In response to the natural evolution of businesses, as well as several external factors (e.g., demographic shifts, social and cultural expectations, technology-led innovation), large companies globally are preparing for disruptive change in their industries. This disruption comes in two forms, 1. Big Bang, where companies and industries are wiped out in a very short space of time and 2. Compressive disruption which take longer to happen but slowly eats into a company’s profitability.
Companies understand that they need to evolve—often in a radical way. However, they frequently get stuck in their current business models. They are overly focused on their “core” businesses (which is understandable, as this is where they grew up and it’s where today’s businesses make money) that they cannot get to the “new” emerging nearby.
So, what happens then is that organizations miss opportunities to release a tremendous amount of value that is trapped inside their current business models, supply chains and wider markets. We call this “trapped value” and it is typically unlocked by disruption. Actually, disruption is the necessary outcome, and the source of the disruption is innovation.
Organizations understand that innovation is crucial but finding ways to scale innovations successfully is extremely difficult and that is why companies are vulnerable to disruption.
With this context it is important that organizations build a practical path to lead in the NEW. To lead in the new, organizations must master four areas, perpetually and concurrently. These include: