Here is the full transcript of American scholar Clay Christensen’s TEDx Talk presentation: How Will You Measure Your Life? at TEDxBoston conference.
Listen to the MP3 Audio: How Will You Measure Your Life by Clay Christensen at TEDxBoston
Thank you very much. The world is, in many ways, organized in a nested system. And so we have nations. Within those we have industries; within industries we have corporations; within those we have business units; within those we have teams; within the teams we have people; and within people we have brains. And we are nested.
It turns out that, as I have and my colleagues have tried to understand how business works, we’ve developed a set of theories. And when I say a theory, what I mean is a statement of causality, an understanding of what causes what and why. And some of you know some of the theories. Disruption is a theory. And what it asserts is that the mechanism that causes successful companies to fall, is not that they’re not at their work, but rather somebody comes in at the bottom of the market and moves up. And that’s the mechanism, the pursuit of profit from at the bottom of the market that makes success so hard to sustain.
There’s another theory, called the theory of preservation of modularity — the theory of preservation of modularity explains among the other things why the Euro doesn’t work and why SAP implementation systems are so difficult and complicated. And there’s another theory called ‘jobs to be done’ and what it asserts is that, you know, here’s Clay, I have characteristics. I unfortunately am 60 years old now, I live in the suburbs, 5 children, unfortunately have all left and are living independently and life has become boring. But the fact that I have those characteristics, doesn’t cause me to go out and buy the New York Times. There might be a correlation between my characteristics and the propensity to buy the New York Times, but the characteristics don’t cause me to do anything.
What causes us to do something is there’s a job that arises in our life and we have to get the job done. And what causes us to buy a product or services is, we have to reach out and find something that can do the job and pull it into our lives, and that’s the causal mechanism behind a purchase, is understanding what’s the job and the insight there is that their customer is the wrong unit of analysis, it’s the job that we need to understand.
So these are all theories and some of you know those, and a number of others from our research. What we have learned and inadvertently in many ways, is that these statements of causality apply at every stage in this nested system. And so the theories help us understand why nations lose their competitiveness, why Japan was so successful and then died, for example, and why America finds it so hard to regain our momentum, and that goes all the way down to the point of teams.
Well, a number of years ago in my course at the Harvard Business School, in this course we study these theories, try to understand them, then put these theories on like a set of lenses and examine companies, or economies or industries and try to understand, can we understand why things are happening the way they are happening, and what actions would lead what results. At the end of the course on the last day rather than asking them to just put on these lenses and examine yet another company, I ask them to look in the mirror and ask them, can you explain why your life is the way it is today, because of these theories? And can you predict what will happen in your life, if you continue to do what you are now doing? And it’s been a remarkable experience to see the students come back on the last day of class. And with causal theories, is the explanation what they need to change in their lives so that, their life will be the life that they had hoped to live.
And I thought, I’d just offer a couple of these in the hopes that as entrepreneurs and ambitious people you end up living the life that you hope you will live. So one of the things we observed as I mentioned is that, what kills successful companies is somebody comes in at the bottom of the market. So if you go back a few years ago in telecommunications, the darlings of the industry were Lucent and Nortel, made circuit switching technology and this rusty little or small company not very consequential called Cisco emerged. And 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. And the reason why is that when they look down at a router, the router on every dimension wasn’t as good, and so they kept making better and better circuit switch devices.
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.