The Fear of Disruption Can Be More Damaging than Actual Disruption  

9 November 2017:

Business leaders are always worried about disruption. Some high-tech rival might, after all, do to their sector what smartphones did to the photography industry, what e-commerce is doing to retail, and what financial technology (fintech) is threatening to do to consumer banking. In PwC’s 2017 survey of 1,379 chief executives around the world, 60 percent said that technological advancements had significantly changed or completely reshaped competition in their sector in the last five years, and more than 75 percent anticipated they would do so before 2022.

And yet, in a recent study tracking the real-world impact of competitive upheaval, we found that the fear of disruption is exaggerated. Although we have no crystal ball to predict exactly how much disruption will take place during the next five years, we have found that companies facing disruption generally have longer to respond than they expect, and an effective response is available to them. When disruption does affect a company, it’s frequently because the enterprise was already vulnerable in some fundamental way; moreover, many incumbent companies accelerate their decline through their efforts to forestall it. Panic-driven efforts to avoid or combat disruption can easily lead to hasty, reactive, short-term-oriented decisions that move a company in many directions at once, distracting its management and squandering its resources. The fear of disruption can thus be worse for a company than the actual disruption itself.

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Source: Strategy-Business

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