Disruption: definition and state of play

Being innovative is no longer enough. You have to be disruptive. But disruptive in which sense exactly?

Does it mean showing you are a rebel taking on an established business on its own ground? Does it mean being visionary enough to spot the large movements while they are still weak signals? Or does it mean being an iconoclast who questions the assumptions your clients and competitors have accepted without examining them?

A considerable confusion still surrounds this word. Being disruptive has come to mean demonstrating that you belong among the rebellious founders battling the empire of established firms, and borrowing a little of the aura attached to a handful of famous technology companies.

Used indiscriminately for long enough, disruption has become an empty buzzword, drained of meaning and force in the way sustainable development, artificial intelligence and neuroscience have all been drained before it. Clayton Christensen, who popularised the concept, has come close to agreeing that it has become a cliche.

Behind the word sit several definitions and approaches that compete, complement each other or actively conflict, and there are guardians of the temple involved. Any useful disruption definition therefore has to be an account of what has happened to the word rather than a single sentence.

The explanation for the whole mess is that the word was inverted. It originally named something going wrong, and business turned it into something to aim for.

What the word meant	What was done to it	Where it has ended up
A fault, reportedAny disruption definition has to start with the original sense. In electricity and nuclear physics the word names the sudden onset of instability, and in ordinary English it names an interruption to something that was working. It described a problem.	Inverted into an ambitionBusiness took a word that reported a malfunction and made it a compliment. That inversion removed the constraint the original meaning carried, since nobody can aspire to a fault, and once the word became desirable every user could stretch it towards whatever they were already doing.	Owned, narrowed and stretched at onceThree traditions now compete. One is a registered methodology and cannot circulate freely. One is defined so tightly by its author’s own criteria that very few cases qualify. One is so broad it means any technology trend. The word conveys almost no information in a board paper.

What the word meant before business took it

The etymology is not decoration here. It explains the entire subsequent confusion, and it takes two minutes.

An electrical fault and a nuclear instability

Disruption did not wait for the twenty-first century to be used. It began as a technical term in electricity and is now used in nuclear physics to describe the sudden appearance of instabilities inside a confinement chamber.

In that context the word has one job, which is to report that something has gone wrong. A disruption in a fusion reactor is not an achievement anybody is aiming at. It is the event the entire design exists to prevent.

Which gives the first useful observation about the business version. In every technical field that used the word first, disruption is bad news, and the people using it were reporting a failure rather than announcing a strategy.

The everyday English meaning

In ordinary English the word describes the interruption of the normal course of an activity or a process. The sense is the same as the technical one, which is to say disruption equals problem.

Disrupt a class at school and you have a good chance of finding yourself outside the principal’s office. Disrupt a flight schedule, a supply chain, a court hearing or a surgical list, and nobody involved treats it as an accomplishment worth putting on a slide.

That everyday sense is still the dominant one everywhere outside business, which is worth remembering when a strategy document uses the word approvingly in front of an audience that has spent the week dealing with disruptions to a rail line.

The inversion, and what it removed

Somewhere between the physics and the pitch deck, the word turned over. It stopped naming something that happens to you and started naming something you do, and it stopped being a warning and became a compliment.

Words change meaning constantly and complaining about that is usually a losing position, so the point here is narrower. This particular shift removed a constraint rather than simply moving a sense along.

While disruption named a fault, its use was checked by the fact that nobody can aspire to a malfunction. You either had one or you did not. Once it named an ambition, that check disappeared, and every user could stretch the word towards whatever they were already doing and call it strategy.

Which is the whole state of play in one sentence, and everything that follows is the detail of who stretched it, in which direction, and how far.

One consequence deserves stating before the detail. A word that reports a fault tells you where to look, because a fault has a location, a cause and somebody responsible for it.

A word that names an ambition tells you nothing about any of those. Which is why an organisation announcing that it intends to be disruptive has said less about its plans than one announcing that its supply chain has been disrupted, and the second sentence is the one people act on.

