WEBVTT 00:00:00.000 --> 00:00:02.660 Welcome back to The Deep Dive. Today, I want 00:00:02.660 --> 00:00:04.759 to start with a bit of a visual. OK, let's hear 00:00:04.759 --> 00:00:08.820 it. I want you to picture a man walking into 00:00:08.820 --> 00:00:11.699 a room. And the very first thing you notice about 00:00:11.699 --> 00:00:13.699 him, well, before he even opens his mouth or 00:00:13.699 --> 00:00:15.640 before you know anything about his brain, is 00:00:15.640 --> 00:00:17.519 that he has to literally duck to get through 00:00:17.519 --> 00:00:19.800 the doorway. Right, because he was just a massive 00:00:19.800 --> 00:00:22.800 guy, a literal giant. Exactly. Six feet, eight 00:00:22.800 --> 00:00:26.460 inches tall. That's 2 .03 meters for anyone using 00:00:26.460 --> 00:00:29.100 the metric system. Just a towering figure. Yeah. 00:00:29.280 --> 00:00:31.260 And usually, you know, when you see someone that 00:00:31.260 --> 00:00:33.159 size, your brain automatically goes to the NBA. 00:00:33.420 --> 00:00:35.039 Yeah. You don't usually think Harvard Business 00:00:35.039 --> 00:00:37.039 School professor. No, you think center forward, 00:00:37.320 --> 00:00:40.299 right? Not academic theorist. But today, we are 00:00:40.299 --> 00:00:45.299 diving into a man who is a giant in, honestly, 00:00:45.460 --> 00:00:48.539 both of those senses. We are unpacking the life 00:00:48.539 --> 00:00:51.880 and the mind of Clayton Christensen. Such an 00:00:51.880 --> 00:00:53.920 important figure. Really is. I mean, if you spent 00:00:53.920 --> 00:00:56.079 even five minutes in the business world or working 00:00:56.079 --> 00:00:58.179 in tech or even just reading the news over the 00:00:58.179 --> 00:01:01.259 last 20 years, you definitely know his vocabulary. 00:01:01.380 --> 00:01:03.259 You know the words he gave us. For sure. You 00:01:03.259 --> 00:01:06.099 hear disruption or disruptive innovation all 00:01:06.099 --> 00:01:08.659 the time. The buzzwords. To end all buzzwords, 00:01:09.260 --> 00:01:11.219 I feel like disruption is thrown around so much 00:01:11.219 --> 00:01:13.599 now that it can be anything from like my Uber 00:01:13.599 --> 00:01:16.640 is running late to just a new flavor of potato 00:01:16.640 --> 00:01:18.760 chip. And that drove him absolutely crazy. It 00:01:18.760 --> 00:01:21.159 really did. Because Clayton Christensen was a 00:01:21.159 --> 00:01:24.640 very precise thinker. He wasn't some tech hype 00:01:24.640 --> 00:01:27.719 man. He was a rigorous academic and a deeply 00:01:27.719 --> 00:01:30.579 religious man and a former CEO who was trying 00:01:30.579 --> 00:01:33.599 to solve a very specific puzzle. And when people 00:01:33.599 --> 00:01:36.959 use disruption to just mean change or chaos or 00:01:36.959 --> 00:01:39.739 just something cool and new, it totally diluted 00:01:39.739 --> 00:01:41.859 the actual warning he was trying to give people. 00:01:42.280 --> 00:01:44.640 So that is our mission today. We are going to 00:01:44.640 --> 00:01:46.819 reclaim that word. I love that. Yeah, we're going 00:01:46.819 --> 00:01:49.060 to look at our source stack, which today includes 00:01:49.060 --> 00:01:51.780 his biography, his major publication history, 00:01:51.819 --> 00:01:54.340 and basically the collected records and summaries 00:01:54.340 --> 00:01:56.640 of his life and career. A lot of really rich 00:01:56.640 --> 00:01:59.859 material there. So much. And we're using all 00:01:59.859 --> 00:02:02.659 of that to move beyond the business jargon and 00:02:02.659 --> 00:02:04.819 understand what the innovator's dilemma actually 00:02:04.819 --> 00:02:07.400 is. Because it's not just a standard business 00:02:07.400 --> 00:02:10.900 theory. No, it's really a theory about why successful 00:02:10.900 --> 00:02:13.439 people and incredibly successful companies fail. 00:02:13.960 --> 00:02:17.240 And the crazy part is they fail precisely because 00:02:17.240 --> 00:02:19.680 they are doing everything exactly right. Right. 00:02:19.939 --> 00:02:21.719 That is the whole crux of it is the tragedy of 00:02:21.719 --> 00:02:23.819 good management. Exactly. But we're also going 00:02:23.819 --> 00:02:26.759 to look at the man himself because his actual 00:02:26.759 --> 00:02:30.919 life story is honestly is not at all what I expected 00:02:30.919 --> 00:02:32.659 when we started researching this. It really takes 00:02:32.659 --> 00:02:35.599 some wild terms. Right. We've got back -to -back 00:02:35.599 --> 00:02:38.560 basketball championships at Oxford. We've got 00:02:38.560 --> 00:02:41.759 a stint in the White House, a missionary gap 00:02:41.759 --> 00:02:45.419 year in Korea, and this really heartbreaking 00:02:45.419 --> 00:02:48.039 battle with his own mortality that eventually 00:02:48.039 --> 00:02:50.419 turned his whole... analytical lens onto the 00:02:50.419 --> 00:02:52.300 human soul. Right. His book, How Will You Measure 00:02:52.300 --> 00:02:54.680 Your Life? Exactly. So let's just jump right 00:02:54.680 --> 00:02:56.460 into it. Let's go all the way back to the beginning. 00:02:56.960 --> 00:02:58.599 Before he was the disruption guy, he was just 00:02:58.599 --> 00:03:01.139 a very tall kid growing up in Utah. In Rose Park 00:03:01.139 --> 00:03:02.800 specific. Which is a neighborhood in Salt Lake 00:03:02.800 --> 00:03:04.819 City, right? Yeah. He was born there on April 00:03:04.819 --> 00:03:09.419 6th, 1952. Clayton Meggleby Christensen. And 00:03:09.419 --> 00:03:13.300 Rose Park wasn't just a random dot on the map 00:03:13.300 --> 00:03:15.319 for him. It seems like it really shaped him. 00:03:15.449 --> 00:03:17.590 Oh, it definitely stuck with him. It was a very 00:03:17.590 --> 00:03:20.710 working class, very humble neighborhood. And 00:03:20.710 --> 00:03:23.310 he was the second of eight children. Eight kids, 00:03:23.590 --> 00:03:26.090 man. Yeah. That has to be a loud house. A very 00:03:26.090 --> 00:03:29.250 loud, incredibly busy house. His parents, Robert 00:03:29.250 --> 00:03:32.530 and Verda May, they ran a tight ship, but a very 00:03:32.530 --> 00:03:35.169 loving one. And you're totally right about Rose 00:03:35.169 --> 00:03:37.250 Park sticking with him. Yeah, because it's later 00:03:37.250 --> 00:03:39.629 on. Decades later, when he's this world famous 00:03:39.629 --> 00:03:42.469 guru and he starts his own venture capital and 00:03:42.469 --> 00:03:44.930 investment firm, he doesn't name it Christensen 00:03:44.930 --> 00:03:47.469 Capital or Disruption Ventures. He names it Rose 00:03:47.469 --> 00:03:50.009 Park Advisors. Exactly. He really wanted to remember 00:03:50.009 --> 00:03:52.289 exactly where he came from. I love that so much. 00:03:52.370 --> 00:03:55.930 It just grounds. So, okay, he's growing up in 00:03:55.930 --> 00:03:57.710 Salt Lake. He's hitting that six foot eight mark 00:03:57.710 --> 00:03:59.750 and naturally picks up a basketball. Right. He 00:03:59.750 --> 00:04:02.289 was a very