How Established Companies Can Survive Disruption and Thrive in the Aftermath

Success does not have to come from failure.

By: Martin Kuzma

Ask any leader what it is that they believe their enterprises must do to stay competitive, virtually all will answer that their enterprises must learn and innovative every day.  Yet corporate graveyards are littered with examples of companies that woke up to smell the coffee a little too late – Nortel Networks, Blackberry, and Kodak, to name but a few. With companies like LearnVest, Uber, Airbnb, and Wealthsimple popping up on a daily basis, the impetus for incumbents to respond and think disruptively must become part of the corporate culture.

Responding to disruptive innovations is perhaps one of the greatest challenges that leaders in established firms face today.  Predicting the potential impact of the disruption on the industry is often difficult, as well as the fact how quickly the change will happen.

When it comes to surviving a disruption in your industry timing is everything.  On the one hand, disruption can sneak up quickly and destroy your business over night, think Uber.  On the other hand, disruptions can take years, sometimes decades, to play out.  So how can leaders manage the uncertain transition period, without wasting resources, squandering competitive advantage and growth opportunities?

Through their research, Nathan Farr and Daniel Snow, have found thatIntergenerational Hybrids are often an effective, but overlooked tool that can be used to manage the transition from one business model to a newer, more disruptive one.  Hybrids combine elements from the current offering and combine them with the potentially disruptive element to create a new product or offering.  Contemporary examples include hybrid vehicles such as the Toyota Prius.

Many companies have used the Hybrid framework to successfully respond to innovative disruptors.  By following the Hybrid framework leaders of companies facing disruption can determine which Hybrid model to use and how to avoid the pitfalls that trap the unwary.  The models allow incumbent companies to use Hybrids to buy time as they adjust to the new landscape and shape how the innovation develops, or primarily as a learning tool in uncertain times.

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