The first tradition, a registered creative method

The earliest business use, and its author has worked hard to keep it that way, arrives in advertising rather than in economics or engineering.

Schumpeter and creative destruction

The intellectual ancestor is Joseph Schumpeter, who set out creative destruction in Capitalism, Socialism and Democracy in 1942, while refining a theory of economic cycles he believed were driven directly by technological innovation.

In his view of capitalism, the innovations created by entrepreneurs are the disruptive forces that fuel economic growth, even at the cost of destroying the value of established businesses enjoying a technological, legal, organisational or economic monopoly.

Worth noting that Schumpeter was pessimistic about how long the process could last, since he thought it would eventually saw off the branch capitalism was sitting on. That pessimism is absent from every subsequent business use of his idea, which tends to quote the destruction and skip the conclusion.

I have written separately on how creative destruction and disruption differ, since treating them as the same thing is one of the commoner errors in this area.

The advertisement and the book

The business arrival can be dated precisely. On 21 May 1992 the agency BDDP, which became TBWA in 1998, published a full page in the Wall Street Journal headed Disruption, presenting the creative destruction process the agency used with its clients.

Four years later Jean-Marie Dru, who led BDDP at the time, published the book he has since reminded the world was the first to carry the word in its title: Disruption, Overturning Conventions and Shaking Up the Marketplace.

In a later book he explains that he began using disruption as an English rendering of the French stratégie de rupture, and that he was initially uncomfortable doing so precisely because the word carries a negative connotation in English. He was right to be uncomfortable, and he used it anyway.

What the method actually asks

The method itself is a creative discipline in three steps. By the agency’s own description it identifies the conventions operating in a market, defines a vision, then builds a strategy that breaks the convention.

The convention is challenged with a single question, what if, and the vision is meant to produce products and services that are radically innovative. Radical is the important word in that sentence, and it is the reason this tradition and the next one are not describing the same activity.

In practice it looks like listing what every competitor in a category takes for granted, then asking what if of each item until something interesting survives. That is a workshop technique rather than an economic mechanism.

A word that is legally owned

Here is the fact that distinguishes this tradition from every other term in management, and it is public rather than obscure. Disruption is a registered trademark, held in France since 1992 and registered in more than fifty countries, attached to the agency’s creative methodology.

As the French communications executive Nicolas Bordas has explained, the registration is not used to prevent the use of the word itself. It exists to protect the creative methodology and to avoid confusion with other methods that might find it convenient to adopt the same name.

Take that seriously for a moment. One of the most used words in twenty-first century management strategy is a registered mark belonging to an advertising agency that most of the people using the word have never heard of, attached to a methodology most of them have never read, in connection with a book most of them do not know exists.

Which is the first tradition’s position in the state of play. It has a precise meaning, a documented method and a legal owner, and it cannot circulate as a generic term because circulating freely is the one thing a protected mark is designed to prevent.

Why an advertising agency got there first

Worth pausing on the fact that the first business use of this word came from advertising rather than from strategy, engineering or economics. That is not a coincidence and it explains what the method is good at.

An agency spends its working life looking at categories from outside. It arrives with no operational stake, it works across unrelated industries in the same week, and its entire commercial value rests on noticing what everybody inside a category has stopped noticing.

Which is exactly the position required to see a convention. The people inside a business cannot see their own rules, because to them the rules are simply how the work is done, and that is a description of expertise rather than a failing.

The corresponding limitation is equally structural. A method built for changing how a market perceives a brand is not built for deciding whether a business can survive a competitor with a lower cost base, which is the question the second tradition exists to answer.

The second tradition, an economic theory

Following the chronology, we arrive at the person who popularised disruptive innovation across the world, to the point of exhausting everybody. Clayton Christensen took the word in a completely different direction three years later.