serious athlete. He went to West High 00:04:02.289 --> 00:04:04.050 School where he was actually the student body 00:04:04.050 --> 00:04:06.229 president, but on the court he was just a total 00:04:06.229 --> 00:04:08.969 force. A leader everywhere. Yeah, and this sets 00:04:08.969 --> 00:04:11.090 up a pattern we are going to see again and again 00:04:11.090 --> 00:04:13.129 with him. He wasn't just the jock and he wasn't 00:04:13.129 --> 00:04:15.569 just the nerd. He was always both. Right. He 00:04:15.569 --> 00:04:18.529 always insisted on inhabiting these different 00:04:18.529 --> 00:04:21.449 worlds simultaneously. Which perfectly brings 00:04:21.449 --> 00:04:26.980 us to 1970, high school graduation. and really 00:04:26.980 --> 00:04:30.319 the first massive decision of his life, the whole 00:04:30.319 --> 00:04:32.540 college application process. And this is where 00:04:32.540 --> 00:04:35.100 we really get the first clear glimpse of his 00:04:35.100 --> 00:04:37.620 character, because he applies to the big guns, 00:04:38.459 --> 00:04:42.779 Harvard, Yale, and Brigham Young University, 00:04:43.019 --> 00:04:45.290 DYU. OK, let's stop there for a second. Because 00:04:45.290 --> 00:04:47.810 if you are this ambitious, brilliant kid in 1970, 00:04:48.230 --> 00:04:50.730 and you get a fat acceptance envelope from Harvard 00:04:50.730 --> 00:04:53.649 and from Yale, you just go, that is the golden 00:04:53.649 --> 00:04:55.810 ticket. That's the established path to the Senate 00:04:55.810 --> 00:04:58.089 or Wall Street or the Supreme Court. Conventionally, 00:04:58.170 --> 00:04:59.629 yeah, it's a total no -brainer. But you have 00:04:59.629 --> 00:05:02.250 to understand, Christensen was a very devout 00:05:02.250 --> 00:05:04.389 member of the Church of Jesus Christ of Latter 00:05:04.389 --> 00:05:06.209 -day Saints. His faith wasn't just a background 00:05:06.209 --> 00:05:08.410 thing for him. Not at all. It was the operating 00:05:08.410 --> 00:05:10.529 system of his entire life. So how does a guy 00:05:10.529 --> 00:05:12.509 like that decide? I mean, does he make a pros 00:05:12.509 --> 00:05:14.449 and cons spreadsheet? He might have made it. 00:05:14.279 --> 00:05:17.180 made a spreadsheet knowing him. But the final 00:05:17.180 --> 00:05:20.899 decision was to use his own words, a matter of 00:05:20.899 --> 00:05:23.560 prayer. Wow. He prayed about it, and he felt 00:05:23.560 --> 00:05:26.730 this distinct, clear impression. that he needed 00:05:26.730 --> 00:05:29.230 to go to BYU. Even though Harvard's Harvard. 00:05:29.649 --> 00:05:32.730 To be fair, BYU did offer him a full scholarship, 00:05:32.889 --> 00:05:34.910 the Kimball Scholarship, which certainly didn't 00:05:34.910 --> 00:05:37.670 hurt. But he turned down the Ivy League because 00:05:37.670 --> 00:05:40.910 he genuinely felt a spiritual mandate to be in 00:05:40.910 --> 00:05:43.129 Provo, Utah. And looking back at the sources, 00:05:43.350 --> 00:05:45.689 it's not like he suffered intellectually for 00:05:45.689 --> 00:05:48.310 it. I was looking at who was sitting in his freshman 00:05:48.310 --> 00:05:51.019 economics class, and it's actually. It's kind 00:05:51.019 --> 00:05:53.980 of insane. Oh, it's a literal who's who of modern 00:05:53.980 --> 00:05:56.579 American leadership. You have Clayton Christensen 00:05:56.579 --> 00:05:59.439 in one seat. In another seat, you have Mitt Romney, 00:05:59.620 --> 00:06:01.339 who obviously would go on to run for president 00:06:01.339 --> 00:06:03.439 of the United States. Right. And in yet another 00:06:03.439 --> 00:06:05.639 seat, you have Kim B. Clark. Who later became 00:06:05.639 --> 00:06:08.519 the actual dean of Harvard Business School. Exactly. 00:06:08.620 --> 00:06:10.959 So you have these three future titans sitting 00:06:10.959 --> 00:06:15.740 in the exact same freshman econ one class in 00:06:15.740 --> 00:06:19.000 Provo. Wild. It's a pretty good argument that 00:06:19.000 --> 00:06:21.199 it's the student and not just the prestige of 00:06:21.199 --> 00:06:23.480 the school that really matters. So true. So he's 00:06:23.480 --> 00:06:26.439 a BYU. He's studying economics. He's playing 00:06:26.439 --> 00:06:28.860 basketball. But then he just kind of disappears. 00:06:29.120 --> 00:06:32.379 He does. He takes a gap. But it's not your typical 00:06:32.379 --> 00:06:34.459 gap year to go backpack through Europe and find 00:06:34.459 --> 00:06:39.519 himself. Right. From 1971 to 1973, he takes a 00:06:39.519 --> 00:06:41.779 leave to serve a full time mission for the LDS 00:06:41.779 --> 00:06:44.720 church in South Korea. Now we need a quick context 00:06:44.720 --> 00:06:48.759 check here. Because South Korea in 1971 is not 00:06:48.759 --> 00:06:52.100 the South Korea of K -pop and Samsung and high 00:06:52.100 --> 00:06:54.819 -speed internet. No today. Oh, not at all. It 00:06:54.819 --> 00:06:56.680 was still very much a developing nation at that 00:06:56.680 --> 00:06:58.279 point. It was still recovering from the war. 00:06:58.360 --> 00:07:00.819 It was gritty. Yeah. And he wasn't staying in 00:07:00.819 --> 00:07:03.759 some nice expat hotel. He was living the very 00:07:03.759 --> 00:07:06.439 raw life of a missionary, knocking on doors, 00:07:06.740 --> 00:07:08.519 speaking the local language, eating the local 00:07:08.519 --> 00:07:10.519 food. And he actually became completely fluent 00:07:10.519 --> 00:07:12.920 in Korean, right? Right, completely fluent. And 00:07:12.920 --> 00:07:15.300 honestly, I think this specific experience is 00:07:15.300 --> 00:07:17.420 crucial for understanding his later theories. 00:07:18.040 --> 00:07:20.819 How so? Well, when you live in a developing economy, 00:07:21.600 --> 00:07:24.680 you see what he would later call low -end disruption 00:07:24.680 --> 00:07:27.819 in real time. Ah, I see. You see how people make 00:07:27.819 --> 00:07:30.779 do with much cheaper, simpler solutions because 00:07:30.779 --> 00:07:32.959 they simply can't afford the high -end stuff? 