How will you measure your life? | Clay Christensen | TEDxBoston

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"It's actually really important that you succeed at what you're succeeding at, but that isn't going to be the measure of your life."

Too often, we measure success in life against the progress we make in our careers. But how can we ensure we're not straying from our values as humans along the way? Clayton Christensen, Harvard Business School Professor and world-renowned innovation guru, examines the daily decisions that define our lives and encourages all of us to think about what is truly important.

Thank you very much.

The world is, in many ways,
organized in a nested system.

And so we have nations,

within those we have industries;

within industries we have corporations;

within those we have business units;

within those we have teams;

within the teams we have people;

and within people we have our brains.

We are nested.

It turns out that,

as I have and my colleagues have tried
to understand how business works,

we've developed a set of theories.

And when I say a theory,
what I mean is a statement of causality,

an understanding
of what causes what and why.

Some of you know some of the theories.
Disruption is a theory.

What it asserts is that the mechanism
that causes successful companies to fall,

it's not that they're not at their work,

but rather somebody comes in at the bottom
of the market and moves up.

And it's that the mechanism, the pursue
of profit from at the bottom of the market

that makes success so hard to sustain.

There's another theory,

called the theory
of the preservation of modularity.

The theory of the preservation
of modularity

explains among the other things
why the euro doesn't work

and why SAP implementation systems

are so difficult and complicated.

There's another theory
called jobs-to-be-done,

and what it asserts is that,
you know, here's Clay;

I have characteristics:
I'm unfortunately 60 years old now,

I live in the suburbs, five children,

and unfortunately, have all left
and are living independently,

and life has become boring.

(Laughter)

But the fact that I have
those characteristics

doesn't cause me to go out
and buy The New York Times.

There might be a correlation
between my characteristics

and the propensity to buy
The New York Times,

but the characteristics
don't cause me to do anything.

What causes us to do something

is there's a job that arises in our life
and we have to get the job done,

and what causes us
to buy a product or service

is we have to reach out and find something

that can do the job
and pull it into our lives.

That's the causal mechanism
behind a purchase,

is understanding what's the job,

and the insight there is that the customer
is the wrong unit of analysis,

it's the job that we need to understand.

So these are all theories,

and some of you know those,
and a number of others from our research.

What we have learned,
and inadvertently in many ways,

is that these statements of causality

apply at every stage
in this nested system,

and so, the theories help us understand

why nations lose their competitiveness,

why Japan was so successful
and then died, for example;

and why America finds it so hard
to regain our momentum;

- and that goes all the way down
to the point of teams -

a number of years ago, in my course
at the Harvard Business School.

In this course, we study these theories,

try to understand them,

then put these theories on a set of lenses

and examine companies,
or economies, or industries

and try to understand

can we understand why things
are happening the way they are happening,

and what actions
would lead to what results.

At the end of the course, on the last day,

rather than asking them

to just put on these lenses
and examine yet another company,

I asked them to look in the mirror,

and ask them,

"Can you explain why your life
is the way it is today

because of these theories?",

and "Can you predict
what will happen in your life

if you continue to do
what you are now doing?"

And it's been a remarkable experience

to see the students come back
on the last day of class

and with causal theories
as the explanation,

what they need to change in their lives

so that their life will be the life
that they hoped to live.

And I thought, I just offer
a couple of these

in the hopes that as entrepreneurs

and ambitious people

you end up living the life
that you hope you will live.

So one of the things
we observed, as I mentioned,

is that what kills successful companies

is somebody comes in
at the bottom of the market.

So if you go back a few years ago
in telecommunications,

the Darwins of the industry
were Lucent and Nortel,

made circuit switching technology,

and this rusty, little or small company

not very consequential
called Cisco emerged.

And their technology, the router,
wasn't good enough to be used in voice,

but they deployed it at the bottom
of the market with data,

and then went up market,
and ultimately, killed Lucent and Nortel.

The reason why is
that when they look down at the router,

the router on every dimension
wasn't as good.

So they kept making better and better

circuit switch devices.

And we ask ourselves,

"I wonder who decided at Lucent

that they should go out and get killed?"

(Laughter)

"And when was the date on
which they decided they would get killed?"

And the answer, of course,
is that nobody made the decision.

In fact, what happened
is all the individual people

in a very successful organization
did everything right,

but because they did
all of these things independently

and what made sense
in those circumstances,

when it summed up,
it summed up to disaster.

The reason why it sums up to disaster

is they're trying to maximize
their profitability

and typically, the way
you calculate profitability:

tomorrow's investments
that pay off tomorrow

go to the bottom line

and are much more tangible than investment
that pay off ten years from now.

When I go back to my graduating classes,

I graduated from the MBA program
at Harvard in 1979,

we have a reunion every five years.

When we came back for a fifth reunion,
man, everybody was happy;

most of our classmates had married

people who are much better looking
than my classmates

(Laughter)

they're doing well in their career,

but as we hit the tenth, the 15th, 20th,
and then the 25th anniversaries,

oh my gosh, my friends were coming back

not happy with their lives.

And very many of them
have gotten divorced,

and their spouses had remarried,
and they were raising

their - my classmates' - children
on the other side of the country

alienated from them.

I guarantee that none of my classmates

ever planned when they graduated
from the business school

to go out, and get divorced,

and have children who hate their guts,

and are being raised by other [parents],

and yet, a very large portion
of our my classmates

actually implemented a strategy

that they never planned to do.

(Laughter)

It turns out that the reason
why they do that

is the very same mechanism
and that is that pursuit of achievement.

So, we all, everybody here,
is driven to achieve,

and when you have an extra ounce
of energy or 30 minutes of time,

instinctively and unconsciously,

you'll allocate it
to whatever activities in your life

give you the most immediate
evidence of achievement.

