Behind the latest debate over the business-school doctrine of ‘disruptive innovation’ stands an important question that most of the debaters haven’t asked: Might the idea actually fit philanthropy better than it does business?
A recent article by Jill Lepore in the New Yorker takes aim at the intellectual froth foaming around the notion of “disruptive innovation.” The phrase, which describes new products and methods that unexpectedly upend whole industries (the way Amazon revolutionized retail, or digital cameras did film), was popularized in the 1990s by Clayton Christensen, a Harvard business professor. It’s fair to say, without hyperbole, that Ms. Lepore considers the whole idea a crock. And not surprisingly, the disciples of disruption are hitting back. Although I distrust any jargon that grows as instantly ubiquitous as “disruption” — it’s practically impossible to have a learned discussion about any new idea without someone opining on whether it is “disruptive” — I’m waiting for the debate to unfold before I take sides.
Still, even though this is mainly a dispute over business theory, it has implications for philanthropy and civil society as well. For starters, there is no more absorptive audience for the latest Business School lingo than contemporary foundations, which are fountainheads of “leverage,” “branding,” “return-on-investment,” “data-driven strategies,” “tipping points,” and, yes, “disruptive innovation,” among many other boardroom clichés. If “disruption” is ultimately exposed as fakery, there could be a lot of red faces in the dot-org blogosphere.
But more profoundly, many foundations and nonprofits genuinely see themselves as operating on some sort of business model or theory, whether or not the shoe fits. Ms. Lepore isn’t fond of that reality. “Innovation and disruption are ideas that originated in the arena of business,” she writes, “but which have since been applied to arenas whose values and goals are remote from the values and goals of business.”
Yet the truth is that the one area where the ideas of philanthropy and business genuinely intersect is in their efforts to invent and promote new ways of doing things. Foundations surely need not apologize for trying to learn from successful businesses the best ways to promote changes in education, health care, nutrition, or conservation. And at least among strategic foundations, the changes they seek surely are “disruptive” in Professor Christensen’s sense, at least some of the time: they frequently seek not merely to improve the way this or that social function is carried out, but to replace the status quo altogether, with fundamentally new methods that will render current ways of doing things obsolete.
Whether it’s realistic or not, foundations that pursue new sources of energy, forms of pedagogy, methods of medical treatment or of paying for care, ways of mobilizing latent constituencies — all the great causes on the farther horizons of social change — are looking to peddle something new but embryonic, probably rough-edged and of unproven potential, in a marketplace locked into traditional practices guarded by entrenched interests. That is an essentially “disruptive” model, straight out of Mr. Christensen’s analysis. As I have written elsewhere, a few foundations have explicitly embraced this idea, with money and staff dedicated to applying the Christensen playbook.
It’s possible that, whatever judgment history renders on “disruptive innovation” as a theory of business competition, the one place where it truly fits is in strategic philanthropy. As always, it would be great to hear from others — including our colleagues in the Business School — about whether that idea strikes them as right.