A few weeks ago I participated in a lunch discussion in New York with a group of around 20 people from a wide range of ages and professions. The theme of the lunch was The Future of Work, but given the eclectic nature of the group we talked about a number of subjects. One of the topics discussed was how companies generally deal with major technology and market changes, - like those that have been taking place all around us for the past few decades.
Transformative change comes naturally to young companies, as it generally does to young people. But, based on my personal experiences, adapting to such disruptive changes is much more difficult for successful, well established companies. Not for nothing do we refer to the changes accompanying disruptive innovations as creative destruction, the powerful force that rejuvenates the economy in Joseph Schumpeter’s 70 year old theory. Mature companies that once led their industries are too slow to respond to the waves of startups now attacking them with innovative products and services.
Following the lunch, I kept thinking about the topic. Why are so many successful, well managed companies done in by disruptive technology and market changes? Is it that in spite of all their strategy efforts, their management is unable to anticipate the changes and is caught by surprise? Or is it that, as if actors in a kind of Greek tragedy, they see the changes coming and understand what needs to be done, but are somehow unable to make the needed strategy and cultural transformations? Let me share some of my thoughts on these questions.