disruptive innovation

Topics: Innovation, Social change, Disruptive technology Pages: 19 (4462 words) Published: January 13, 2014
HBR

Making a Real Difference

Spotlight

In the social sector, too much attention is devoted to providing more of the same to narrow populations that are already
served. It’s time for a fundamentally different approach.
by Clayton M. Christensen, Heiner Baumann,
Rudy Ruggles, and Thomas M. Sadtler

Disruptive
Innovation
a Change
for Social

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harvard business review | hbr.org

MICK WIGGINS

T

he United States spends more money per capita on health care than any other nation, and it offers some of the most sophisticated care in the world. Yet it lags behind many less affluent countries on basic health indicators such as infant mortality and life expectancy rates. Similarly, the United States ranks second only to Norway among OECD countries in per-student spending on education, yet it comes in 24th out of 29 on the OECD’s Programme for International Student Assessment mathematical literacy test. This pattern of aggressive spending and disappointing returns in the social sector isn’t limited to the United States, of course. Throughout the world, affluent nations, institutions, and individuals generously fund social services that fail to fully deliver on their promise. What accounts for this poor showing? It’s not a lack of solutions but rather misdirected investment. Too much of the money available to address social needs is used to maintain the status quo, because it is given to organizations that are

december 2006

95

YEL MAG CYAN BLACK

HBR

Making a Real Difference

Spotlight

wedded to their current solutions, delivery models, and
recipients. Many provide relatively specific, sometimes sophisticated offerings to a narrow range of people. While they may do a good and important job serving those people, and while their services may steadily improve, these organizations are unlikely ever to reach the far broader

populations that are in need–and that would be satisfied
by simpler offerings if only they were available.
What’s required is expanded support for organizations that are approaching social-sector problems in a fundamentally new way and creating scalable, sustainable, systems-changing solutions. Their method, which we call “catalytic innovation,” shares principal features with Clayton Christensen’s disruptive-innovation model.

Like disruptive innovations, which challenge industry incumbents by offering simpler, good-enough alternatives to an underserved group of customers, catalytic innovations can surpass the status quo by providing goodenough solutions to inadequately addressed social problems. Catalytic innovations are a subset of disruptive innovations, distinguished by their primary focus on social change, often on a national scale. To understand this argument, it’s useful to review the

disruptive-innovation model first put forward in Christensen and Joseph L. Bower’s HBR article “Disruptive Technologies: Catching the Wave” (January–February
1995). The authors divide innovations into two categories:
sustaining and disruptive. Most product and service innovations are sustaining. They provide better quality or additional functionality for an organization’s most demanding customers. Some sustaining innovations are incremental improvements; others are breakthrough or leapfrog products or services.

By contrast, disruptive innovations don’t, by traditional
measures, meet existing customers’ needs as well as currently available products or services. They may lack certain features or capabilities of the established goods, for example. However, they are typically simpler, more convenient, and less expensive, so they appeal to new or lessdemanding customers. Southwest Airlines’ low-cost, nofrills flights were a disruptive service innovation that initially attracted leisure travelers whose alternatives

were to pay through the nose or not to fly at all. The company rapidly stole market share from established carriers

while also bringing new customers to air travel....
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