Disruption has something more to teach us

Over the 25 years that I was blessed to know and learn and collaborate with the late Clayton Christensen, he used these words regularly, and none of his theories have proven more powerful or enduring than Disruption.

Thirty years after Clay introduced Disruption to the world, our research has found that, true to Clay’s conviction, the theory has more to tell us. 

To refresh, the mechanism Clay identified was precise. Incumbents, locked in competition with one another, keep improving products along the dimensions their most profitable customers reward. Over time, they “overshoot”—delivering more performance than mainstream customers actually need or will reward. That overshoot opens a gap at the low end of the market. A new entrant fills the gap with a cheaper, simpler solution. Incumbents, rationally indifferent to a segment they don’t value, look away. By the time they look back, it’s too late, as disrupters move upmarket, progressively gaining share and momentum.

The theory has proven remarkably durable. Managers who understood it could disrupt rather than be disrupted. Steve Jobs noted that Innovator’s Dilemma was the only business book on his shelves.

When incumbents obsessively improve on a narrow set of established performance dimensions, they do two things simultaneously. First, they open the low-end gap that Christensen described. Second—and this is the insight we want to develop here—they become progressively blind to the possibility that many customers might want something fundamentally ‘different,’ not merely something cheaper.

We use the term “competitive convergence” to describe this second dynamic of firms relentlessly improving a narrow set of performance dimensions, and we have found it in online streaming, professional services, fast food, steel manufacturing, insurance, pharmaceuticals, consumer finance, and dozens of other industries. Diverse competitors, seemingly pulled by an invisible force, lock onto a small set of functional benefits and compete on them ferociously—sweating assets, cutting costs, layering on features—while remaining collectively blind to the fuller range of outcomes their customers actually seek. Given a hammer, as Mark Twain noted, everything looks like a nail.

The consequence for customers is a persistent and recognizable experience: “You’re not getting me.”

The opportunity, for the rare company that redefines the basis of competition, is transformational growth. What we want to share here is a description of the underlying phenomemon, as well as its causes, fixes, and associated opportunities.

When we began working with leaders of a major fast-food chain—not McDonald’s, but deeply envious of McDonald’s massive breakfast business—they were hardly passive. They had invested heavily in a new coffee program, an upgraded toaster, enhanced digital menus, a new biscuit recipe, and fresh-cracked eggs. They were attacking service times and developing an experience concept for a more relaxed weekend vibe. It was a sustained, multi-year campaign, but the results were negligible.

Running out of patience and ideas, leadership dared to ask a harder question: “What if everything we assume to be true is wrong?” A CMO-led team approached customers with genuine curiosity, studying visitors at their own restaurants and competitors’ alike, attentive to any behavior that ran counter to expectation.

The discoveries were startling. Their model of the weekday customer mindset was upside down. What they craved, more than speed or egg quality, was a moment of genuine human connection before clocking in to jobs they found monotonous and impersonal. Value was less about a hot breakfast than a warm welcome—a meal prepared with visible care. They weren’t in nearly the rush that management had assumed.

Weekend guests were the opposite—genuinely time-pressured, eager to get on to kids’ sporting events or complete household errands. The reason to eat out wasn’t ambiance; it was momentum. Get in, get fed, stay on the move.

The team also recognized something the category had collectively missed: for every customer McDonald’s was attracting, there were multiples more who were open to a fast-food breakfast but rarely chose one because no brand truly delivered their desired experience. The real competition wasn’t the Golden Arches—it was energy bars, cold cereal, frozen waffles, and empty stomachs. Growing the category by converting light users and non-consumers was far more achievable than a frontal assault on the market leader. Unsurprisingly, it’s easier to compete against a crummy morning than a tasty Egg McMuffin.

The implications for strategy were immediate and counterintuitive. The team dialed back costly investments in product and technology and redirected focus to micro-conversations with guests, to-go bags packed with visible care, encouraged customization, and the elimination of overfull trash cans (a salient proxy for care and cleanliness). These were less expensive moves and far more impactful. They shifted basis of competition from product attributes to human experience and avoided, rather than confronted, McDonald’s McMuffin advantage.

The same dynamic operates, perhaps surprisingly, in industrial markets. Consider a steel manufacturer with a proud legacy of industry leadership—not just in volume, but in profitability, asset utilization, return on equity, and safety. Competitors were catching up. Vertical integration, upstream into raw materials and downstream into engineered products, had yielded gains that rivals targeted as well.