00:07:33.300 --> 00:07:35.500 He didn't have the academic vocabulary for it 00:07:35.500 --> 00:07:37.480 yet, but he was soaking in all that data. That 00:07:37.480 --> 00:07:39.680 makes a lot of sense. Yeah. So he comes back, 00:07:39.779 --> 00:07:43.759 he finishes up at BYU in 1975, graduating summa 00:07:43.759 --> 00:07:46.250 cum laude. Naturally. Naturally. And then the 00:07:46.250 --> 00:07:48.550 global prestige finally catches up with him. 00:07:48.829 --> 00:07:51.209 He wins the Rhodes Scholarship. Off to Oxford, 00:07:51.329 --> 00:07:53.350 he goes to Queens College. And this is where 00:07:53.350 --> 00:07:56.379 the story gets... Super cinematic for me because 00:07:56.379 --> 00:07:58.800 he goes all the way to Oxford to study applied 00:07:58.800 --> 00:08:01.360 econometrics, which is let's just be brutally 00:08:01.360 --> 00:08:04.680 honest here Incredibly dry. Yeah, it's the heavy 00:08:04.680 --> 00:08:07.319 complex mathematics of economics, right? So you 00:08:07.319 --> 00:08:10.019 naturally picture him in this dusty old British 00:08:10.019 --> 00:08:13.019 library surrounded by leather bound books just 00:08:13.019 --> 00:08:16.300 crunching numbers all day But that's only half 00:08:16.300 --> 00:08:18.480 the day. What is he doing the rest of the time? 00:08:18.620 --> 00:08:21.980 He is dominating the paint. He joins the Oxford 00:08:21.980 --> 00:08:25.180 men's basketball team. I just love the visual 00:08:25.180 --> 00:08:28.500 of this giant American kid crashing into these 00:08:28.500 --> 00:08:31.600 polite British academics on the court. It really 00:08:31.600 --> 00:08:34.120 is a funny image, but they were incredibly serious 00:08:34.120 --> 00:08:36.639 about it. With Christensen playing as their starting 00:08:36.639 --> 00:08:39.399 center, Oxford actually won the British University 00:08:39.399 --> 00:08:42.029 Sports Federation championship. back to back. 00:08:42.789 --> 00:08:46.570 1975 and 76. So he's a British national champion. 00:08:46.830 --> 00:08:49.509 Technically, yes. And in 1977, they even won 00:08:49.509 --> 00:08:52.570 the English Basketball Association's national 00:08:52.570 --> 00:08:55.870 title for non league teams. That is amazing. 00:08:55.889 --> 00:08:58.389 So he's literally writing a thesis on econometrics 00:08:58.389 --> 00:09:00.549 in the morning and then winning national sports 00:09:00.549 --> 00:09:02.789 trophies in the evening. Talk about rain. It 00:09:02.789 --> 00:09:04.970 really reinforces that idea that he had this 00:09:04.970 --> 00:09:07.269 massive capacity. He never felt like he had to 00:09:07.269 --> 00:09:09.529 trade one talent for another. But eventually, 00:09:09.549 --> 00:09:11.539 you know, you have to get a You can't just play 00:09:11.539 --> 00:09:14.159 center for Oxford forever. True. So he comes 00:09:14.159 --> 00:09:16.299 back to the States and he goes to Harvard Business 00:09:16.299 --> 00:09:18.539 School for his MBA. Finally made it to Harvard. 00:09:18.879 --> 00:09:22.019 He did. He graduates with high distinction in 00:09:22.019 --> 00:09:25.879 1979 and immediately joins the Boston Consulting 00:09:25.879 --> 00:09:28.879 Group, BCG. Basically the ultimate boot camp 00:09:28.879 --> 00:09:31.200 for business strategy. Exactly. And then he does 00:09:31.200 --> 00:09:34.000 a really interesting stint as a White House fellow 00:09:34.000 --> 00:09:38.019 in 1982, working as an assistant to the U .S. 00:09:38.259 --> 00:09:40.259 Secretary of Transportation in D .C. Getting 00:09:40.259 --> 00:09:42.279 that government perspective. Right. So he's seeing 00:09:42.279 --> 00:09:44.080 how the federal government works at the highest 00:09:44.080 --> 00:09:47.080 level. He's seeing the bureaucracy and the logistics. 00:09:47.360 --> 00:09:49.440 But here is the pivot point that I think is the 00:09:49.440 --> 00:09:51.799 most important part of his early career, because 00:09:51.799 --> 00:09:54.820 up until now, he's been a consultant, a student, 00:09:55.039 --> 00:09:57.600 a government aide. He's been an advisor. Exactly. 00:09:58.000 --> 00:10:01.720 But in 1984, He decides he wants to be the decider. 00:10:02.080 --> 00:10:04.460 He wants to actually run something. Right. He 00:10:04.460 --> 00:10:06.480 becomes an entrepreneur. He co -founds a company 00:10:06.480 --> 00:10:09.419 called Ceramics Process Systems Corporation, 00:10:09.840 --> 00:10:12.360 which is actually now known as CPS Technologies. 00:10:12.700 --> 00:10:15.059 And this wasn't just some simple software startup 00:10:15.059 --> 00:10:18.659 or a lemonade stand. This was serious, hardcore 00:10:18.659 --> 00:10:21.860 material science. MIT professors were deeply 00:10:21.860 --> 00:10:25.220 involved. Yes, advanced ceramics, very high tech 00:10:25.220 --> 00:10:28.759 manufacturing stuff. And Christensen served as 00:10:28.759 --> 00:10:31.539 the president and the CEO. And this is the part 00:10:31.539 --> 00:10:33.500 of his life that gets glossed over in the biography 00:10:33.500 --> 00:10:37.080 sometimes, but it is so vital to understand him. 00:10:37.139 --> 00:10:40.039 It was really hard. What made it so hard? Well, 00:10:40.159 --> 00:10:42.559 he struggled. He had this brilliant technology, 00:10:42.820 --> 00:10:44.480 right? These advanced ceramics that could do 00:10:44.480 --> 00:10:46.980 amazing things, but he had a lot of trouble actually 00:10:46.980 --> 00:10:51.190 selling them. He faced this classic problem where 00:10:51.190 --> 00:10:53.009 the technology was great, but the market just 00:10:53.009 --> 00:10:55.389 wasn't ready, or the specific application wasn't 00:10:55.389 --> 00:10:58.330 quite right. So he's the CEO, he's obviously 00:10:58.330 --> 00:11:01.230 brilliant, he has smart investors, he has the 00:11:01.230 --> 00:11:03.669 absolute best tech heart, and he's still just 00:11:03.669 --> 00:11:05.970 banging his head against the wall. Exactly. And 00:11:05.970 --> 00:11:09.250 that intense frustration is the actual seed of 00:11:09.250 --> 00:11:11.230 the innovators dilemma. The real world data. 00:11:11.269 --> 00:11:13.909 Yeah. He realized that all the standard business 00:11:13.909 --> 00:11:16.009 advice he learned at HBS, you know, listen to 00:11:16.009 --> 00:11:17.799 your best customers, build... better products, 00:11:17.820 --> 00:11:20.299 it just wasn't working for his startup. In fact, 00:11:20.320 --> 00:11:22.899 following that very advice was almost killing 00:11:22.899 --> 00:11:25.740 his company. So he was literally living the dilemma 00:11:25.740 --> 00:11:29.360 before he ever named it. He really was. So he 00:11:29.360 --> 00:11:32.039 eventually left the CEO role and decided to go 00:11:32.039 --> 00:11:34.519 back to Harvard to get his doctorate. He needed 00:11:34.519 --> 00:11:36.940 answers. Right. He needed to figure out why. 00:11:37.039 --> 00:11:39.059 Why do you smart people with good tech fail? 00:11:39.580 --> 00:11:41.379 He wasn't just sitting around theorizing. He 00:11:41.379 --> 00:11:43.639 was actively investigating his own professional 00:11:43.639 --> 00:11:46.080 scars. That is fascinating. So he enters the 00:11:46.080 --> 00:11:49.240 DBA. program at Harvard, gets his doctorate in 00:11:49.240 --> 00:11:53.779 1992, and joins the faculty. And then from what 00:11:53.779 --> 00:11:56.179 the sources show, his career just completely 00:11:56.179 --> 00:11:59.080 explodes. It was a rocket ship. He achieved the 00:11:59.080 --> 00:12:01.639 rank of full professor in only six years. That's 00:12:01.639 --> 00:12:04.600 fast. That is a record at HBS. Getting tenure 00:12:04.600 --> 00:12:07.600 usually takes much, much longer. And it was all 00:12:07.600 --> 00:12:09.639 because of the groundbreaking research that eventually 00:12:09.639 --> 00:12:12.440 culminated in his 1997 book, The Innovator's 00:12:12.440 --> 00:12:15.179 Dilemma. OK, so we are here. The main event. 