The Disruption Dilemma
- Winner, 2017 PROSE Awards, Business, Finance & Management category
176 pp., 6 x 9 in, 2 figures, 2 tables
- Published: March 18, 2016
- Published: April 21, 2017
- Published: March 18, 2016
An expert in management takes on the conventional wisdom about disruption, looking at companies that proved resilient and offering managers tools for survival.
“Disruption” is a business buzzword that has gotten out of control. Today everything and everyone seem to be characterized as disruptive—or, if they aren't disruptive yet, it's only a matter of time before they become so. In this book, Joshua Gans cuts through the chatter to focus on disruption in its initial use as a business term, identifying new ways to understand it and suggesting new tools to manage it.
Almost twenty years ago Clayton Christensen popularized the term in his book The Innovator's Dilemma, writing of disruption as a set of risks that established firms face. Since then, few have closely examined his account. Gans does so in this book. He looks at companies that have proven resilient and those that have fallen, and explains why some companies have successfully managed disruption—Fujifilm and Canon, for example—and why some like Blockbuster and Encyclopedia Britannica have not. Departing from the conventional wisdom, Gans identifies two kinds of disruption: demand-side, when successful firms focus on their main customers and underestimate market entrants with innovations that target niche demands; and supply-side, when firms focused on developing existing competencies become incapable of developing new ones.
Gans describes the full range of actions business leaders can take to deal with each type of disruption, from “self-disrupting” independent internal units to tightly integrated product development. But therein lies the disruption dilemma: A firm cannot practice both independence and integration at once. Gans shows business leaders how to choose their strategy so their firms can deal with disruption while continuing to innovate.
This important and thought-provoking book has been a source of fresh, new insights for me. Even when Gans disagrees with my work, it has given me a chance to improve what the theory needs to say.
Clayton M. Christensen, author of The Innovator's Dilemma
Joshua Gans is not only one of the world's leading academics but also someone who is deeply engaged in the reality of disruptive change. In this beautifully written book he pulls the concept of disruption apart and then puts it back together again in ways that change our understanding of what drives successful innovation in profoundly important ways. This is a book rooted in the very latest research that has critically important implications for the way in which every manager should think about—and respond to—disruption.
Rebecca Henderson, John and Natty McArthur University Professor, Harvard Business School
Disruption is a concept that is widely cited but poorly understood. At last, Gans provides the clarity that innovators, incumbents, and academics have long been seeking.
Erik Brynjolfsson, Director of the MIT Initiative on the Digital Economy, and coauthor of the New York Times Best Seller The Second Machine Age
Joshua Gans builds on decades of experience in strategy and technology to provide a novel and insightful approach to understanding the sources of disruption and strategies to defend against it.
Susan Athey, The Economics of Technology Professor, Stanford University, and winner of the John Bates Clark Medal
Joshua Gans has a rare combination of skills—he's a highly rated economic theorist, he's a careful student of business strategy, and he's an extraordinary expositor. The result is a book that draws upon the deepest insights of economics, applies them to some of the most pressing strategy issues of the day, and delivers usable insights with his customary charm and grace.
Justin Wolfers, Professor of Economics and Public Policy, University of Michigan
What is disruption? Why does it matter? What can and should companies do about it? With compelling case studies and clear logic, The Disruption Dilemma cuts through the confused debate on this overused term and the weak thinking that has dominated the field of innovation and offers business and analysts the tools to think ahead.
Luis Garicano, Professor of Economics and Strategy, London School of Economics
A very good introduction to the game theory and institutions of 'disruptive innovation,' the book also dispels many myths about that concept.
If you think you understand when large firms are in danger, and what they should do, as well as when there are opportunities for start-ups, this is a must-read book.
What makes this book compulsive is the way models of disruption are mapped onto various case studies – the introduction of the iPhone, Microsoft and the 'browser wars', the aforementioned Blockbuster – in a way that brings the theory alive and arms the reader to face future disruptions.