Clayton Christensen was one of the most influential business theorists of the last 50 years. The Harvard Business School professor’s 1997 book, The Innovator’s Dilemma, introduced in elegant terms the notion of “disruptive innovation,” which explains how cheaper, simpler or unexpected products and services can bring down big companies like U.S. Steel, Xerox and Digital Equipment. Everyday business leaders called him or made the pilgrimage to his office in Boston, Mass. to get advice or thank him for his ideas. A consulting firm he started popularizes his work, while a hedge fund run by one of his sons puts money to work betting on disruptive technologies.

One industry that always eluded Christensen’s influence was health care. Caregivers and insurers told him his theories didn’t apply to their complex industry. Christensen knew they were wrong. His investigation culminated in his 2009 book, The Innovator’s Prescription, written with two doctors. It exposed the many ways health care was broken and recommended numerous ways it can be systematized and disrupted the same way mainframes gave way to PCs and now iPhones.

Christensen’s work took on new urgency the past few years as he suffered a heart attack followed by cancer followed by a stroke. For Christensen it was not a reason to get too upset. It was another opportunity, in a lifetime full of them, to gain insight into how to make the world work better. Because of his July stroke it took a long time for Christensen to be ready to sit down with FORBES. He was in intensive speech therapy, eight hours a day at the beginning. But he graciously agreed to tell his inspiring story in January, the same month he went back to teaching. Here it is in his words, along with those of his family, friends and close colleagues.

Clayton Christensen, in his own words:

My dad died at age 49 from Hodgkin’s Lymphoma. A wonderful dad. Even back then in 1975 the probability that it would go into remission was about 80%. So I happily went off to Oxford. Once I was there for six weeks it was clear that he was in trouble. The Rhodes Trust was just marvelous. I went to talk to the warden Sir Edgar Williams and after two minutes he said, “We’ll send you home. You can come back next week, next month, next year, ten years from now.” I was with my dad for the last two months before he died. It was the most wonderful, happiest experience of my life to take care of my dad.

He worked for a department store in Salt Lake, ZCMI. As we were growing up he took us to work on Saturday to help him put the food on the shelves. I knew his job pretty well. I kept it up [after he got sick]. That kept us on the same salary and insurance. He dictated to me his life history. Most I’d heard before. I put it together into a biography. It’s been a wonderful thing. As my kids grew up, on Sunday morning I’d say, “Okay, guys, read pages 20 to 30 in Grandpa’s biography, and let’s talk about what it means for us.”

My mom also died of cancer. She was 82. . . . As Mom was getting older, she was excited, truly excited, that within a few years she’d be with Dad again. I’ve known people who wanted to die, but most of them were so miserable they wanted to escape it. But in this case my mom was healthy. She didn’t want to live too long that she couldn’t take care of herself. She was so excited when her doctor said that she had pancreatic cancer and likely would only live six or seven weeks. She had a great life and a great family. “Now I can see your dad again,” she told me. . .

I got Type 1 diabetes at 30. It hit me in 1982 when I was a White House Fellow in Washington. I had viral pneumonia. I lost 35 pounds in six weeks. And I couldn’t see anything. Everything was blurry. I was always thirsty. . .

I called a friend who was a doctor in Boston, and he immediately diagnosed it: “Oh, you have diabetes.” I called my wife and said, “Oh, Christine, I am so relieved I have diabetes. I thought I was going to die of cancer.”

Diabetes is a great example whereby giving the patient the tools you can manage yourself very well. It’s been 28 years. If you have too much insulin your blood sugar drops and your brain shuts down. I’ve only lost consciousness four times in all of those years. The reason is that I test my blood sugar seven times a day. If it’s too low I have a Snickers bar. If it’s high I take a shot. And sometimes I am so desperate for a Snickers bar I give myself insulin so I can have one. I figure if I live a normal life, I will take about 90,000 shots.

Editor’s note: Once when I was an invited guest at the World Health Care Conference in Washington, DC, it never occurred to me that Dr. Christensen’s occasional interruptions were due to his glucometer readings.

FORBES

In November 2007 Christensen had a massive heart attack while the book The Innovator’s Prescription: A Disruptive Solution for Health Care was in its final stages as a manuscript.

Dr. Jason Hwang (coauthor of the Innovator’s Prescription)

With angioplasty you blow up a balloon [in the artery] and it breaks up a clot. Angioplasty started with balloons that didn’t work that well because the vessel would clamp down. It had a very high failure rate. But then you added stents to reinforce the vessel, and then drug-coated stents, and the technology of angioplasty marched upward. As it gets better it can get more expensive, which opens the door to a new disrupter.

Clayton

The problem from the patient’s point of view is that we don’t know what we don’t know and therefore we don’t ask what otherwise we would want to ask. When you have handoffs from many to many, as in a hospital, the probability that things fall through the cracks are just high. It has nothing to do with how good the individual people are. . .

Dr. Christensen studied the Michigan Manufacturing Company. It had nine auto parts plants. One in Pontiac, Mich. had a mission to make any product for any customer. So you could run the steel through different types of machines in any sequence. It had about 20 different sequences and it was expensive. At the other end of the spectrum was a plant in Maysville, Ohio that just had two pathways. It could make parts at a very low cost. A hospital is like the Pontiac plant.

As we did the study, we realized that every time you double the number of pathways you raise overhead by 30%. It was not that the Pontiac plant was badly managed. It just had a different mission. When I present a diagram of the plants’ pathways to a group [with arrows between machines], I ask: “What if I took the names of the machines off? Is it still a diagram of an axle plant–or a hospital?” Our research has found 125 different pathways through a hospital. That’s why 85% of hospital costs are overhead. . .

We have accumulated data in our HealthPlanUSA supporting Dr. Christensen’s idea that health care can be market based. We  have unified these 125 pathways into three more likely than not resulting in a 50 percent cost savings. Only the patient and the doctor are in charge eliminating insurance and hospital control. The patient pays in cash for the inexpensive basic healthcare and only needs insurance for hospital, surgery, emergency and trauma care above his basic care.  Insurance doubles the cost of basic healthcare care—office calls, routine lab and x-rays.

WSJ | Jan. 24, 2020 | By James R. Hagerty

In the 1990s, he warned entrepreneurs against being so focused on pleasing their current customers that they missed shifts in technology that could render their firms obsolete. “To remain at the top of their industries, managers must first be able to spot disruptive technologies,” he wrote. Doing that, he said, required creating organizations independent of the mainstream business.

In his 1997 book, “The Innovator’s Dilemma,” he wrote that companies could lose their way by doing two things managers were taught to do in business school: listening to their best customers and focusing investments on innovations promising the highest returns. Those practices could be disastrous if they prevented executives from spotting the potential for disruptive technologies arising from the low end of the market.

Digital Equipment Corp., he wrote, was so focused in the 1980s on its high-end minicomputers that it was blindsided by the arrival of desktop computers able to satisfy many corporate needs more cheaply.

Standing 6-foot-8, he played basketball in high school and college. . . As a member of the Church of Jesus Christ of Latter-day Saints, he recounted a tough decision he made to skip a Sunday championship game for his basketball team at Oxford University. “Had I crossed the line that one time, I would have crossed it over and over in the years that followed,” he wrote.  

I am grateful that Vidar Jorgenson twice invited me to his World Health Care Congress in Washington DC, because of his reading of MedicalTuesday, and each time I had the privilege of hearing Dr. Christensen present his data personally to this International Gathering—Del Meyer.

FORBES The Survivor March 2011

WSJ OBITUARIES  Jan 2020

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