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New book by Rotman School professor examines how firms manage disruption

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Toronto – Almost twenty years ago Clayton Christensen popularized the term disruption 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.

A new book by Joshua Gans, a professor at the University of Toronto's Rotman School of Management, takes a timely closer look at disruption. In The Disruption Dilemma, 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, Prof. 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.

Prof. 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. In the book, he shows business leaders how to choose their strategy so their firms can deal with disruption while continuing to innovate.

"A very good introduction to the game theory and institutions of 'disruptive innovation,' the book also dispels many myths about that concept," says Tyler Cowen, co-author of the Marginal Revolution blog and a professor at George Mason University.

"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," says Clayton M. Christensen, author of The Innovator's Dilemma and the Kim B. Clark Professor of Business Administration at the Harvard Business School.

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About the author.

Joshua Gans is a Professor of Strategic Management and holder of the Jeffrey S. Skoll Chair of Technical Innovation and Entrepreneurship at the Rotman School of Management (with a cross appointment in the Department of Economics). Since 2013, he has also been Area Coordinator of Strategic Management. He is also Chief Economist of the Rotman School's Creative Destruction Lab.

Prior to 2011, he was the foundation Professor of Management (Information Economics) at the Melbourne Business School, University of Melbourne and prior to that he was at the School of Economics, University of New South Wales. In 2011, Prof. Gans was a visiting researcher at Microsoft Research (New England). He holds a Ph.D. from Stanford University and an honors degree in economics from the University of Queensland. In 2012, he was appointed as a Research Associate of the NBER in the Productivity, Innovation and Entrepreneurship Program.

At the Rotman School, he teaches MBA and Commerce students Network and Digital Market Strategy. He has also co-authored (with Stephen King and Robin Stonecash) the Australasian edition of Greg Mankiw's Principles of Economics (published by Cengage), Core Economics for Managers (Cengage), Finishing the Job (MUP) and Parentonomics (New South/MIT Press) and Information Wants to be Shared (Harvard Business Review Press).

About the book.

The MIT Press, 2016
ISBN: 978-0262034487
176 pages

The Rotman School of Management is located in the heart of Canada's commercial and cultural capital and is part of the University of Toronto, one of the world's top 20 research universities. The Rotman School fosters a new way to think that enables our graduates to tackle today's global business challenges. For more information, visit http://www.rotman.utoronto.ca.

For more information:

Ken McGuffin
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University of Toronto
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