At last month’s Cannes Lions festival, I had the privilege
of participating in a session with advertising legend Chuck Porter on “building
new strategies for creative excellence.”
The session was organized by the Berlin School of Creative Leadership around
the contrast between strategic insights drawn from the successful creative work
of his agency, Crispin Porter + Bogusky, and more orthodox strategic approaches
associated with Harvard Business School Professor Michael E. Porter (no
relation). In preparation, my Berlin
School colleague, Professor Paul Verdin, and I had drafted a White Paper on the
topic.
The session and paper yielded several conclusions about new
priorities for building strategy for creative excellence. For example, while acknowledging the greater need
for flexibility and speed in decision-making today, we identified the persisting
importance of making adaptive commitments to brand values and strategic
priorities. Likewise, we identified
other crucial principles: serving communities of participation, building trust
through storytelling, and finally recognizing accumulative value creation
rather than pursuing competitive advantage for strategic success. Overall, we proposed a fundamental shift from
the traditional, largely adversarial orientation focused on competitors to an
emphasis on value creation through the engagement of customers.
In doing so, the White Paper picked up on several currents
of thought about the evolution of strategy.
Customer-centricity, involving better understanding and engagement of
customers as well as enhancing capabilities for serving customers, is one such
stream. Another is the transformation of
traditional value chain and scale economies by digital technologies and an
information economy whose creation, distribution, and transaction costs have an
entirely different structure. Perhaps
best-known, to use the title of Rita Gunther McGrath’s 2013 book, is “the end
of competitive advantage.” Rather than
achieving a long-term, stable and sustainable market position in a well-defined
industry, following Michael Porter, the new world of strategy is marked by
developing a portfolio of transient advantages able to capture shifting
“connections between customers and solutions.”
At same time as the Cannes festival, another debate around
innovation and disruption began roiling.
Jill Lepore, a professor of history at Harvard (in the Faculty of Arts
and Science, not Business School), published a withering piece on the
contemporary “gospel of innovation” in The New Yorker. “The Disruption Machine” took on the
prevailing model of disruptive innovation associated with Clayton Christensen,
another Harvard Business School faculty member.
His theory contends that while an incumbent firm seeks to maintain its market
advantage through sustaining, or incremental, technological innovations, it is
often overtaken by new entrants whose disruptive innovations, typically offered
at lower-cost and with lower-performing technologies, end up remaking the
market and leading to the failure of the incumbent firm. Lepore alleged the theory, which she
extracted primarily from Christensen’s groundbreaking 1997 The Innovator’s
Dilemma, mistakenly explained the emergence of new technologies and the dynamics
of firms. In doing so, she also
personalized the critique by questioning the integrity of his research and his
claims about the theory’s ability to predict market failures. In a Bloomberg BusinessWeek
interview, Christensen responded briefly and quizzically both about the
personal nature of the attack and the lack of actual difference in their
questioning of innovation.
Much commentary and side-taking has ensued. Many pieces noted how “disruption,” in
particular, had become an overused shorthand for innovation-driven (some would
say, -fixated) entrepreneurs and businesses.
On Vox.com, for instance, Timothy B. Lee’s post was tellingly titled,
“Disruption is a dumb buzzword. It’s
also an important concept.” Kevin Roose similarly wrote on nymag.com that,
“for actual disruption to work best,‘disruption’ has got to go.” Some comments took on the larger state of innovation in
both business and management studies. In
the Financial Times, Andrew Hill thus made the case for a more measured
use of the theory of disruption, citing its relevance to analyzing corporate
failures like Kodak and Blackberry.
While Christensen has understandably been at the heart of many
of these discussions, Michael Porter’s place has also been important. On Forbes.com, Stephen Denning wrote
that Lepore had been “the assistant to the assistant of Porter” and he then
cast her attack in terms of the conflicting views of Porter and Christensen. Specifically, this meant distinguishing the
strategic goals of maximizing shareholder value and creating and maintaining
customers. The recent imbroglio around
disruption is a “symptom,” in Denning’s word, of a more far-reaching debate
around core assumptions of contemporary management and business.
In fact, among the most important lessons of the Lepore-Christensen
exchange seem precisely the value of reflecting on and wrestling with one’s own
guiding principles and assumptions in business leadership. That lesson was also a basis of the Porter
vs. Porter White Paper and Cannes session.
Such questioning can include:
1. Language
Too often, as with “disruption,” we use or overuse language
without fuller explanation or understanding.
Sometimes context is lacking. For
those in creative and marketing communications, for instance, Jean-Marie Dru,
now the Chairman of the TBWA Worldwide advertising agency, developed the
distinct concept and specific creative methodology of “disruption” at the same
time as Christensen in the mid-1990s. More generally, as I wrote in a recent post,
we don’t take adequate care in our everyday usage of key words like innovation and
creativity to ensure clear and effective communication of their meaning in
given situations.
2. Assumptions and Contexts
If the language around disruption or innovation would benefit
from greater care and precision of usage, the assumptions underpinning that
language can likewise have greater impact when more fully understood. This is not to suggest, of course, that any
discussion of innovation should revert to exploring the finer points of
Christensen’s (or Porter’s) research. It
is, however, to posit the value of stepping back and assessing the larger ideas
behind, or wider implications of, specific potential decisions, actions or
strategies. Some of the best
commentaries on Lepore and Christensen, like John Hagel’s, are illuminating exactly
because they analyze seemingly familiar ideas more acutely and pose bigger
questions.
3. Beyond Prediction
One of Lepore’s major critiques in “The Disruption Machine”
is how poorly Christensen’s model predicts business success or failure due to
disruptive innovation. Similarly, in the
Cannes session, Chuck Porter observed how our White Paper about his agency’s
creative work amounted to “backfilling” explanations for earlier strategic and
creative work that may not be practically useful going forward. Any prediction or forecasting for an
increasingly uncertain future is obviously challenging. Yet predicting the future is not the only
standard or purpose for analyzing and modeling the past. Even more, as Lepore herself allows (in
quoting a recent New York Times report on innovation), “disruption is a
predictable pattern across many industries” – patterns being a matter of deeper
understanding and far different from concrete predictions about future performance
at specific firms.
4. Models and
Theories – and Learning
The distinction is essential. As an educator who uses historical cases and models,
my priority is often to connect particular examples to wider patterns. However, the purpose in doing so is not the
connections themselves but to help build individuals’ capacities for effective
analysis and action. Those capacities
are enabled by learning multiple examples and experiences, models and patterns,
and developing the discernment and agility to use them, as appropriate, to
make sense of different situations and contexts. Models and theories, like that of disruptive
innovation, are always only potential means for conducting analyses. Rather than ends in themselves, we should look
to them to help us improve our thinking, sharpen frames of reference, and
ultimately serve as aids to better understanding, decisions, and
problem-solving.
