Most managers are well versed in the defensive playbook for confronting
disruptive innovation. Most commonly, they either acquire the new
entrants or “disrupt themselves” by setting up autonomous units charged
with developing their own new technology that can be rolled into their
principal operations once the disruptive innovation begins to dominate
the industry. But quite often, adopting a new technology requires
companies to fundamentally change their mainstream operations—the way
they manufacture and distribute their products. In these cases where the
organizational model changes along with customer expectations and
preferences, the playbook often falls short. In this article Joshua Gans
of the University of Toronto’s Rotman School of Management identifies
three prescriptions for surviving “supply side” disruption: Companies
must have an integrated organizational model, ownership of a product
feature important to the end customer, and a broad and flexible sense of
corporate identity. Though less commonly understood, supply-side
disruption is arguably more dangerous than the kind described by Clayton
Christensen in The Innovator’s Dilemma; indeed, disruption of a
product’s architecture threatens a company’s very survival in a way that
changes in customer demands do not. [ABSTRACT FROM AUTHOR]