Surviving the Treacherous World of Disruption

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The digital domain is exciting and dynamic — if you know how to compete

By Kevin Delaney

It’s a competitive world out there. Everything that can be digitized—products, services, and business processes—will be digitized. It’s a world where one in four market leaders will be displaced in the next five years.

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If it feels like your technology, your company, and even your industry, are caught in a swirling vortex, you’re not alone.

A new book, Digital Vortex, paints a treacherous picture of disruption in today’s marketplace.

But don’t despair. The digital vortex is also exciting and dynamic. As long as you know how to compete.

The book is based on surveys and interviews with hundreds of executives from incumbents to startups. In effect, it “cracks the code” of agile, digitized organizations, enabling C-suite executives to win in this challenging new environment.

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“Despite the high stakes, our research shows that only 25 percent of companies are proactively fighting disruption, mostly because they don’t know what to do,” said one of the authors, Jeff Loucks.

Loucks wrote the book with James Macaulay and Andy Noronha. Joining them is Michael Wade, of the IMD Business School.

“We wrote Digital Vortex to help companies understand how they’re being disrupted, and how to build the capabilities they need to compete is this new reality,” said Loucks


Setting the Digital Bar: Cheaper, Faster, Better

Disruptors are winning by focusing on what the customer needs. The result: better, and often much cheaper, products and services that suddenly change the game.

| Related: Enhancing the Customer Experience

“We say in the book, ‘It’s the value, not the value chain,’” Loucks explained.

“For example, most banks provide investment advice through high-priced financial advisors. Now, robo-advisors are using algorithms to help investors select and manage their portfolios at a fraction of the cost.”

“Nearly every company will find its core businesses under attack at some point,” Loucks said. “To thrive, they must maximize revenue in disrupted markets, while simultaneously moving into new, high-margin businesses. Unfortunately, most companies are not agile enough to do both, and many struggle to do either of them well.”


Digital Business Agility

But can a traditional company hope to compete with these disruptors?

“We have identified the capabilities that make disruptors agile,” said Loucks.

For startups and incumbents alike, the authors argue, digital business agility is the key. That is, the ability to respond to disruptions and opportunities rapidly.

Every company must think like a startup. As Loucks put it: “In Digital Vortex, we help you understand disruptors so you can beat them. Understand how they operate. Understand the capabilities and business models they have, that you don’t.