The CEO, a trained engineer, had read an Harvard Business Review article that Clay and I wrote with Intuit Founder and former CEO, Scott Cook, wrote featuring the case of a fast-food chain that transformed its milkshake business by rigorously understanding the circumstances in which customers “hired” the product. The CEO was struck by the painstaking attention to the full customer experience and by the unexpected discoveries it generated. He wondered: might a steel company, of all things, be missing something similar? “How well do we know our customers – not just who they are but what are they struggling to achieve and what do roomy words such as quality, value, and performance mean in the specific instances in which customers buy and use our products?”

Critically, he knew that these were unfamiliar questions and would require distinct mindsets and capabilities to address. He created a new senior executive post reporting directly to him who would own the challenge. In a rare move they also recruited a senior leader who would own a focus on enabling customer progress in the form of specific, comprehensive solutions, which was a very different approach from the traditional product-oriented organizational structure. Finally, and perhaps most importantly, this newly configured team partnered with outside experts to do deep qualitative research to immerse in their customers’ experiences with fresh eyes and open minds. The exploration extended beyond direct customers (distributors) and the construction firms that installed their steel, all the way upstream to the architects and designers who specified materials and wrestled with the hardest design challenges.

What they found was that the company’s deep metallurgical knowledge was relevant to architects and designers when trying to solve complex structural challenges. Value was less about cheap steel and delivery times and more about expertise to realize ambitious design visions.

What was true in construction applied to energy and automotive customers as well and triggered a structural reorganization: from a product-centric commercial model, the industry-wide standard, to a solutions-focused organization built around key industries. The old basis of competition reflected a commodity mindset. The new basis of competition embraced an innovator’s mindset in which competition wasn’t about steel grade or price per ton. It was the ability to help customers solve complex problems they couldn’t solve alone. Volume and margin expanded significantly. Not by winning a larger share of the existing competitive pie, but by redefining what the pie was—hich also expanded the market opportunity to challenge wood and steel in select projects.

These cases are not outliers. We have studied the same dynamic across a wide range of sectors, and in each case the category-creating moves follow the same logic: established players converge on a narrow set of functional dimensions, a challenger exploits neglected dimensions of customer desire, growth accelerates, and categories transform and expand.

A few further examples:

• Online education: Incumbents competed on catalog breadth and brand prestige. The category creator—Southern New Hampshire University—reconfigured to address the specific barriers that prevent working adults from completing degrees: scheduling inflexibility, credit transfer friction, cumbersome transcript request requirements, family commitments, and financing concerns. SNHU didn’t build a better university. It redefined what a university was for in ways that systematically addressed the students’ friction points.
  
  
• Home audio: The category competed relentlessly on audio quality in pursuit of audiophiles. Sonos reframed around the actual barrier keeping most households from great audio: the hassle of wired installation, the complexity of multi-room setup, the intimidation of traditional hi-fi. By competing against the frustration of non-consumption rather than against Wilson Audio or Bang & Olufsen, Sonos opened a market that audiophile brands had rendered inaccessible to ordinary people.
  
  
• Home security: The category competed on equipment quality and monitoring response times. SimpliSafe reframed around the barriers that kept most households unprotected—installation complexity, long contracts, and high up-front costs. By competing against non-consumption rather than ADT, the total addressable market expanded dramatically.
  
  
• Toys: Mattel and others competed on product features, licenses, and price points. American Girl reframed the category around intergenerational connection—shared stories between mothers and daughters, historical identity, curated experiences. The doll was secondary.
  
  
• Used cars: Dealerships competed on inventory breadth and negotiation leverage—a model that treated buyer discomfort as a feature, not a bug. Carvana reframed the category around the transaction experience itself: no dealers, no lots, no pressure, transparent pricing, and delivery to your driveway. By treating the purchase process as the product, Carvana unlocked a vast population of buyers who had been avoiding the category except out of desperation.
  
  
• Jet engines: For decades, engine manufacturers sold aircraft engines to airlines on the basis of thrust, fuel efficiency, and unit price—the established dimensions of the category. Rolls-Royce reframed around what airlines actually needed to buy: guaranteed operating hours. The resulting “power by the hour” model—pioneered by Rolls-Royce in the 1960s—shifted the company from a manufacturer into an outcomes partner, aligning its incentives directly with airline performance rather than equipment sales. Margins expanded. The category was transformed.

