What Disruption Theory Means For Your Family

A powerful Clayton Christensen lesson, before I sign off for a few weeks

The reason why successful companies fail is they invest in things that provide the most immediate and tangible evidence of achievement. And the reason why they have such a short time horizon is that they are run by people like you and I. We then apply that very same thinking process in our personal lives with sad results.

Matan’s blog is taking a (this time, planned) break during August, as I will be traveling and trying to focus on being a father. I thought I’d share this cute story – from the late prof. Clayton Christensen – before I sign off.

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You’re a successful executive. You have led your business unit from strength to strength. Mainly thanks to your ability to deeply understand your customers, and to allocate resources in a disciplined way. And once you get there, you start looking at every aspect of life through the same lens.

You constantly run through mental spreadsheets in your head – one more unit of effort allocated to project A yields a predictable and decent return, whereas project B – cool as it may be for your engineers – has no demand from your existing customers and might be a total waste of time. I’ve mentioned The Innovator’s Dilemma a few times by now. So you do the right thing – that’s what landed you this prestigious job in the first place – and focus on project A. Only to later discover that project B is the iPhone (and you’re Blackberry) or AWS (and you’re Oracle); eventually the market buys into project B (which seemed like complete fluff at first), and project B runs rings around your once-dominant project-A-based business. But we’ll get to that part later.

The thing is, once you train your brain to think that way, it starts applying it to every aspect of your life. Your family, for example.

That was a key insight made by Prof. Christensen – the father of Disruption Theory – in his book How Will You Measure Your Life?

I thought it was so intelligent and wholesome when I first read it; my wife, however, laughed when I shared it with her. “The nerdiest thing ever,” were her exact words. Nevertheless! I am going to share this with you. Just in case you might find it inspiring. If, however, you end up finding it quirky and make fun of me - that’s totally fine too!

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I graduated from the MBA program at Harvard in 1979. We have a reunion every five years.

When we came back for a fifth reunion, man, everybody was happy; most of our classmates had married people who are much better looking than my classmates, they're doing well in their careers.

But as we hit the 10th, the 15th, 20th, and then the 25th anniversaries, oh my gosh, my friends were coming back not happy with their lives.

And very many of them have gotten divorced, and their spouses have remarried, and they were raising their – my classmates' – children on the other side of the country alienated from them.

I guarantee that none of my classmates ever planned when they graduated from the business school to go out, and get divorced, and have children who hate their guts, and are being raised by other [parents], and yet, a very large portion of my classmates actually implemented a strategy that they never planned to do.

That’s such great framing made by Christensen! His MBA classmates must have been very intelligent and industrious and successful in their careers; why couldn’t they figure out how to make their families as successful as their businesses?

Well.

Let us first remind ourselves of the typical business mistake identified by Christensen’s research; 1979 Harvard MBAs are highly susceptible to making it:

One of the things we observed, as I mentioned, is that what kills successful companies is somebody who comes in at the bottom of the market.

If you go back a few years ago in telecommunications, the leaders of the industry were Lucent and Nortel, who made circuit switching technology. And this rusty, little or small company, not very consequential, called Cisco emerged. Their technology, the router, wasn't good enough to be used in voice. But they deployed it at the bottom of the market with data, and then went up market, and ultimately, killed Lucent and Nortel.

The reason why is that when they looked down at the router, the router on every dimension wasn't as good. So they kept making better and better circuit switch devices.

That’s an interesting business case, but I’m not here today to talk about telecommunications protocols; I’m here to talk about people, and how they make decisions. Nortel and Lucent were probably run by intelligent people; otherwise they wouldn’t have made it to market leadership. Why did they just let Cisco run over their business though?

And we ask ourselves, "I wonder who decided at Lucent that they should go out and get killed?"

"And when was the date on which they decided they would get killed?"

And the answer, of course, is that nobody made the decision. In fact, what happened is all the individual people in a very successful organization did everything right, but because they did all of these things independently. And what made sense in those circumstances, when it summed up, it summed up to disaster.

The reason why it sums up to disaster is they're trying to maximize their profitability and typically, the way you calculate profitability: tomorrow's investments that pay off tomorrow go to the bottom line and are much more tangible than investments that pay off ten years from now.

Now comes the cool part: people who were trained to view the world and make decisions through spreadsheets and market analysis and models – which 1979 Harvard MBAs very much were – are likely to overlook investments that are uncertain. Where the expected return is hard to measure. Which sometimes end up biting them in the as*.

And the same thing might happen with their families! Christensen explains:

It turns out that the reason why they do that is the very same mechanism and that is that pursuit of achievement. So, we all, everybody here, is driven to achieve, and when you have an extra ounce of energy or 30 minutes of time, instinctively and unconsciously, you'll allocate it to whatever activities in your life give you the most immediate evidence of achievement.

And our careers provide that immediate evidence of achievement: we close a sale, we ship a product, we finish a presentation, we close a deal, we get promoted, we get paid.

Our careers provide the most tangible, immediate achievement.

In contrast, investments in our families don't pay off for a very long time.

In fact, on a day-to-day basis, our children misbehave over and over again, and really it isn't until 20 years down the road you can look at your children and be able to put your hands on your hips and say, "We raised great children." But on a day-to-day basis, achievement isn't at hand when we invest in relationships with our family, our children, and our spouses.

And as a consequence, people like you and I who plan to have a happy life, because our families truly are the deepest source of happiness in our lives, find that although that's what we want, the way we invest our time, and energy, and talents causes us to implement a strategy that we wouldn't at all plan to pursue.

That last paragraph really makes me uncomfortable. I am unconsciously doing it all the time! I can’t measure the return of allocating 10 more minutes to play soccer with my son. I can, however, very well see the gain to be made by reading a Stratechery article. So, being the ambitious and driven person that I – it was chilling to realize – instinctively have been maximizing the number of Stratechery articles read over minutes of soccer played.

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It’s the same paradox that’s at the root of The Innovator’s Dilemma. There’s just no measurable metric to justify playing more soccer with your kids. But there is a highly analytical way of thinking that justifies doing more of that, at the expense of working more. Consider it The Parent’s Dilemma.

My wife and I are about to go on a five-week trip with our kids, much longer than we’ve ever done before. While there will likely be many nice memories to be made, there will definitely also be moments of crisis. Things not going according to plan. Kids misbehaving. Not cooperating. Being tired. Being ungrateful. Complaining. I spent all this money and time and energy on this trip, when I could have just been working this whole time.

That’s the point though. Disruption Theory teaches us that it’s important to invest in things with potential to be amazing – even when the data is not there yet – in order to avoid disruption. The same logic may apply to avoiding the risk of future disruption to your happiness and family life.

I warned you it was going to be nerdy. To me, though, it hits very close to home.

I’m writing all of this mostly for myself; I hope to keep in mind that — despite career-related sacrifices being made, and difficulties we would likely encounter — this trip is meant to pay off in the long-run. Through family bonding and ever-lasting memories.

This is such a powerful point made by Christensen. Just like if you’re used to thinking about resource-allocation and reward-maximization at work, you start doing it in your personal life; I suppose that if you’re a world-famous professor that built a successful career around identifying the blind spots of said approach in business – you start seeing the same blind spots in people’s personal lives as well.

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