Russ Volckmann

Stuart L. Hart and Clayton M. Christensen, “The Great Leap: Driving Innovation from the Base of the Pyramid,” MIT Sloan Management Review, Fall 2002, 44,1.

This article represents a larger view of leadership, business leadership, in the sense of a system leading on a developmental edge in a way that transcends many of the issues we face as a people on the planet earth. It presents a systemic developmental perspective that transcends and includes notions like that of Jonas Ridderstrale and Kjell Nordstrom of the Stockholm School of Economics, Funky Business: Talent Makes Capital Dance (2000):

“Traditional roles, jobs, skills, ways of doing things, insights, strategies, aspirations, fears, and expectations no longer count. In this environment, we cannot have business as usual. We need business as unusual. We need different business. We need innovative business. We need unpredictable business.”

Hart (University of North Carolina) and Christensen (Harvard Business School) argue for an economic development approach they call “disruptive innovation.” Building on their work with C.K. Prahalad and others the authors offer an economic development strategy for generating growth and satisfying social and environmental stakeholders by building industries that help to lift the huge proportion of our fellow human beings out of poverty.

Part of what is interesting and integral about their approach is that it transcends and includes developmental levels. First, it offers a path for sustaining the economic viability of private industry in the world. Second, it offers a path to providing economic opportunity to the poor. Third, and not the least important, it provides an approach that will help us address the degradation of the ecology.

“Keep in mind the fundamental conditions that lead to the success of a disruptive innovation. The product or service must be one that initially isn’t as good as those being used by customers in mainstream markets; as a result it can take root only in new or less demanding applications among non traditional customers….

“Disruptive innovations allow many more people to begin doing things for themselves that could only be done either with the help of skilled intermediaries or by the wealthy before the disruptions…The social good is well served through disruption which has, over the decades, created millions of jobs, generated hundreds of billions of dollars in revenues and market capitalization, and raised standards of living by making available cheap, high-quality products.”

The authors provide several examples of disruptive innovation. For example, a company in Bangladesh provided wireless service to rural villages. Women in the village were given the technology and, as a result, increased their incomes, raised their status, and reduced the time and travel required by farmers and other villagers to connect to markets and suppliers. This even cut back on the costs of using fossil fuels required for travel. Even the phones are charged with photovoltaics.

The authors conclude “that existing mainstream markets are the wrong place to look for major new waves of growth.”

“Global companies that follow the principles of disruptive innovation and set their sights on the developing world will not simply be taking a leap of faith. By taking a great leap to the base of the pyramid, they will be giving themselves a chance for sustained corporate growth while also helping to lift the poor out of poverty and opening the way to sustainable growth for the global economy.”

This article is an example of the kinds of shifts in thinking that are possible when we approach the challenges of the world integrally. Rather than trying to dispose of the market system in some fashion or another, it is time to shape it so that it can enhance the well-being of all on earth.

> Russ Volckmann