00:12:15.399 --> 00:12:18.500 The theory itself, we really need to unpack this 00:12:18.500 --> 00:12:19.980 properly for you listening, because like we said 00:12:19.980 --> 00:12:22.179 earlier, people think disruption just means, 00:12:22.179 --> 00:12:24.379 oh, Uber came along and it was way cooler than 00:12:24.379 --> 00:12:27.259 taxis. Which is just factually wrong. Or at the 00:12:27.259 --> 00:12:29.700 very least, it's wildly incomplete. So teach 00:12:29.700 --> 00:12:32.100 me. Walk me through it. Let's say I'm a CEO. 00:12:32.820 --> 00:12:35.159 I'm running a very successful company. Let's 00:12:35.159 --> 00:12:39.730 say I make heavy duty excavators. big earth moving 00:12:39.730 --> 00:12:42.370 machines. That is a great example. This is actually 00:12:42.370 --> 00:12:44.750 one of the exact industries he studied in depth. 00:12:44.809 --> 00:12:47.590 Oh, perfect. So you're the CEO of a company making 00:12:47.590 --> 00:12:51.129 massive traditional steam shovels. Your best 00:12:51.129 --> 00:12:53.929 customers are giant mining companies. They want 00:12:53.929 --> 00:12:56.230 huge buckets. They want maximum power. They want 00:12:56.230 --> 00:12:58.669 to literally move mountains. Okay, and I give 00:12:58.669 --> 00:13:00.659 it to them. I have my engineers make the buckets 00:13:00.659 --> 00:13:03.360 bigger. I make the engines way stronger. I listen 00:13:03.360 --> 00:13:06.100 to exactly what they ask for. And you are a fantastic 00:13:06.100 --> 00:13:08.820 manager for doing exactly that. You are practicing 00:13:08.820 --> 00:13:11.100 what Christensen called sustaining innovation. 00:13:11.860 --> 00:13:14.259 You are making your already good product better 00:13:14.259 --> 00:13:16.580 for your most demanding, best paying customers. 00:13:16.759 --> 00:13:19.220 You can charge higher prices. Your profit margins 00:13:19.220 --> 00:13:22.240 go up. Wall Street absolutely loves you. Life 00:13:22.240 --> 00:13:25.320 is good then. My stock is up. So where's the 00:13:25.320 --> 00:13:28.210 threat? The threat is a little scrappy startup 00:13:28.210 --> 00:13:30.870 in a garage somewhere. They invent a totally 00:13:30.870 --> 00:13:33.309 new technology, let's say in this case, hydraulics. 00:13:33.429 --> 00:13:36.029 But here's the catch. The early hydraulics are 00:13:36.029 --> 00:13:38.730 weak. I can't lift a mountain. They can only 00:13:38.730 --> 00:13:41.490 lift a tiny scoop of dirt. And they break down 00:13:41.490 --> 00:13:43.990 easily. So I look at that little hydraulic shovel 00:13:43.990 --> 00:13:47.850 as a CEO, and I say, well, that's a toy. My giant 00:13:47.850 --> 00:13:50.029 mining customers can't use that thing. And you 00:13:50.029 --> 00:13:53.120 are 100 % right. Your customers do not want it. 00:13:53.340 --> 00:13:55.659 If you tried to sell that weak hydraulic shovel 00:13:55.659 --> 00:13:57.440 to them, they would laugh you out of the boardroom. 00:13:58.019 --> 00:14:00.480 So completely rationally, you ignore it. You 00:14:00.480 --> 00:14:03.120 stick to your highly profitable steam shovels. 00:14:03.159 --> 00:14:05.120 That makes perfect sense. Why on earth would 00:14:05.120 --> 00:14:07.799 I divert resources to invest in a worse product? 00:14:08.029 --> 00:14:10.970 Because that little hydraulic shovel finds a 00:14:10.970 --> 00:14:13.210 totally different customer base. Maybe it's a 00:14:13.210 --> 00:14:15.909 small residential contractor, just a guy digging 00:14:15.909 --> 00:14:18.649 a ditch in a backyard. OK. He can't afford your 00:14:18.649 --> 00:14:21.889 giant steam shovel, nor does he need one. But 00:14:21.889 --> 00:14:24.169 he loves the little hydraulic one. It's cheap. 00:14:24.230 --> 00:14:27.250 It's small. It gets his specific job done. OK, 00:14:27.250 --> 00:14:29.629 so the startup gets the backyard ditch market. 00:14:29.950 --> 00:14:31.909 I really don't care about that. That's absolute 00:14:31.909 --> 00:14:34.649 peanuts. I have the multi -million dollar gold 00:14:34.649 --> 00:14:38.289 mines. And this right here is the trap. Christensen 00:14:38.289 --> 00:14:41.759 called this asymmetric motivation. Asymmetric 00:14:41.759 --> 00:14:45.360 motivation. Yes. You as the incumbent are motivated 00:14:45.360 --> 00:14:48.480 to go up market to the big money. The startup, 00:14:48.639 --> 00:14:50.860 however, is highly motivated to capture the low 00:14:50.860 --> 00:14:53.019 end because they have nothing else. Right. But, 00:14:53.179 --> 00:14:55.659 and this is the absolute key mechanism of the 00:14:55.659 --> 00:14:58.840 whole theory, technology improves faster than 00:14:58.840 --> 00:15:01.340 customer needs do. Wait, say that again. Because 00:15:01.340 --> 00:15:03.740 that feels like the big aha moment. Technology 00:15:03.740 --> 00:15:06.059 improves faster than we actually need it to. 00:15:06.440 --> 00:15:09.000 The hydraulic engineers keep tinkering. better 00:15:09.000 --> 00:15:11.120 and better. Suddenly they can dig a basement. 00:15:11.299 --> 00:15:13.600 Then they can dig a foundation. Then they can 00:15:13.600 --> 00:15:16.899 dig a small quarry. Wow. And eventually, inevitably, 00:15:17.059 --> 00:15:19.600 the hydraulic shovel becomes strong enough and 00:15:19.600 --> 00:15:21.600 reliable enough to handle the gold mine. And 00:15:21.600 --> 00:15:23.840 by the time I noticed this happening, it is way 00:15:23.840 --> 00:15:26.000 too late. The hydraulic tech is now cheaper. 00:15:26.220 --> 00:15:28.980 It's simpler and it's completely reliable. Your 00:15:28.980 --> 00:15:31.779 big mining customers just switch over and you 00:15:31.779 --> 00:15:33.519 are left standing there with a warehouse full 00:15:33.519 --> 00:15:36.440 of incredibly expensive, completely obsolete 00:15:36.440 --> 00:15:39.659 steam shovels. That is wild. And the kicker is 00:15:39.659 --> 00:15:41.960 you didn't fail because you were stupid or lazy. 00:15:42.659 --> 00:15:44.679 You failed because you were completely rational. 