Competing Against Luck: The Story of Innovation and Customer Choice

by Clayton M. Christensen

In the mid-1990s, two consultants from Detroit asked if they could visit my office at Harvard Business School to learn more about my then newly published theory of disruptive innovation. Bob Moesta and his partner at the time, Rick Pedi, were developing a niche business advising bakeries and snack-food companies on developing new products that people would predictably buy. As we discussed the theory of disruption, I could see that it predicted very clearly what the established companies in the market would do in the face of an impending disruption from small bakers and snack-food companies. In that regard, it offered a clear statement of cause and effect. But as we talked, it became apparent that the theory of disruption did not provide a roadmap for their clients. The theory of disruption does not offer a clear and complete causal explanation of what a company should do offensively to be successful: if you do this and not that, you will win. In fact, I realized that even if a company has the intent to disrupt a vulnerable incumbent, the odds of creating exactly the right product or service to achieve that are probably less than 25 percent. If that. For years, I’d been focused on understanding why great companies fail, but I realized I had never really thought about the reverse problem: How do successful companies know how to grow? It wasn’t for months that I finally had an answer. Moesta shared with me a project for a fast-food chain: how to sell more milk shakes. The cha...