Intended Revolution with Unintended Evolution: The Case of Proactive Self-Disruption

Abstract

How does proactive self-disruption—from search for breakthrough to revolutionized industry—unfold? Many incumbents fail when their industry change, yet others, putting their own dominant positions at risk, change their established industries. Such self-disruption is challenging, and unattractive for investors and CEOs. Where CEOs are contracted for periods, disrupting with radical technological innovation takes a decade or more. Using literature on absorptive capacity as a dynamic capability of disruptive technologies, we extend explanations of established firms’ failure that converge in pointing to attachments to history as a handicap. Examining this point empirically, we followed the tradition of in-depth historical case studies (e.g., Tripsas & Gavetti, 2000; Danneels, 2011). A longitudinal research design allowed us to track how Asea Brown Boveri invented the HVDC Light technology and renewed its power system market leadership by disrupting its industry. Our findings show that proactive self-disruption is promoted by the CEO and middle managers, but its realization depends on differentiated temporal roles of middle managers’ persistent use of history in relation to stakeholders. We present a conceptual framework that explains how incumbents self-disrupt by relying on the stories that middle managers tell.