00:15:45.259 --> 00:15:48.039 You ignored the low end because it made zero 00:15:48.039 --> 00:15:50.740 business sense at the time until it literally 00:15:50.740 --> 00:15:53.500 ate your entire business. That is genuinely terrifying 00:15:53.500 --> 00:15:55.799 if you're a market leader. It basically says 00:15:55.799 --> 00:15:57.919 that the exact thing that makes you successful 00:15:57.919 --> 00:16:01.500 today is the very thing that structurally guarantees 00:16:01.500 --> 00:16:04.539 your failure tomorrow. That is the dilemma. It's 00:16:04.539 --> 00:16:07.159 structural. It's all about the resource allocation 00:16:07.159 --> 00:16:09.799 process inside a company. How does that work? 00:16:10.039 --> 00:16:12.639 In a big, successful company, it is very hard 00:16:12.639 --> 00:16:15.879 to justify spending real money on a tiny, low 00:16:15.879 --> 00:16:18.220 -margin product that your current best customers 00:16:18.220 --> 00:16:20.580 actively hate. The financial spreadsheet will 00:16:20.580 --> 00:16:22.840 always say no. And Christensen saw this exact 00:16:22.840 --> 00:16:25.460 pattern everywhere, right? Hard drives. Steel 00:16:25.460 --> 00:16:27.639 mills. Steel is a classic one he wrote about, 00:16:27.740 --> 00:16:30.000 the mini mills. They started by melting cheap 00:16:30.000 --> 00:16:32.340 scrap metal to make a rebar, you know, the cheap 00:16:32.340 --> 00:16:34.700 steel rods they put in concrete. Yeah. The big 00:16:34.700 --> 00:16:37.580 integrated steel mills looked at that and said 00:16:37.580 --> 00:16:40.580 rebar is a terrible loam engine business. Let 00:16:40.580 --> 00:16:43.620 them have it. We are going to retreat to high 00:16:43.620 --> 00:16:46.480 quality, high margin sheet steel for the auto 00:16:46.480 --> 00:16:48.399 industry. So they just gave away the bottom of 00:16:48.399 --> 00:16:51.529 the market willingly. They fled upmarket. But 00:16:51.529 --> 00:16:53.490 the mini mills got better. They started making 00:16:53.490 --> 00:16:55.950 angle iron. Then they moved up to structural 00:16:55.950 --> 00:16:58.610 beams. And finally, they figured out how to make 00:16:58.610 --> 00:17:01.490 high quality sheet steel. And the big mills? 00:17:01.549 --> 00:17:03.690 The big mills had nowhere left to go. They had 00:17:03.690 --> 00:17:05.970 retreated right off a cliff. It's just incredible. 00:17:06.089 --> 00:17:08.089 This theory completely turned the business world 00:17:08.089 --> 00:17:10.309 upside down. The economist even called him the 00:17:10.309 --> 00:17:13.190 most influential management thinker of his time. 00:17:13.250 --> 00:17:15.920 And rightfully so. It explained why these massive 00:17:15.920 --> 00:17:18.599 giants like Digital Equipment Corporation or 00:17:18.599 --> 00:17:21.660 Sears or Kodak were suddenly struggling. It wasn't 00:17:21.660 --> 00:17:23.900 incompetence at all. It was the innovator's dilemma. 00:17:24.119 --> 00:17:25.779 But Christensen didn't just sit in his ivory 00:17:25.779 --> 00:17:28.339 tower and write papers about this. He actually 00:17:28.339 --> 00:17:31.119 started companies based on the theory. He did. 00:17:31.440 --> 00:17:34.200 He founded Inosite in the year 2000, which is 00:17:34.200 --> 00:17:36.160 a consulting firm designed to help companies 00:17:36.160 --> 00:17:38.500 see these disruptions coming before they hit. 00:17:38.720 --> 00:17:41.740 Right. And then he founded Rose Park Advisors 00:17:41.740 --> 00:17:45.940 in 2007, which was an investment firm that specifically 00:17:45.940 --> 00:17:49.119 used his research to invest in the disruptors. 00:17:49.180 --> 00:17:51.839 So he was literally betting his own money on 00:17:51.839 --> 00:17:54.720 his own brain. And winning. But what I find really 00:17:54.720 --> 00:17:56.519 fascinating about him is that he didn't just 00:17:56.519 --> 00:17:59.140 stop at widgets and steel and disk drives. No, 00:17:59.200 --> 00:18:01.180 he went much bigger. He looked at the world and 00:18:01.180 --> 00:18:04.940 said, this lens, this theory of disruption, it 00:18:04.940 --> 00:18:08.079 totally applies to massive social systems too. 00:18:08.279 --> 00:18:11.240 Let's talk about that. Because he made some pretty 00:18:11.240 --> 00:18:14.180 bold claims about education and health care in 00:18:14.180 --> 00:18:16.400 the sources we reviewed. Definitely. He wrote 00:18:16.400 --> 00:18:19.589 a book called Disrupting Class in 2008. He looked 00:18:19.589 --> 00:18:22.170 at the whole public education system. And he 00:18:22.170 --> 00:18:24.849 argued that traditional schools are these monolithic 00:18:24.849 --> 00:18:27.430 incumbent systems. They are basically forced 00:18:27.430 --> 00:18:29.390 to teach to the middle. Which leaves a lot of 00:18:29.390 --> 00:18:32.329 kids behind. Exactly. And he saw online learning 00:18:32.329 --> 00:18:34.650 and computer -based learning not just as a cool 00:18:34.650 --> 00:18:37.869 new tool, but as a classic disruptive innovation. 00:18:38.130 --> 00:18:40.970 Because it's low cost, customizable, and super 00:18:40.970 --> 00:18:45.150 accessible. Exactly. He predicted a massive shift 00:18:45.150 --> 00:18:47.910 toward student -centric computer -based learning. 00:18:48.250 --> 00:18:50.890 He even practiced what he preached right in his 00:18:50.890 --> 00:18:54.089 own backyard. He served on the Belmont town council 00:18:54.089 --> 00:18:56.730 where he lived, and he actively pushed for Belmont 00:18:56.730 --> 00:18:59.430 High School to adopt online courses so they could 00:18:59.430 --> 00:19:02.109 save money and offer a much wider variety of 00:19:02.109 --> 00:19:04.529 classes. Oh, wow. But he also made a prediction 00:19:04.529 --> 00:19:06.950 about universities that, well, let's just say 00:19:06.950 --> 00:19:09.309 it made a lot of the university deans extremely 00:19:09.309 --> 00:19:13.130 nervous. The famous 2017 prediction. Yeah. He 00:19:13.130 --> 00:19:16.309 stated publicly that 50 % of the roughly 4 ,000 00:19:16.309 --> 00:19:18.349 colleges and universities in the US would be 00:19:18.349 --> 00:19:21.299 bankrupt. in 10 to 15 years. 50%. I mean, that 00:19:21.299 --> 00:19:24.019 is an absolute apocalypse for higher education. 00:19:24.119 --> 00:19:26.700 It is a staggering number. But he looked at the 00:19:26.700 --> 00:19:28.539 traditional business model of the university, 00:19:28.680 --> 00:19:32.000 you know, high fixed costs, 10 -year fancy buildings, 00:19:32.400 --> 00:19:34.900 massive administrative bloat, and he compared 00:19:34.900 --> 00:19:37.460 it to the skyrocketing cost of tuition. It's 00:19:37.460 --> 00:19:39.539 completely unsustainable. That's what he saw. 00:19:39.680 --> 00:19:42.880 He believed that online degrees and specialized 00:19:42.880 --> 00:19:45.700 corporate training programs would disrupt the 00:19:45.700 --> 00:19:48.299 bottom tier of colleges first, and then that 00:19:48.299 --> 00:19:50.940 disruption would just march right up market exactly 00:19:50.940 --> 00:19:53.440 like the hydraulic excavators did. We are recording 00:19:53.440 --> 00:19:57.119 this deep dive in the mid -20s. We are literally 00:19:57.119 --> 00:19:59.220 entering that window, he predicted right now. 00:19:59.289 --> 00:20:02.829 We really are. And while we haven't seen 2000 00:20:02.829 --> 00:20:05.829 actual bankruptcies just yet, we are definitely 00:20:05.829 --> 00:20:09.230 seeing massive mergers. We are seeing small liberal 00:20:09.230 --> 00:20:11.450 arts colleges close their doors every single 00:20:11.450 --> 00:20:14.170 month. We are seeing a huge cultural questioning 00:20:14.170 --> 00:20:16.809 of the actual return on investment of a four 00:20:16.809 --> 00:20:19.269 year degree. So he might have been a tiny bit 00:20:19.269 --> 00:20:21.670 aggressive on the exact timeline, but the trend 00:20:21.670 --> 00:20:23.970 line looks alarmingly accurate. It really does. 00:20:24.390 --> 00:20:26.990 And he also applied this same exact logic to 00:20:26.990 --> 00:20:29.529 health care right in his book. book, The Innovator's 00:20:29.529 --> 00:20:32.190 Prescription. Which won awards from the College 00:20:32.190 --> 00:20:34.549 of Healthcare Executives. It's the same basic 00:20:34.549 --> 00:20:37.069 pattern. General hospitals are like the big traditional 00:20:37.069 --> 00:20:38.849 department stores. They try to do everything 00:20:38.849 --> 00:20:41.470 for everyone. Right. But doing everything is 00:20:41.470 --> 00:20:44.430 incredibly expensive and complex. So he argued 00:20:44.430 --> 00:20:47.990 strongly for decentralization. Like what? Specialized 00:20:47.990 --> 00:20:50.549 clinics that do one specific thing really well 00:20:50.549 --> 00:20:53.509 and really cheap. Standalone orthopedic clinics. 