Disruptive Innovation on Technology Firms



Number of words: 242

In the mid-1990s, Harvard Business School professor Clayton Christensen received a call from Andy Grove, the CEO and chairman of Intel. Grove had encountered Christensen’s research on disruptive innovation and asked him to fly out to California to discuss the theory’s implications for Intel. On arrival, Christensen walked through the basics of disruption: entrenched companies are often unexpectedly dethroned by start-ups that begin with cheap offerings at the low end of the market, but then, over time, improve their cheap products just enough to begin to steal high-end market share. Grove recognized that Intel faced this threat from low-end processors produced by upstart companies like AMD and Cyrix. Fueled by his newfound understanding of disruption, Grove devised the strategy that led to the Celeron family of processors—a lower-performance offering that helped Intel successfully fight off the challenges from below.

There is, however, a lesser-known piece to this story. As Christensen recalls, Grove asked him during a break in this meeting, “How do I do this?” Christensen responded with a discussion of business strategy, explaining how Grove could set up a new business unit and so on. Grove cut him off with a gruff reply: “You are such a naïve academic. I asked you how to do it, and you told me what I should do. I know what I need to do. I just don’t know how to do it.

Excerpted from page number 164-165 of “Deep Work” by Cal Newport.

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