Tagged: intellectual history

Just So Disruptive

i-don-t-always-meme-generator-i-don-t-always-buy-companies-but-when-i-do-i-do-it-for-no-reason-925b08The “just so” story is a pejorative for cultural or physical traits that drive an evolutionary explanation. Things are “just so” when the explanation is unfalsifiable and theoretically fitted to current observations. Less controversial and pejorative is the essential character of evolutionary process where there is no doubt that genetic alternatives will mostly fail. The ones that survive this crucible are disruptive to the status quo, sure, but these disruptions tend to be geographically or sexually isolated from the main population anyway, so they are more an expansion than a disruption; little competition is tooth-and-claw, mostly species survive versus the environment, not one another.

Jill Lapore of Harvard subjects business theory to a similar crucible in the New Yorker, questioning Clayton Christensen’s classic argument in The Innovator’s Dilemma that businesses are unwilling to adapt to changing markets because they are making rational business decisions to maximize profits. After analyzing core business cases from Christensen’s books, Lapore concludes that the argument holds little water and that its predictions are both poor and inapplicable to other areas like journalism and college education.

Central to her critique is her analysis of the “just so” nature of disruptive innovation:

Christensen has compared the theory of disruptive innovation to a theory of nature: the theory of evolution. But among the many differences between disruption and evolution is that the advocates of disruption have an affinity for circular arguments. If an established company doesn’t disrupt, it will fail, and if it fails it must be because it didn’t disrupt. When a startup fails, that’s a success, since epidemic failure is a hallmark of disruptive innovation. (“Stop being afraid of failure and start embracing it,” the organizers of FailCon, an annual conference, implore, suggesting that, in the era of disruption, innovators face unprecedented challenges. For instance: maybe you made the wrong hires?) When an established company succeeds, that’s only because it hasn’t yet failed. And, when any of these things happen, all of them are only further evidence of disruption.

But her critiques of Christensen are not actually of modern start-up culture and its celebration of disruption and failure (except obliquely and culturally). Instead, Lapore is mostly concerned with steam shovels, 3.5″ disk drives, and mass transit.

And that’s where the evolutionary comparison comes in again. Where multiple experimental tests can be applied to a problem or, as economists put it, a need, minor variation is the standard mechanism (as Lapore asserts). Major variation is the exception and small tweaks like externalizing new businesses (Kresge’s Kmart, etc.) are inconclusive in their effectiveness. But in start-up world, everything is externalized from risks to rewards.

So is there a take-away from the filtered and refined view of innovation and reinvention? Perhaps only that disruption may be best handled through complete externalization of the innovation process; make strategic investments and nurture businesses based on their own market opportunities. The best we may be able to do is play a volume game where we do exactly what the venture capitalist does and accept that only 1 in 10 investments will thrive or excel. We don’t need just so stories then, just a realization that we can’t read the tea leaves of the past as just so stories for the future.

From Smith to Darwin

The notion that all the contingencies of human history can be rendered down into law-like principles is the greatest reflection of the human desire for order and understanding. Adam Smith appears in that mirrored pool alongside Karl Marx and, in his original form, even Charles Darwin. That’s only the beginning: Freud, Machiavelli, Rousseau, Hegel, and a host of others are reflected there in varying, and transitory clarity.

Adam Smith is a iconic case, as I discovered reading Adam Smith’s View of History: Consistent or Paradoxical? by James Alvey. The paradoxical component arises from a merger of a belief in the inevitability of commercial society and, at various points in Smith’s intellectual development, a cynicism about the probability of forward progress towards that goal. Ever behind the curtain, however, was the invisible hand represented by a kind of teleological divine presence moving history and economics forward.

The paper uncovers some of the idiosyncrasies of Smith’s economic history:

[T]he burghers felt secure enough to import ‘improved manufactures and expensive luxuries’. The lords now had something beside hospitality for which they could exchange the whole of their agricultural surplus. Previously they had to share, but ‘frivolous and useless’ things, such as ‘a pair of diamond [shoe] buckles’, and ‘trinkets and baubles’, could be consumed by the lords alone. The lords were fascinated with such finely crafted items and wanted to own and vainly display them. As the lords ‘eagerly purchased’ these luxury items they were forced to reduce the number of their dependents and eventually dismiss them entirely.

The lords ultimately have to trade off economic freedom of the artisans in exchange for more diamond shoe buckles. Odd, but perhaps reflective of the excesses of the wealthy in Smith’s era–something that needed explanation.

And what is the connection to Darwin? Darwin, in the automaticity expressed by that invisible hand (and the progress of history), saw a way to explain the natural order of the biological world, and this argument has continued to this day.