What Christensen actually argued

Working from a body of case analysis, the Harvard professor set disruptive innovations against sustaining ones. The account he published with Joseph Bower in Harvard Business Review describes a new entrant challenging an established firm by arriving with a product that is inferior in quality, functionality and price.

The mechanism requires both a technological innovation and a business model innovation, which is a detail almost always dropped in the retelling. One without the other does not produce the effect he described.

The incumbent’s difficulty is not that it is badly run. Even a well-managed and well-regarded business gets trapped by the complexity of its own offer, accumulated year after year through continuous improvement driven by listening carefully to its best customers.

Summarised, the theory rests on the idea that disruptions are technologies allowing something simpler to use, easier to buy and cheaper than what the established players offer, and that in doing so they transform business models.

The four conditions

Over time Christensen enclosed what he considered a genuine disruptive innovation inside increasingly precise criteria. Four conditions have to hold.

1. The innovator offers a lower price and lower performance service, or creates a new market by targeting customers who cannot afford or cannot use the existing offer.
2. This produces asymmetric motivation, meaning that even where the new entrant intends to move upmarket, the incumbents have no incentive to fight on that ground.
3. The service improves its performance fast enough to keep meeting its customers’ expectations while remaining agile on a low cost structure.
4. It creates new value networks, including new distribution and sales channels.

Read those four together and something becomes obvious. This is a narrow definition describing a specific competitive sequence, and the overwhelming majority of things called disruptive fail at least one of the conditions.

Which is not an accident of drafting. The narrowness is the theory, because a mechanism that explains everything explains nothing, and Christensen spent years tightening rather than loosening it.

Where the theory has been challenged

The approach has been handled roughly in recent years and some of the criticism lands. The most quoted objection is internal: by the terms of the theory, with the company an incumbent in its own market, one of the most successful product launches in commercial history should have failed.

The most damaging test is quantitative rather than rhetorical. Andrew King and Baljir Baatartogtokh took cases Christensen himself presented as disruptive and checked them against his published criteria. Reviewing seventy-seven such cases, they concluded that around nine per cent fitted all of the theory’s key elements.

Note what that finding does and does not say. It does not show the mechanism is imaginary. It shows the phenomenon is rare and that the label has been applied far beyond the cases it fits, including by the theory’s own supporters.

The theory was also extended by Larry Downes and Paul Nunes, whose big bang disruption describes an adoption pattern brutal enough to bend the familiar curve. Instead of running from early adopters through to laggards, adoption forms something closer to a shark fin, in which even the reluctant arrive almost immediately.

So the second tradition’s position in the state of play is this. It has a precise meaning, a testable set of criteria, and a body of evidence suggesting that almost nothing described by the word actually meets them.

The third tradition, disruption as a trend

Then comes the third episode, and with it the newer speakers, experts of every description and consultants who took the subject over while frequently confusing it with a different word altogether, which is trend.

How the word became a synonym for technology

In this reading a disruption is a technology trend that will bring about a change in society. A trend that is coming for your industry, your business model or your job.

It matches a substantial quantity of white papers from strategy consultancies, from global institutions and from communications and technology advisory firms, several of which have concluded independently that disruption is essentially digital.

They all take disruptions to be technologies that move from weak signal to heavy trend so quickly that businesses, including the very largest, have no time to prepare. Think artificial intelligence, think social platforms, think three-dimensional printing, think virtual reality, think the end of salaried employment.

Notice that this reading has abandoned both earlier meanings. There is no convention being broken, and there is no underserved customer being served badly and cheaply. There is only a technology arriving, which is a description of the weather rather than of a strategy.

It is worth being fair about why this reading spread so fast. It is genuinely easier to sell, since a room will pay attention to a threat it cannot control for longer than it will pay attention to a competitor with a lower cost base.

It also asks nothing of the audience. A convention has to be found, and an underserved segment has to be identified and served at a margin nobody enjoys. A technology arriving requires only that everybody agree it is arriving, and the agreement itself feels like progress.

