Finding Power

An introduction to Clay Christensen’s most underrated idea: “The Conservation of Modularity”

People think strategy is about profit, but really, it’s about power. Profit is just the prize.

And if you want to understand the nature of power in business — where it comes from, how to create it, how to sustain it — probably the best place to start is Clay Christensen’s “Law of Conservation of Modularity,” a massively underrated idea from his second book, The Innovator’s Solution.

It’s pretty obscure compared to Christensen’s other hit theories, like “disruptive innovation” and “jobs to be done.” I think this is because the theory can be somewhat abstract and technical, making it hard to understand. (Don’t worry — in this article I do my best to make it engaging and intuitive! 😅)

Another reason the idea is obscure is it suffers from branding issues. Confusingly, it was originally called “The Law of Conservation of Attractive Profits” and some people still refer to it by that name.

But, despite all the challenges, this is not an idea you want to overlook. In my view, it’s actually the most powerful theory in Christensen’s entire oeuvre. I love it because it gives us a unique lens we can use to answer the most important question in strategy: why are some companies so much more powerful than others?

So let’s dive in :) 🔮


⎼⎼⎼⎼⎼⎼⎼⎼

Learn more

This post is for
paying subscribers

Subscribe →

Or, login.

Read this next:

Divinations

Instagram can’t recreate TikTok’s Magic

The content format is a red herring. What really matters is the structure and purpose of TikTok’s network, which is antithetical to Instagram.

165 Aug 24, 2020 by Nathan Baschez

Divinations

LinkedIn’s Alternate Universe

How the professional platform makes networking weird

92 Dec 3, 2020 by Fadeke Adegbuyi

Divinations

Inside the Clubhouse

The surprisingly compelling audio app that has consumed my life

241 Apr 24, 2020 by Nathan Baschez

Means of Creation

A Theory of Justice for Web3

Web3 Is Our Chance to Make a Better Internet

20 May 17, 2022 by Li Jin and Katie Parrott

The Sunday Digest

Crypto’s Failed Promise, the Science of Goal-Setting, and Why Sh*t is Hitting the Fan

Here’s everything we published this week.

13 May 15, 2022

Thanks for reading Every!

Sign up for our daily email featuring the most interesting thinking (and thinkers) in tech.

Subscribe

Already a subscriber? Login