00:20:54.009 --> 00:20:56.089 The minute clinics you see inside the pharmacy. 00:20:56.779 --> 00:21:00.039 ultimately moving care away from the super expensive 00:21:00.039 --> 00:21:02.460 hospital and into the cheaper home environment. 00:21:02.599 --> 00:21:05.500 It's all the exact same pattern. Move from complex 00:21:05.500 --> 00:21:08.420 and expensive to simple and affordable. That 00:21:08.420 --> 00:21:11.319 is the ultimate Christensen signature. Now, before 00:21:11.319 --> 00:21:14.339 we move to the final really personal chapter 00:21:14.339 --> 00:21:17.279 of his life, we have to talk about one more huge 00:21:17.279 --> 00:21:20.500 concept, because aside from disruption, this 00:21:20.500 --> 00:21:23.339 is probably his most famous methodology, jobs 00:21:23.339 --> 00:21:25.619 to be done. Oh, this is my absolute favorite. 00:21:25.700 --> 00:21:27.859 It's just so incredibly human. And we definitely 00:21:27.859 --> 00:21:29.920 can't explain this without the milkshake story. 00:21:29.980 --> 00:21:31.799 You have to tell the milkshake story for the 00:21:31.799 --> 00:21:33.720 listener. It is such a classic. OK, so a big 00:21:33.720 --> 00:21:36.339 fast food chain usually thought to be McDonald's, 00:21:36.359 --> 00:21:38.799 though he often didn't name them explicitly in 00:21:38.799 --> 00:21:41.539 the case study. They wanted to sell more milkshakes. 00:21:41.720 --> 00:21:43.700 Seems simple enough. So they did all the traditional 00:21:43.700 --> 00:21:46.240 market research. They brought in customers. They 00:21:46.240 --> 00:21:48.460 ran focus groups. And they asked them, hey, do 00:21:48.460 --> 00:21:51.400 you want it thicker, sweeter? More chocolatey. 00:21:51.460 --> 00:21:53.440 Standard focus group stuff. Tell us what you 00:21:53.440 --> 00:21:55.279 want. Right. And they made the changes based 00:21:55.279 --> 00:21:57.680 on that feedback, and sales did not move at all. 00:21:57.720 --> 00:22:00.420 Total flat line. Wow. So they hired Christensen's 00:22:00.420 --> 00:22:03.500 firm, and one of his colleagues went and literally 00:22:03.500 --> 00:22:06.039 just stood in the restaurant for 18 hours straight. 00:22:06.240 --> 00:22:08.279 He just watched people buy milkshakes. That is 00:22:08.279 --> 00:22:10.259 dedication. What did he actually see? Well, he 00:22:10.259 --> 00:22:14.289 noticed this really weird pattern. A huge chunk 00:22:14.289 --> 00:22:16.529 of the milkshakes were sold before eight in the 00:22:16.529 --> 00:22:19.710 morning to people who were totally alone. They 00:22:19.710 --> 00:22:21.630 bought the single shake they got in their car 00:22:21.630 --> 00:22:24.130 and they drove off. So breakfast milkshakes. 00:22:24.430 --> 00:22:27.309 Exactly. So the very next day they went back 00:22:27.309 --> 00:22:29.589 and confronted these early morning buyers and 00:22:29.589 --> 00:22:32.349 they asked this really unusual question. They 00:22:32.349 --> 00:22:34.930 asked, excuse me, what job were you trying to 00:22:34.930 --> 00:22:36.970 do that caused you to hire this milkshake? That 00:22:36.970 --> 00:22:39.720 is such a weird way to phrase it. Why did you 00:22:39.720 --> 00:22:42.460 hire that milkshake? It sounds crazy but it got 00:22:42.460 --> 00:22:45.799 the real answer. It turned out these specific 00:22:45.799 --> 00:22:49.549 people had a long boring drive to work. They 00:22:49.549 --> 00:22:51.829 needed something to keep them awake and occupied. 00:22:52.210 --> 00:22:54.309 They weren't even really hungry yet, but they 00:22:54.309 --> 00:22:57.329 knew they would be by 10 a .m., so they needed 00:22:57.329 --> 00:22:59.710 something they could hold in one hand while driving 00:22:59.710 --> 00:23:01.869 something that wouldn't get crumbs all over their 00:23:01.869 --> 00:23:04.289 work suit, like a bagel or a donut would. And 00:23:04.289 --> 00:23:06.630 a milkshake is perfect for that. Yes, because 00:23:06.630 --> 00:23:08.690 the milkshake is so thick it literally takes 00:23:08.690 --> 00:23:11.450 20 minutes to suck it up through that thin straw. 00:23:11.589 --> 00:23:14.650 Wow. It was the absolute perfect tool for the 00:23:14.650 --> 00:23:17.470 job. It wasn't about the flavor at all. entirely 00:23:17.470 --> 00:23:20.150 about boredom, alleviation, and having a morning 00:23:20.150 --> 00:23:23.450 tide me over. So the competitor to that milkshake 00:23:23.450 --> 00:23:26.170 wasn't a Burger King milkshake. The competitor 00:23:26.170 --> 00:23:29.009 was a banana or a donut or even just listening 00:23:29.009 --> 00:23:31.930 to talk radio. Yes, exactly. And once the company 00:23:31.930 --> 00:23:34.650 actually understood the job, the customers were 00:23:34.650 --> 00:23:36.509 hiring it for, they changed the product, they 00:23:36.509 --> 00:23:38.710 made the shakes even thicker so they would last 00:23:38.710 --> 00:23:40.829 longer on the commute, and they added chunks 00:23:40.829 --> 00:23:43.109 of fruit to make the whole experience more interesting. 00:23:43.630 --> 00:23:46.190 And I assume it worked. Sales completely exploded. 00:23:46.450 --> 00:23:49.009 The core insight is you don't just analyze the 00:23:49.009 --> 00:23:52.150 customer demographics. You have to analyze the 00:23:52.150 --> 00:23:54.109 actual job the customer is trying to get done 00:23:54.109 --> 00:23:56.250 in their life. It just shifts the focus entirely. 00:23:56.490 --> 00:23:59.490 It's so incredibly practical. It is, and it's 00:23:59.490 --> 00:24:02.740 that exact practicality, that deep... deep desire 00:24:02.740 --> 00:24:05.680 to be truly useful people that really defines 00:24:05.680 --> 00:24:08.400 the final act of his own life. Yeah. Because 00:24:08.400 --> 00:24:11.039 while his incredible mind was reshaping global 00:24:11.039 --> 00:24:14.319 industries, his physical body was really starting 00:24:14.319 --> 00:24:16.660 to fail him. This is the hard part of the story. 