Which is why this is the version most executives have met, and the version they are most likely to reach for when explaining their own strategy to a board.

Three limits on that reading

Three problems undermine it, and the first is simply that the predicted paralysis rarely arrives.

The stunning of large companies turns out to be limited and temporary. Established hotel groups were supposed to be flattened by online booking platforms and were not. Ethical smartphone manufacturers were supposed to unseat the incumbents and did not come close.

The second is that a great many of these disruptive trends are currently sitting in the disillusionment phase, the third stage of Peter Diamandis’s model of exponential technologies, where the capability exists, the excitement has passed and the application has not yet been found.

The third is a matter of scope. If Christensen’s approach is very narrow, this one is far too broad, wider even than the fifteen disruptions catalogued in Dru’s most recent book. A definition that accommodates every technology movement of the past two decades has stopped doing the work a definition exists to do.

What disruption has actually done in Australia

Theory is easier to argue about than evidence, so it is worth asking what the word has described accurately in this country. The pattern is instructive, because the industries confidently listed as about to fall and the industry that genuinely changed are not the same list.

The industries that were supposed to fall

Australian retail was going to be dismantled by the arrival of a global online marketplace. The major chains were described as defenceless, the timeline was short, and the language was the language of the third tradition, meaning a technology arriving faster than anybody could prepare for.

What happened instead was slower and less dramatic. The incumbents built their own logistics and online channels, several of them well, and the market rearranged rather than collapsed. Some categories moved substantially and the sector did not fall over.

Banking produced a clearer version of the same lesson. A wave of new digital entrants arrived describing themselves as disruptors of an industry dominated by four large institutions, and within a few years several of them had returned their deposits and surrendered their licences, or been acquired by the very incumbents they were displacing.

Read those against Christensen’s four conditions and the failure is legible in advance. Most of the entrants offered a better experience at a similar price to the same customers the incumbents already wanted, which is competition rather than disruption, and the incumbents were therefore highly motivated to respond. The asymmetric motivation the theory requires was never present.

The one that genuinely changed

Point-to-point transport is the Australian case that fits. Ride-booking platforms did not attack the taxi industry at its most profitable end. They served trips that were awkward to get served, in areas and at times where a taxi was hard to obtain, at a price and with a convenience the existing structure could not match.

The incumbents were structurally unable to respond, because their economics were tied to a licensing system whose value depended on scarcity. Defending the licence and competing on availability were incompatible objectives.

The clearest evidence that something real occurred is that Australian state governments legislated, established regulatory frameworks for the new category, and set up arrangements to compensate licence holders whose asset had lost its value. Governments do not build compensation schemes for a trend.

What the pattern tells you about the third reading

Set the three cases together and the third tradition’s weakness becomes visible. It predicted retail and banking, where the incumbents held, and it had no particular view about point-to-point transport, where they did not.

The reason is that a reading built on technology cannot distinguish between a new capability that incumbents can adopt and one that their structure prevents them from adopting. Online retail and digital banking were both available to the established players. A licensing system whose value rests on scarcity is not something an incumbent can simply choose to abandon.

Which is the practical case for keeping the narrow definition even though almost nothing meets it. A theory that correctly identifies one case in ten is more useful than a description that accommodates everything and predicts nothing.

It also explains why the trend reading persists despite its record. Naming a technology requires no analysis of anybody’s cost structure, incentives or regulatory position, and it produces a presentation considerably faster.

The state of play, and which reading is being used on you

Put the three traditions side by side and the situation resolves. They are not competing definitions of one thing. They are three separate objects wearing the same word, each in a different condition.

Three traditions compared

Read the last column before the others, because the condition of each tradition explains why the word behaves as it does in an ordinary conversation.