In every case, the pattern is the same. Competitors converge. A gap opens—not a price gap, but a meaning gap. Innovators exploit the opportunity. This is the second lesson of disruption theory: overshoot doesn’t only create low-end price opportunities. It creates category-wide experience opportunities.

If the opportunity is so pervasive, why do so few firms pursue it? Our research points to three forces that are widespread, largely independent of industry, and surprisingly resistant to good intentions.

Large, successful organizations are purpose-built to execute a specific strategy. The resources, processes, metrics, incentives, and governance structures of an established firm are not incidentally aligned to the existing basis of competition—they are constitutively aligned to it. To paraphrase quality theorist and manufacturing icon W. Edwards Deming: every process is perfectly designed to produce the outcomes it produces. Established firms pursue Deming’s drive for zero defects by building capabilities with near zero flexibility. Lean operations optimize for efficiency and productivity, framing anomalies as the enemy rather than as opportunity.

This is not laziness or incompetence. It is the natural consequence of institutional success. The same organizational configuration and focus that made a company dominant on functional dimensions will actively resist—through resource allocation decisions, performance reviews, and customer surveys—any initiative that doesn’t fit the established model. Near-term revenue requirements, IRR thresholds, requests from best customers, and ROA targets effectively torpedo opportunities that deviate from selling more of what already sells.This creates a trap: the same qualities that make a credit union feel personal can make it feel small. State Farm has spent decades solving exactly this problem without abandoning its neighborhood-agent model—it just built the infrastructure, claims systems, and brand presence to make “local” and “everywhere” the same promise instead of competing ones. Credit unions have the same opening: shared branching, digital infrastructure, and a brand system strong enough to travel, ultimately making “rooted or reachable?” a false choice.

To understand competitive convergence, it helps to see it first through a personal lens. I careened into the Apple Store in Turin, Italy, in full-blown personal crisis. Phone broken. Dinner in two hours. Flight out in the morning. The store eventually fixed the phone—a new screen for €200, delivered minutes before closing. Technically competent. Functionally adequate.

But the experience raised a more interesting question: what if Apple recognized it wasn’t in the phone-repair business, but in the personal-crisis-management business? More specialists. No jostling for attention. A loaner device with a repair tracker. Refreshments. A waiting experience calibrated to someone whose emotional state had fully overwhelmed rational thought. Apple could have charged double. They could have won my brand loyalty not just my €200: “you rescued me” is more valuable than “you fixed my device.”

Apple is not in that business—yet. Neither are most of its competitors. That’s the point. The entire category is focused on repair quality and wait time, not on the existential experience of device dependency. The performance gap Christensen identified has been largely closed in consumer electronics. The meaning gap has barely been touched.

Scale that observation to an industry—and across virtually every industry—and the magnitude of the opportunity emerges. It’s a bit like seeing the arrow in the FedEx logo for the first time: once you see it, you see it routinely.

Data is the lifeblood of organizational decision-making—but data models are necessarily incomplete representations of a far more complex reality. Most models reflect what has happened not what might happen. Prospective buyers who aren’t shopping the category because no vendor adequately addresses their full set of criteria don’t appear in market share data, customer satisfaction surveys, or competitive analysis. They simply don’t exist in the model.

Clay made a sign that hung in his office that read “Anomalies Wanted.” It was a reminder that the signals of category-creation opportunity often appear first as unexplained behaviors: customers cobbling together their own solutions, using products in unintended ways, or simply going without. These anomalies are the data, but they are raw data and in the form of a story not a statistic.

The third force is psychological. Managers who have ascended within a particular strategic framework develop an entirely understandable attachment to its continuity. If the current basis of competition has provided the conditions of their success, questioning it requires not just intellectual openness but a kind of professional courage—the willingness to suggest, implicitly, that the strategy they developed, implemented, and championed may have shortcomings.

Status quo bias is compounded at the category level. When every competitor in an industry is optimizing on the same dimensions, those dimensions come to feel like laws of nature rather than strategic choices. The fast-food chain’s leadership had been improving menu items, LTOs, and service times for years not because those were the only possible dimensions of competition, but because those were the dimensions on which everyone competed. The category’s shared assumptions had become invisible. 

Finances further reinforce the status quo. Despite executive exhortations for risk-taking, incentives typically reward safer, incremental improvements. Category creation is hard work.

