Monday, August 17, 2015

The odd combination of Hillary Clinton, Donald Trump, and Clayton Christensen: who has disruptive technology?

An interesting post at the Daily Beast by Jonathan Alter manages to include Hillary Clinton, Donald Trump,
and Clayton Christensen in a single paragraph:

To do that, Hillary needs to take more risks, as Trump learned from the business world.
Clayton Christensen of the Harvard Business School argues that by abstaining from certain risks,
businesses actually invite greater risk. (For example, marketing plans without healthy uncertainty
built in are destined to under-perform.) The same applies to Hillary going weeks on end this summer
without answering questions. That defensive crouch put her at greater risk than being out there for
constant scrutiny—a scrutiny that occurs whether she talks to the press or not.


In his book, Innovators Dilemma, Christensen points out that established firms need to evaluate "disruptive
technologies" (which involves risk) to avoid being overtaken by the newer, smaller firms pushing them.


One does not, however, undertake risk without a plan.

Whether Alter is suggesting Hillary adopt Bernie's transparency is not clear:

Hillary’s problem is not the emails story itself, but her response to it, which has been halting and defensive. The reason so many voters don’t trust Hillary is she doesn’t trust them. Trust is reciprocal. If she trusted the public more, she would be mixing it up in the media more, like Trump, and betting that the public will eventually sort out the truth. Hillary is taking a 1990s control freak approach to a media environment that is fundamentally uncontrollable. She has aides and supporters defending her instead of vigorously making her case to all comers. Trump knows that you have to assert yourself every day and counter-attack to stay on top of the story.

Of Christensen, see also

[Christensen has explicitly discussed models for law firms!]

Note: Clayton Christensen and the Innovator’s Dilemma for Lawyers

Christensen’s views have been applied to the legal industry by others — "Disrupting Conventional Law Firm Business Models Using Document Assembly" –and several years ago he authored a white paper on "Transforming Legal Services," in which he notes that law firms have been able to successfully make outsize profits –40% on average for the AmLaw 100, or roughly twice the average margin of the country’s 100 largest publicly-traded corporations–without updating their product or their business model. He warned, though, that that success was unlikely to continue:

"In the parlance of disruptive innovation theory, corporations are ‘over-served’ when they pay top-firm rates for routine matters… Corporations have reacted by fragmenting their legal spend… For the leading law firms, fragmentation means loss of market share."

"Over-served" resonates with the repeated warnings coming from a number of sectors these days (including us) of over-capacity in the legal industry. Christensen’s theory predicts that firms may flee upmarket trying to make up the revenues and margins lost to the disruption rising from below, a strategy that he says rarely succeeds. Similarly law firms, most famously and recently Dewey & LeBoeuf, have tried to bolster sagging revenues by bringing on board high-profit "stars" to bulk up the top-end of business while continuing to lose their bread-and-butter work to alternative providers. A strategy that has often failed.

One of Christensen’s long-standing points is that strategic planning must be focused on the steps to be taken now that will keep companies on the best long-term trajectory. He says too many companies take the easy step–increasing immediate high-margin business, for example–which leads to another easy step, until the strategic plan is simply the one of least resistance to short-term profits. But one which doesn’t grapple with the hard analysis of what the demand of the future is likely to be and how to change the business model to meet that.


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