Tradition	What it describes	What it asks you to do	Current condition
The creative method	A convention the whole category obeys without examining it	Identify conventions, ask what if, build a vision that breaks one	Precise, documented, and legally owned, so it cannot circulate as a generic term
The economic theory	A new entrant serving customers the incumbents decline, cheaper and simpler	Find an underserved segment and accept low margin while you improve	Precise, testable, and applied far beyond the cases that meet its four conditions
The trend reading	A technology moving from weak signal to heavy trend faster than firms adapt	Watch the technology and prepare, somehow	Broad enough to accommodate any movement, which is why it generates alarm rather than decisions

Three conditions, three different problems. One word cannot be simultaneously owned, narrow and infinitely elastic without losing the ability to carry information, which is exactly where it has arrived.

Which is why the word now functions as a signal about the speaker rather than as a claim about the market. Hearing it tells you something reliable about who is talking and almost nothing about what they intend to do.

Which reading is being used on you

The practical value of all this is diagnostic rather than academic. When somebody uses the word at you, three questions establish which tradition they are in, and none of them requires you to be rude about it.

1. Which convention are we breaking? An answer names a rule the whole category obeys, and that is the creative method.
2. Which customers are we serving that we currently turn away? An answer names a segment and a price point, and that is the economic theory.
3. What would we do differently on Monday? If the answer describes a technology rather than a decision, you are in the trend reading and there is nothing underneath it.

Most speakers, papers and strategy documents will fail all three, which is the finding rather than a criticism of anybody in particular. The word has been doing decorative work for so long that its users have stopped expecting it to answer questions.

There is a fourth question worth holding in reserve, and it is the one that settles an argument fastest. Ask what would have to be true for this not to be disruption.

A claim in the first two traditions can answer that, because both have conditions. The convention might turn out to be a genuine constraint rather than an unexamined habit. The incumbents might turn out to be highly motivated to defend the segment, which removes the asymmetry the theory requires.

A claim in the third tradition cannot answer it at all, since a technology arriving quickly is compatible with every possible outcome. Which is the practical test for whether you are being given an analysis or an atmosphere.

My own preference is to stop using the word as a strategy in its own right and name the practices separately, which I have set out in the comparison of disruptive and breakthrough innovation. Where change actually originates is a separate question again, covered in the seven sources framework.

How I can help you settle the vocabulary

Almost nobody I work with needs a definition delivered from a stage. They need their own leadership team to discover that it has been using one word for three different intentions, which is faster to demonstrate than to explain.

Keynotes and workshops

Keynotes on this run the definition exercise from the field note live, which takes four minutes and changes the temperature of the rest of the session. A room that has watched itself disagree listens differently.

Workshops go further and apply the three questions to whatever the organisation currently has in its innovation portfolio. The usual finding is that one funded programme is in a different tradition from the one its business case assumed.

Diagnostics and programs

The diagnostic establishes whether your structure could carry the kind of work you have named, since funding thresholds and margin tests decide more of this than vocabulary does.

Longer programs work on the conditions rather than the terminology, and there is a set of tools for reading which state of disruption a market is actually in, covered in the states of disruption tool.

If you want to test any of this, a conversation beats a proposal. You can tell me which of the three readings your last strategy paper used, and we can usually work it out from one paragraph.

Conclusion: a word that reported a fault

Any honest disruption definition has to begin by admitting there are three of them. A registered creative methodology built on breaking conventions, an economic theory with four testable conditions, and a loose synonym for a technology arriving quickly.

They disagree because the word was inverted before any of them got to it. In electricity, in nuclear physics and in ordinary English, disruption reports that something has gone wrong, and business turned it into something to aspire to.

That inversion removed the only constraint the word ever had. Nobody can aim at a malfunction, so while disruption named a fault it could not be stretched. Once it named an achievement, every user could pull it towards whatever they were already doing.

Which is why the state of play matters more than the definition. Ask which convention is being broken, which customers are being served that you currently decline, and what anybody would do differently on Monday. If none of those has an answer, the word in front of you is decoration, and it was originally a warning.

Frequently asked questions about disruption