The Business of Life

08/16/2011 04:10 pm ET | Updated Oct 16, 2011

In the spring of 2010, Clayton Christensen, a professor at Harvard Business School, delivered an unorthodox speech to the graduating class. The students who invited him were already familiar with his concept of "disruptive innovation", the term he has famously used to describe simple technologies that overthrow entire industries. But these students wanted something more. Having just emerged from the forced introspection of the Great Recession, they wanted Christensen to reveal the meaning of life.

One of the world's leading business strategists, Christensen has devoted his life's work to understanding why great companies fail. Now he was being asked to explain why great people fail. To a packed campus auditorium, Christensen described the disturbing experience of returning to HBS, his alma mater, for class reunions. "By the 20th, and especially the 25th reunion, it was just shocking what a huge portion of my classmates came back here or didn't come back because they were divorced or their children were being raised on the other coast, totally alienated from them," he lamented. "And they came back, those who came, with a lot of money, but a lot of them were broken people."

Christensen made a name for himself in the late nineties with The Innovator's Dilemma, a book that explains his theory of disruptive innovation -- the process through which a simple new product or service upends established industries. Digital photography, mobile phones and online shopping are all examples of disruptive innovations. The prospect of the next disruptive start-up -- the next Netflix or iTunes -- tends to fill otherwise healthy corporations with dread. Today, many of these new products and processes are now coming from emerging markets, or from individuals exploiting a business climate where barriers to entry in many industries are remarkably low.

"These days, market futurists and business wonks rarely have a meaningful economics discussion without using the term 'disruptive technology,'" observed McKay Coppins in Newsweek magazine last year. Indeed, Christensen has applied his theories widely -- to business management, education and health care. He wants organizations to understand that designing new products and business models that are good enough to meet the needs of large and different market segments is often a better strategy than making stuff that is more complicated or more expensive. Andy Grove, the former Chairman of Intel, credits Christensen with inspiring the launch the low-cost Celeron processor. As Grove said at the time, "If we lose the low end today, we'll lose the high end tomorrow."

At the same time, Christensen has attracted a cult following who believe that his theories can be applied to all aspects of life. Two years ago, Craig Hatkoff, a real-estate investor and author, launched the Disruptive Innovation Awards at The Tribeca Film Festival, which he co-founded. Video from the ceremony shows Christensen rubbing shoulders, a bit uneasily, with Robert De Niro. Hatkoff says disruptive innovation is a philosophy that resonates far beyond business strategy. He and Irwin Kula, a rabbi and public intellectual, are working on a book that applies Christensen's theories to religion and spirituality.

At Harvard, Christensen teaches a course called "Building and sustaining a successful enterprise," which uses case studies to consider different management approaches. Each semester, after months of rigorous examination of his key business theories, he devotes his final class to the business of life. For this, he asks his students to consider three big questions: How can I be sure that I'll be happy in my career? How can I be sure that my relationship with my spouse and my family are an enduring source of happiness? And how can I be sure I'll stay out of jail? This last question is not a joke. Christensen notes that of his 32 fellow Rhodes Scholar classmates, two spent time in prison. Enron's Jeff Skilling was his classmate at HBS. Students are meant to consider these questions in the context of a semester dedicated to strategic decision-making. In every case, Christensen says, his students uncover profound insights that apply to their personal lives.

The question of how to live a meaningful life took on special urgency for Christensen when, in 2009, he was diagnosed with follicular lymphoma, a type of cancer. The prognosis for patients tends to be bleak, but he was able to return to work five months later. A lifelong member of the Church of Jesus Christ of Latter-Day Saints and a former missionary in South Korea, Christensen started thinking more about how he could use his own life as a case study -- to help reveal lessons for fulfillment beyond the billions of dollars in capital generated by the successful application of disruptive innovation. In his last class, he talked about the nobility of management, the problem with money, and the necessity of finding a clear life's purpose. For Christensen's students, who matriculated the same month as the collapse of Lehman Brothers, these ideas were exceptionally powerful. "It's the one class we would still remember at our 50th reunion," says Christina Wallace, a student who asked the administration to host a special lecture based on this last class, for the entire class of 2010.

Christensen's lecture underscored the philosophical recalibration that was happening in business schools around the world. "People who have a high need for achievement have this unconscious propensity to under invest in their families and over invest in their careers," Christensen said. "And I just want to let you know having experienced it in my life and having watched it with my classmates and with thousands of students, that the most enduring and deep source of happiness and satisfaction in your lives will come from intimate relationships that you cultivate with the members of your family and with your close friends."

Around the time of Christensen's talk, Karen Dillon, editor of the Harvard Business Review, was interviewing graduating students about their expectations upon entering the job market and whether their views on happiness and success had changed since the financial crisis. "A lot of the kids were talking about Clay's address, especially in the context of his illness", she says. "So I asked him if we could turn it into an article." The subsequent piece, "How Will You Measure Your Life?" spread like wildfire on the Web, becoming the most popular HBR article of 2010 in terms of traffic. Business blogs linked to it. David Brooks wrote about it in The New York Times. In the article, Christensen used business school language to communicate his ideas about life, family, and priorities -- Create a strategy, allocate your resources, create a culture, avoid the "marginal costs" mistake, remember the importance of humility, choose the right yardstick.

Christensen's notions about how to live a meaningful life are hardly disruptive. In the marketplace of ideas, they are the established incumbents that have been fending off disruptive innovators for millennia. In a newly humbled economy searching for new definitions of value, they have renewed relevance.