And our careers provide
that immediate evidence of achievement:

we closed a sale, we ship a product,

we finish a mid-presentation,

we close a deal,
we get promoted, we get paid.

Our careers provide the most,
very tangible, immediate achievement.

In contrast,

investments in our families
don't pay off for a very long time.

In fact, on a day-to-day basis,

our children misbehave
over and over again,

and it really it isn't until 20 years down
the road you can look at your children

and be able to put your hands
on your hips and say,

"We raised great children."

But on a day-to-day basis,
achievement isn't at hand

when we invest in relationships

with our family, their children,
and our spouses.

And as a consequence, people like you
and I who plan to have a happy life,

because our families truly are

the deepest source
of happiness in our lives,

find that although that's what we want,

the way we invest our time,
and energy, and talents

causes us to implement a strategy
that we wouldn't at all plan to pursue.

And so I wanted to just offer that one;

is something to think about.

The reason why successful companies fail

is they invest in things that provide

the most immediate
and tangible evidence of achievement,

and the reason why they have
such a short time horizon

is that they are run
by people like you and I.

We then apply
that very same thinking process

in our personal lives with sad results.

Let me just offer another thought
that might be useful.

I was driving to work
a number of years ago early,

and when I was
on Huron Avenue in Cambridge,

I just had a feeling

that something important was going
to happen to Clay Christensen,

that I was going to be given

a much more consequential
business opportunity

than I have just as a plain,
old professor.

A couple of weeks later,

somebody who was in that position
announced that he was leaving,

and I put two and two
together and decided,

"Gosh! Sounds like, for whatever reason,

I just had this feeling
that I'm going to be his replacement."

So the day came,
and they chose another person.

I wondered why did I have that feeling

that an important thing
was going to happen to me.

Did the people kind of lose guts?
Or... I don't know.

But I wrestled with

how will they measure
Clay Christensen's life?

If they're going to not make me
the leader of a large institution,

how do I know whether my life
has been worth living?

And again, how I measure my life?

I realized that I studied this
for a long time,

and I reached the strangest conclusion:

that God doesn't employ
accountants or statisticians.

And what I mean by that is,
because you and I have finite minds,

when we try to understand
what's going on in the world,

we have to aggregate things.

So in your companies,

you can't keep track
of every individual invoice,

and so you have
to aggregate all those up,

so that you have receivables,
and payables, and revenues.

You can't keep track
of every element of cost,

and so you have to aggregate
all that up into total cost categories,

and then you subtract that from this,
and there's a number,

and that's the way we try
to understand the world;

is because we have limited minds,
we have to aggregate things up.

And then we'll look at that number
compared to last year's number,

and if it's better, then we say
we're doing better.

That's the way we look at the world
because of our but minds.

It has then another
interesting effect on us,

and that is,
because we have to aggregate,

we get a sense of hierarchy in the world.

In other words,

people who are higher up
in larger organizations

are more important

than people who preside

over fewer numbers of people
and fewer numbers

down the road, down the bottom.

So we tend to this, we get this sense

that people who achieve
in a hierarchical sense,

their lives will be judged
somehow as better

having lived than those below.

We measure sometimes
how high we go or how successful we are

by how much money we make.

But these are all the result
of our having limited minds,

and their having to aggregate
measures of success.

This choice of measurement

is actually a big deal;

in a company, for example,

if you measure profitability
by return on net assets,

that's a ratio,

and sure, you could be innovative,

develop successful, new products,

and take that profitability and stick it
into the numerator of the ratio,

but you can also reduce
the denominator of the ratio

by outsourcing everything,

and the ratio doesn't matter

whether you build it from the top
or subtract from the bottom;

if profitability is measured
by return on net assets,

it causes us to manage it
in a particular way.

And in a similar way,

if we follow our professor's
advices from finance,

and we measure
profitability on innovation

in terms of internal rate
of return or IRR,

it's a ratio,

and sure, you could get the ratio up
by being successful with innovation,

but you also could get that measure up

by only investing in short-term projects.

And it's just the long way of saying,
be careful in how you measure

profitability in your company.

So how do you measure

the success of your life?

As I mentioned, it's
because we have to aggregate,

we have this sense
of hierarchy, wealth, and so on.

But the reason I concluded that God
doesn't employ accounts

is he has an infinite mind,

and what that means
is he doesn't have to aggregate up

above the level of individual people

in order to have a perfect understanding
of what's going on in this world.

When I realized that,

that he doesn't have to aggregate up
above the level of individuals,

then I realized, "Oh, my goodness!

When I have my interview
with God at the end of my life,

he's not going to show me

how high I went
into anybody's org-chart,

or how much money I left
behind in the bank when I died,

but rather he's going to say,
'Oh, Clay, I put you in that circumstance.

Now, can we talk
about the individual people

whose lives you help
to become better people,

because you worked with them,
or they were members of your family,

or you just met them,
and they needed your help.

And then Clay,
I stuck you in this situation.

Let's talk about the individual people
whose lives you blessed

because you use the talents
I gave you to help them.'"

And I realized that that's
the way God will measure my life;

is the individual people
whose lives I blessed.

I just want to offer that
as the second takeaway

from at least, what Clay Christensen
is thinking about,

and that is it's actually
really important

that you succeed at
what you're succeeding at,

but that isn't going to be
the measure of your life.

God doesn't count, he doesn't aggregate;

he's just going to assess you

on the basis of how well
you helped other people be better people.

Well, God bless you,

I hope that some of these ideas
will be helpful to you

and that you all will be successful

in the way that God will measure success.

Thank you.

(Applause)