00:24:17.299 --> 00:24:19.960 The timeline of his health in the early 2010s 00:24:19.960 --> 00:24:23.069 is just... Brutal. It is relentless. In February 00:24:23.069 --> 00:24:26.329 of 2010, he is diagnosed with follicular lymphoma, 00:24:26.529 --> 00:24:28.890 which is a serious form of cancer. Then just 00:24:28.890 --> 00:24:31.670 five months later in July of 2010, he suffers 00:24:31.670 --> 00:24:34.750 a massive ischemic stroke. A stroke? I mean for 00:24:34.750 --> 00:24:36.849 a professor, for a guy who makes his living speaking 00:24:36.849 --> 00:24:39.430 and writing. It was devastating. It hit the exact 00:24:39.430 --> 00:24:41.589 part of his brain that controlled speech. He 00:24:41.589 --> 00:24:43.890 developed something called expressive aphasia. 00:24:44.069 --> 00:24:46.210 What does that mean exactly? It means he knew 00:24:46.210 --> 00:24:48.250 exactly what he wanted to say in his head, but 00:24:48.250 --> 00:24:50.390 he physically couldn't get the right words out 00:24:50.390 --> 00:24:53.150 of his mouth. He told a story later about lying 00:24:53.150 --> 00:24:57.450 inside this MRI machine praying and slowly realizing 00:24:57.450 --> 00:25:00.250 that his ability to speak the literal tool of 00:25:00.250 --> 00:25:03.599 his entire trade was just gone. He had to relearn 00:25:03.599 --> 00:25:05.619 English from scratch, didn't he? Like a young 00:25:05.619 --> 00:25:09.059 child. He had to undergo intense speech therapy 00:25:09.059 --> 00:25:12.579 to learn grammar and basic vocabulary all over 00:25:12.579 --> 00:25:15.119 again. He described the feeling as trying to 00:25:15.119 --> 00:25:17.980 find a specific file in a giant file cabin where 00:25:17.980 --> 00:25:20.240 all the labels have been completely ripped off. 00:25:20.380 --> 00:25:22.440 The irony of that is just heartbreaking. The 00:25:22.440 --> 00:25:24.480 man who articulated some of the most complex 00:25:24.480 --> 00:25:26.819 management theories of our time suddenly reduced 00:25:26.819 --> 00:25:29.720 to complete silence. It is, but he fought back 00:25:29.720 --> 00:25:32.279 so hard he treated his own stroke recovery like 00:25:32.279 --> 00:25:34.880 a job to be done. Wow. And he did eventually 00:25:34.880 --> 00:25:36.740 regain his speech, though he sometimes struggled 00:25:36.740 --> 00:25:38.799 to find specific words for the rest of his life. 00:25:39.039 --> 00:25:41.240 And then as if all of that wasn't enough, he 00:25:41.240 --> 00:25:43.240 later developed leukemia. It's just wave after 00:25:43.240 --> 00:25:46.400 wave. But right in the middle of all that suffering, 00:25:46.500 --> 00:25:49.500 the cancer, the stroke, the recovery, he writes 00:25:49.500 --> 00:25:51.759 a book that I genuinely think will outlast all 00:25:51.759 --> 00:25:54.339 of his business books. How Will You Measure Your 00:25:54.339 --> 00:25:58.200 Life? Yeah, this came out in 2012. And it started 00:25:58.200 --> 00:26:00.700 as a speech he gave to the graduating class at 00:26:00.700 --> 00:26:03.380 Harvard Business School, right? It did. He looked 00:26:03.380 --> 00:26:05.119 out at the students, and then he looked back 00:26:05.119 --> 00:26:08.019 at his own former HBS classmates. These were 00:26:08.019 --> 00:26:10.359 the absolute masters of the universe, right? 00:26:10.359 --> 00:26:12.759 Right. And he realized that many of them, by 00:26:12.759 --> 00:26:15.880 age 50, were totally miserable. They were divorced. 00:26:15.960 --> 00:26:18.200 They were estranged from their own kids. Wow. 00:26:18.319 --> 00:26:21.369 Some were even in federal prison. Jeffrey Skilling, 00:26:21.490 --> 00:26:24.109 the CEO of Enron, was actually in his graduating 00:26:24.109 --> 00:26:26.549 class. Oh man, the best and the brightest. And 00:26:26.549 --> 00:26:28.789 Christensen asked a very simple question. How 00:26:28.789 --> 00:26:31.230 does this happen? How do these incredibly smart, 00:26:31.309 --> 00:26:34.230 highly driven people end up totally ruining their 00:26:34.230 --> 00:26:36.670 own lives? And what was the answer? He realized 00:26:36.670 --> 00:26:38.710 it's the innovator's dilemma all over again. 00:26:38.950 --> 00:26:41.069 But how does disruption apply to your family 00:26:41.069 --> 00:26:43.339 life? Think about the resource allocation process 00:26:43.339 --> 00:26:46.019 we talked about earlier. You as a person have 00:26:46.019 --> 00:26:48.660 limited resources. You have your time and your 00:26:48.660 --> 00:26:51.160 energy. Right. And naturally, you want to invest 00:26:51.160 --> 00:26:53.700 those resources where you get the most immediate, 00:26:53.759 --> 00:26:57.299 most tangible return. OK. So if I stay late at 00:26:57.299 --> 00:27:01.200 the office and I ship a big new product, I get 00:27:01.200 --> 00:27:04.079 a bonus. I get a high five from my boss. I get 00:27:04.079 --> 00:27:07.380 a promotion. The feedback loop on that is super 00:27:07.380 --> 00:27:10.240 fast. Exactly. But if you go home early to play 00:27:10.240 --> 00:27:12.759 catch with your toddler or read them a book, 00:27:13.079 --> 00:27:16.099 what's the immediate measurable return? Not much. 00:27:16.240 --> 00:27:18.660 The kid cries. I'm exhausted. Right. You don't 00:27:18.660 --> 00:27:21.579 see the real result of being a good dad or a 00:27:21.579 --> 00:27:25.349 good mom for maybe 20 years. So the margins on 00:27:25.349 --> 00:27:27.490 parenting are just really low in the short term. 00:27:27.670 --> 00:27:29.910 So rationally, these high achievers pour all 00:27:29.910 --> 00:27:32.789 their resources into their careers. They systematically 00:27:32.789 --> 00:27:34.750 under invest in their own families. They think, 00:27:34.970 --> 00:27:36.509 you know, I'll deal with the family stuff later 00:27:36.509 --> 00:27:38.390 once I've made partner or once we go public. 00:27:38.509 --> 00:27:40.210 But by the time they finally turn back to their 00:27:40.210 --> 00:27:42.869 family, the family is gone. The relationship 00:27:42.869 --> 00:27:45.849 has been disrupted by neglect. That is so profound. 00:27:46.049 --> 00:27:48.710 We basically bankrupt our own personal lives 00:27:48.710 --> 00:27:52.400 because we are constantly chasing the high margin 00:27:52.400 --> 00:27:54.960 hits of our career. And he also talked a lot 00:27:54.960 --> 00:27:57.039 about personal integrity in that book. He used 00:27:57.039 --> 00:28:00.000 this economic concept of marginal cost. How so? 00:28:00.200 --> 00:28:02.200 Well, in business, the marginal cost of doing 00:28:02.200 --> 00:28:04.839 something just one more time is usually pretty 00:28:04.839 --> 00:28:07.920 low. He applied that directly to human ethics. 00:28:08.059 --> 00:28:10.720 The cost of breaking your own moral rule just 00:28:10.720 --> 00:28:13.680 this once always seems really low in the moment. 