The first and most fundamental step is also the hardest: entertain the possibility that the established basis of competition does not reflect comprehensive fulfillment of customers’ requirements. This sounds simple. It is not. It requires leaders to question assumptions that the entire organizational culture treats as settled—and to do so at a moment when the pressure to execute on existing priorities is highest.

The fast-food CMO who asked “what if everything we assume is wrong” was not engaging in philosophical speculation. She was making a deliberate, disciplined choice to suspend category orthodoxy long enough to see something new. That choice, more than any subsequent investment, was the touchstone of the eventual advantage.

Aperture-opening is necessary but not sufficient. The experience gap has to be mapped with the same rigor that incumbents apply to product benchmarking and market share analysis. We have a methodological preference for Jobs to be Done research—the approach Christensen developed and that we have applied across dozens of industries—because it is specifically designed to reveal the full array of functional, emotional, and social criteria that drive customer choice. Other approaches, including traditional in-depth interviewing and ethnographic observation, can work. What they share is immersion in the granular circumstances of individual customers—the specific moments of struggle, workaround, and unmet aspiration that quantitative survey data systematically obscures. 

Anomalies are wanted because averages are the enemies of insight. The opportunity almost never appears in the mean. It appears on the fringes—the unexpected behaviors, the curious hacks, the customers who have given up entirely. The steel team found its insight not by surveying distributors, but by going two steps past their direct customer to talk with architects. The fast-food team found theirs not by improving on existing metrics, but by creatively exploring the drivers of experience that make for a good morning vs a bad one. Mountain Dew Kickstart delivered over a billion dollars of incremental revenue to the brand when a team explored why people were starting their days with a stop at a convenience store, mixing orange juice and a Mountain Dew in a to-go cup.

Once the experience gap is mapped, the organizational work begins—and this is where established companies most reliably stumble. The temptation is to assume that existing capabilities can be “leveraged” or that teams can be “agile” enough to address the new basis of competition. They typically cannot. Capability configurations are far less flexible than leaders presume, and the organizational immune system is specifically calibrated to reject initiatives that don’t fit existing metrics and incentive structures. Does anyone remember Ted by United Airlines or Delta Song?

Category creation requires dedicated investment: new resources, new processes, and critically, new metrics and governance structures that allow the new proposition to be measured on its own terms rather than held to the standards of the existing business. Executives at Campbell’s Soup know that canned soup will continue to decline, but through the lens of existing economics, most new ventures look like lousy investments. By contrast, the steel manufacturer mentioned above didn’t try to layer solutions-selling onto a product-centric organization. It reorganized around industry verticals—a structural commitment, not a pilot program.

The final step is often underestimated. A superior proposition that customers cannot find, or cannot decode, produces no growth. Brand must play an active and heavyweight role in making the new basis of competition creation: surfacing the proposition in the right contexts, signaling it clearly, and making it easy for customers to pull the brand into their lives.

This is particularly important in categories where the old vocabulary is deeply entrenched. The brand is not decoration on top of the strategy. It is the mechanism by which the new category logic becomes visible to the customer.

The theory of disruptive innovation changed how managers think about competitive strategy. It gave leaders a framework for understanding why successful companies fail—and, crucially, how to use that understanding offensively. The managers who internalized it didn’t just avoid disruption. They became disruptors.

The framework we have described here is not a replacement for Christensen’s insight. It is an extension of it. Both phenomena—low-end disruption and category creation—are consequences of the same organizational tendency: established players improving on established dimensions, rationally and relentlessly. Success and surveys reassure leaders that they know what customers want.

The difference lies in the nature of the opportunity each creates. Disruption exploits the price gap that overshoot opens at the bottom of the market. Category creation exploits the experience gap that competitive convergence opens across the entire market. Both are real. Both are large. And both are largely invisible to the incumbents who create them—which is what makes them opportunities.

Managers who understood disruption theory learned to ask: “are we overshooting on performance, and who might attack us with simpler, cheaper offerings?” The extension we propose adds a second question: “are we so focused on current customers that untapped markets are growing in places we’re ignoring?”

Leaders who ask the second question—and act on the answer—are not going to focus on competing for a larger share of an existing pie. They bake a bigger one.

¹ “Marketing Malpractice,” with Clayton Christensen and Scott Cook in HBR, December 2025