips pushing the start-ups down and solidifying its dominance. While Intel’s CEO at the time, Andy Grove, made the final decision, he credited a meeting with Clayton Christensen, a Harvard professor and author of “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail” with opening his eyes to needed transformation.

Christensen did the same sort of thing for many top executives including Apple’s Steve Jobs, Amazon’s Jeff Bezos and Netflix’s Reed Hastings.