00:28:13.740 --> 00:28:15.500 Right, like I'll just cheat on this one little 00:28:15.500 --> 00:28:18.400 expense report. or I'll just miss this one soccer 00:28:18.400 --> 00:28:21.539 game. Exactly. But he argued that the actual 00:28:21.539 --> 00:28:24.200 marginal cost of doing something wrong just this 00:28:24.200 --> 00:28:26.599 once is almost always infinite. Because once 00:28:26.599 --> 00:28:28.660 you break the rule, the rule is permanently gone. 00:28:28.799 --> 00:28:31.900 Wow. He decided very early in his life, for example, 00:28:32.039 --> 00:28:34.119 that he would never play sports on a Sunday because 00:28:34.119 --> 00:28:35.720 of his religious faith. But even when he was 00:28:35.720 --> 00:28:38.700 at Oxford? Even at Oxford. The big national championship 00:28:38.700 --> 00:28:41.480 game landed on a Sunday, and his coach literally 00:28:41.480 --> 00:28:43.940 begged him to play. His teammates begged him. 00:28:43.960 --> 00:28:46.019 They said, Clay, just this once, it's for the 00:28:46.019 --> 00:28:48.079 national championship. And he was the starting 00:28:48.079 --> 00:28:50.769 center. They absolutely needed him. He actually 00:28:50.769 --> 00:28:53.190 went to a park nearby and he prayed about it 00:28:53.190 --> 00:28:55.769 and he said the answer was a clear no. So he 00:28:55.769 --> 00:28:58.349 didn't play. What happened? They actually ended 00:28:58.349 --> 00:29:00.809 up winning without him, which he joked kept him 00:29:00.809 --> 00:29:03.549 very humble. That's funny. But he said later 00:29:03.549 --> 00:29:05.630 that if he had played that one time, he would 00:29:05.630 --> 00:29:08.430 have absolutely no defense the next time a conflict 00:29:08.430 --> 00:29:11.529 came up. It's so much easier to hold your principles 00:29:11.529 --> 00:29:15.089 100 % of the time than it is to hold them 98 00:29:15.089 --> 00:29:18.309 % of the time. 100 % is easier than 98%. That 00:29:18.309 --> 00:29:20.029 is definitely going to stick with me. It was 00:29:20.029 --> 00:29:23.289 the code he lived his entire life by. He was 00:29:23.289 --> 00:29:26.920 a bishop in his local church congregation. counselor 00:29:26.920 --> 00:29:30.079 in a mission presidency, he was a scoutmaster 00:29:30.079 --> 00:29:34.279 for the Boy Scouts for 25 years. Wait, 25 years? 00:29:34.779 --> 00:29:38.589 Yes. Think about that. While he was actively 00:29:38.589 --> 00:29:41.250 advising Intel and consulting for the White House 00:29:41.250 --> 00:29:44.049 and writing bestsellers, he was spending his 00:29:44.049 --> 00:29:46.829 Tuesday nights helping 12 -year -olds tie knots 00:29:46.829 --> 00:29:49.930 and plan weekend camping trips. That is wild. 00:29:50.210 --> 00:29:52.990 He completely refused to outsource his service 00:29:52.990 --> 00:29:56.349 to others. He deeply believed that the only real 00:29:56.349 --> 00:29:59.349 metric that God would care about at the end wasn't 00:29:59.349 --> 00:30:01.210 how much money did you make or how many books 00:30:01.210 --> 00:30:04.029 did you sell. What was it? It was simply, how 00:30:04.029 --> 00:30:06.230 many individual people did you directly help? 00:30:06.390 --> 00:30:08.690 That's the real measure of a life. That's the 00:30:08.690 --> 00:30:11.930 measure. He also received the BYU Distinguished 00:30:11.930 --> 00:30:14.230 Service Award for what they called his Christ 00:30:14.230 --> 00:30:17.289 -like charity. And he left behind an incredible 00:30:17.289 --> 00:30:21.809 family. He married Christine Quinn back in 1976, 00:30:22.150 --> 00:30:24.190 and they had five children together. And the 00:30:24.190 --> 00:30:26.509 sports legacy actually continued with them. It 00:30:26.509 --> 00:30:28.789 did. His son Matthew played basketball and was 00:30:28.789 --> 00:30:30.750 actually on the Duke University team that won 00:30:30.750 --> 00:30:33.250 the 2001 national championship. Oh, that's awesome. 00:30:33.690 --> 00:30:35.710 So Clayton Christensen passed away in January 00:30:35.710 --> 00:30:39.369 of 2020 from complications of leukemia. But just 00:30:39.369 --> 00:30:41.569 looking at the massive stack of sources we've 00:30:41.569 --> 00:30:44.700 gone through today. His footprint on the world 00:30:44.700 --> 00:30:47.319 is just staggering. It really is. His theories 00:30:47.319 --> 00:30:53.480 are discussed in board rooms from Tata... In 00:30:53.480 --> 00:30:56.619 political theorists of the last 50 years. He 00:30:56.619 --> 00:30:58.720 was ranked number one in the global thinkers 00:30:58.720 --> 00:31:04.200 50 list twice in 2011 and 2013. But honestly, 00:31:04.359 --> 00:31:07.339 I think his real legacy is that he gave us all 00:31:07.339 --> 00:31:09.900 a completely new pair of glasses. How do you 00:31:09.900 --> 00:31:12.079 mean? He taught us to look at business failure 00:31:12.079 --> 00:31:15.460 not as some sort of moral flaw or incompetence, 00:31:15.779 --> 00:31:19.759 but as a predictable structural mechanism. And 00:31:19.759 --> 00:31:21.799 even more importantly, he taught us that if we 00:31:21.799 --> 00:31:25.079 aren't incredibly careful. The blind pursuit 00:31:25.079 --> 00:31:27.779 of success can cost us the very things that actually 00:31:27.779 --> 00:31:30.779 make life worth living. So true. He warned us 00:31:30.779 --> 00:31:33.420 about the disruption of massive industries, and 00:31:33.420 --> 00:31:35.019 then he warned us about the disruption of our 00:31:35.019 --> 00:31:37.359 own souls. That is exactly it. Well, I want to 00:31:37.359 --> 00:31:39.220 leave you, the listener, with a thought today. 00:31:39.579 --> 00:31:41.500 We talked earlier about his really aggressive 00:31:41.500 --> 00:31:43.819 prediction for universities, that half of them 00:31:43.819 --> 00:31:47.299 would go bankrupt by roughly 2027 to 2032. Right. 00:31:47.420 --> 00:31:50.160 We are actively washing that landscape shift 00:31:50.160 --> 00:31:52.519 right now, but I want you to try applying the 00:31:52.519 --> 00:31:54.599 jobs to be done theory to your own life this 00:31:54.599 --> 00:31:56.940 week. Look around at the things you spend your 00:31:56.940 --> 00:31:59.460 money on. Look at the big institutions you trust. 00:31:59.799 --> 00:32:02.559 Don't ask what is this product. Ask yourself, 00:32:03.019 --> 00:32:06.259 what exact job am I hiring this thing to do? 00:32:06.500 --> 00:32:09.440 And if you are taking out massive loans to hire 00:32:09.440 --> 00:32:11.680 a university to just give you a network. Could 00:32:11.680 --> 00:32:14.000 you maybe get that exact same network somewhere 00:32:14.000 --> 00:32:17.359 else? Right. Or if you are hiring a complex hospital 00:32:17.359 --> 00:32:20.079 to fix a minor ailment, could a simple phone 00:32:20.079 --> 00:32:22.440 app do it better and cheaper? Once you start 00:32:22.440 --> 00:32:25.700 seeing the actual job, you start seeing the disruption 00:32:25.700 --> 00:32:27.740 long before it hits you. Yeah. And maybe just 00:32:27.740 --> 00:32:29.779 maybe that's how you avoid the innovator's dilemma 00:32:29.779 --> 00:32:31.880 in your own life. Keep your eyes open. Thanks 00:32:31.880 --> 00:32:33.700 for deep diving with us today. We'll see you 00:32:33.700 --> 00:32:34.000 next time.